High gas prices leads owner to shut down pumps

High gas prices aren't just breaking the family budget. They've also caused a business shift on the corner of South Carson and Stewart streets.

Steve Krause, owner of Sierra Nevada 76, covered his five pumps Saturday, and he'll soon throw a canvas bag over the 8-foot tall 76 sign above his station.

"The business is breaking me," he said Tuesday. "You can't make any (profit) margin on this stuff. The oil company dictates to you, and everyone thinks your profits go up exponentially when gas prices go up, but my margin stays flat."

A few months ago he paid $20,000 to supply his pumps. Recently it's surpassed $30,000. This high price accounts for a 3- to-4-cent profit margin. When gas is bought low and the price escalates, station owners could expect as high as 13 cents profit, Krause said. He bought the station a year ago.

The 3-cent profit doesn't cover the cost of the fuel delivery, utilities, salaries and the rent, he said. He was losing money on credit and debit purchases because the fees were about half of his profit.

"What I'm doing is transitioning into a full-service center," Krause said. "We will start selling used cars on the lot."

He plans to have DJs Auto & Truck Sales open for business within the next two months. The service center is open. Krause, and partners Donna and John Garrettson, plan to have 50 used cars on the lot, on the corner of the Carson Mall property at 1457 S. Carson St.

Krause said he knows the covered signs and pumps are an eyesore, "but it's the only way to discourage people from pulling up." He'll put up new signs once he gets all his permits.

"With high prices, this is a tough business," said Carson City Shell owner Mike Miller. His station has unleaded prices at $3.29.

The average cost in Carson City for a gallon of regular gas is $3.24, which is a 50-cent increase from a month ago, the automotive organization reported Tuesday.

The average price of a gallon of gas in Nevada is $3.21, a 52-cent increase from the last AAA survey April 11. Gas prices have set records daily since May 1.

Michael Geeser, a AAA spokesman, said almost every refinery has completed the switch to an ethanol fuel additive, which was helping to push gas prices higher. Demand typically goes up after Memorial Day, when many Americans take road trips.

• Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.

Gas report

• The average cost in Carson City for a gallon of regular gas is $3.24, which is a 50-cent increase over a month ago.

• The average price in Reno and Las Vegas increased by 51 cents since April 11. Las Vegas' average is $3.15 for a gallon of gas while Reno is up to $3.29.

• The least expensive gas in Nevada is in Elko, where the average price is $3.02 a gallon. The most expensive gas in Nevada is in Reno and Sparks.

• The nationwide average price is $2.93, up 24 cents from April 11.

• The most expensive gas in the United States is in Wailuku, Hawaii, where a gallon of regular unleaded costs an average of $3.70.

• The least expensive gas in the United States is in Cheyenne, Wyo., where the average price is $2.61 per gallon.

Source: AAA Nevada