Dealer margin is the cents per gallon a station keeps between what its fuel costs delivered and the price it charges at the pump. It is the station’s cut on fuel.
When a station buys fuel, it pays a delivered cost. When it sells, it charges the pump price. The gap between those two, counted in cents per gallon, is the dealer margin. Out of that gap the dealer still has to cover the cost of taking cards and the cost of running the site, so the true keep is smaller than the raw spread.
The margin moves with the market, and not always in the obvious way. When wholesale prices fall fast, dealers often hold the pump price a little longer and the margin widens. When wholesale prices climb fast, the pump price lags behind cost and the margin shrinks, sometimes to nothing.
The plain truth is that fuel margin is thin. After card fees, a dealer may keep only a handful of cents a gallon. That is why most stations treat fuel as the draw that pulls cars in, and earn their real money inside on snacks, drinks, and other goods, where the margin is far richer.
In useWith fuel at a nickel a gallon of dealer margin after card fees, the operator knows the cooler and the coffee counter are paying the rent, not the pumps.
See also Dealer, Dry stock, Dealer tank wagon (DTW)