Eighty cents and counting.
Gasoline prices have jumped at least 80 cents in the past month across Florida. It’s the price of gasoline, for sure, but really the unpredictability of pump prices.
"These are rare times of volatility," said Lee Doucette last week as he looked at his laptop computer.
Doucette is a second generation gas station owner in Miami-Dade County. He shares a small office with his wife, who helps run the business that includes a three-bay auto repair garage, a small convenience store and 10 sets of gas pumps.
Floridians have paid more for gas in the past — almost $5 a galllon in June 2022. Yet, the sharp spike is jarring for household budgets. The average fill-up cost around $45 a month ago. Now it's $57.
According to the Triple A Auto Club, a gallon of gas in Florida was $3.73 cents on Monday. That’s up from $2.89 on Feb. 28, when the U.S. and Israel began attacks in Iran.
Such a price swing makes it tough for drivers and gas station owners to budget.
Doucette gets an email once a day from his fuel wholesaler. The email details what he would have to pay to fill-up his underground tanks. The price is good for 24 hours and helps determine the prices Doucette decides to display on his big sign along US1.
On the day WLRN visited, diesel was quoted down 25 and a half cents per gallon from the day before. Doucette could have purchased more diesel for $4.20 a gallon. Premium gas was down 8 cents to $3.91 a gallon wholesale. Prices have since gone higher.
" Before prices start to jump, you have to start [raising the retail price] a little bit so you don't get hit to invest hugely into your inventory," Doucette said.
When his station's tanks are fully loaded, there's almost 40,000 gallons in the ground. That's easily more than $120,000 tied up. If Doucette's pump price doesn't reflect the gasoline that will be delivered, he can be stuck selling gas at a loss.
His wholesale price dropped 16 cents the previous Friday and Monday, just before he loaded up his tanks again. But then prices fell again in the middle of week and he didn't have a fill-up scheduled so he paid more for the gas in his tanks than the wholesale price was just a few days later.
The gas pumped by drivers rarely has a single wholesale cost. It usually is a blend of prices depending upon when the gas was delivered to stations. Gas station owners have to work to price their pumps to match the next load of gasoline, otherwise they might be caught short.
Prices shot back up just a day after WLRN visited. And they have kept climbing. Iran's attacks against ships in the Strait of Hormuz has shut down the vital waterway for global crude oil markets.
"You have to play the game of when you replace your gas," he said. "When the volatility gets like this in the fuel market, sometimes you have to bite the bullet and say, 'I'm going down to my cost,' because we can't sell below cost just to get rid of it. So you get a fresh load as its dropping in price."
It requires an additional $5,000 to buy 10,000 gallons for every 50 cents a gallon Doucette's wholesale price increases. Station owners want to stay ahead of such price hikes, but that's difficult when prices are making swings of 5% or more each day.
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He advised drivers to look for stations doing a lot of business. "You want to seek out busy gas stations because odds are they're turning that gas over more frequently. The prices may run up fast, but perhaps they may be able to come down a little faster," he said.
Doucette monitors what other's are selling gas for. He can do that by looking out his store's front window. There is a Shell station right across the street.
Most of his customer pay for their gas using credit cards. As pump prices rise, so do Doucette's card fees. He expects to spend about $16,000 this month if prices stay near $4 a gallon because the swipe fee he pays is a percentage of the total sale. As pump prices go up, so do his credit card fees eve if he's not selling any more gasoline.
Doucette's price jumped more 15 cents a gallon by the end of the week.
"Very volatile. Just thought you'd like to know," he texted.
News Service of Florida contributed to this report.
