Soaring Gas Prices Squeeze Retailers Despite Rising Costs

Factors outside of gas stations' control, like global oil markets and taxes, drive near-daily price fluctuations

Apr. 3, 2026 at 11:54am

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An abstract illustration using bold geometric shapes and a muted color palette of dark greys, blues, and oranges to conceptually represent the various factors that influence gas prices, including crude oil, refining, taxes, and retailer margins.Geometric shapes and colors illustrate the complex forces behind the volatile swings in gas prices that squeeze both consumers and small business owners.Des Moines Today

The near-daily changes in U.S. gas prices are leaving drivers feeling frustrated and cash-strapped, as the national average tops $4 per gallon. However, gas station owners say they are largely price-takers, with their margins shrinking when prices rise due to factors like the cost of crude oil, refining, and taxes - factors largely outside their control.

Why it matters

The volatility in gas prices is impacting both consumers and small business owners, as drivers have to constantly monitor prices and adjust their budgets, while gas station operators face tighter margins and higher operating costs. This highlights the complex dynamics of the fuel supply chain and the limited ability of local retailers to influence prices.

The details

About half the price at the pump pays for the cost of crude oil, the main ingredient in gasoline. Another 20% goes to refiners who turn crude into gas. Taxes - federal, state and local - account for nearly 20% of the price, while about 10% is left for retailers, who still have to pay for transportation, labor and other expenses. Retailers' markup has averaged about 38 cents a gallon over the past five years, with stations typically keeping around 15 cents per gallon after expenses.

  • Gas prices topped $4 per gallon nationwide on Tuesday, April 3, 2026.
  • Crude oil prices soared when U.S. markets opened on Thursday, March 31, 2026, following President Trump's speech promising retaliation against Iran.

The players

Lonnie McQuirter

Director of operations at 36 Lyn Refuel Station in south Minneapolis, who says wholesale fuel prices are going up multiple times a day, forcing him to raise prices at the pump.

Jeff Lenard

Vice president at the convenience store trade group NACS, who says gas station margins average about 15 cents per gallon after expenses.

Patrick De Haan

Head of petroleum analysis at GasBuddy, who compares gas station owners to homeowners, saying they are "price takers, not makers."

Neal Walters

Partner focused on energy at the global management consulting firm Kearney, who says gas stations near competitors may price gasoline competitively to attract drivers.

Garrett Golding

Assistant vice president for energy programs at the Federal Reserve Bank of Dallas, who says most profits in the oil and gas supply chain are made upstream by companies that extract and refine crude oil.

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What they’re saying

“We price based on what we're able to buy fuel at, and how well we can operate.”

— Lonnie McQuirter, Director of operations, 36 Lyn Refuel Station

“It really takes a toll when people are having to cut back on certain things in order to afford to live.”

— Lonnie McQuirter, Director of operations, 36 Lyn Refuel Station

“If I was selling a house today, I'd be beholden to whatever the housing market is. That's the same for gas station owners. Whatever the price of oil and gasoline are, they are a price taker, not maker.”

— Patrick De Haan, Head of petroleum analysis, GasBuddy

“The margins shrink when prices go up because it's harder for them to pass along the increases as quickly as they themselves get them.”

— Patrick De Haan, Head of petroleum analysis, GasBuddy

“It may be a good stretch of days or weeks for them, but they're also cautious of what it could portend.”

— Garrett Golding, Assistant vice president for energy programs, Federal Reserve Bank of Dallas

What’s next

Analysts will continue to monitor the global oil market and geopolitical tensions that are driving the recent price spikes. Consumers may need to adjust their budgets and driving habits in the short term, while policymakers consider measures to provide relief or stabilize fuel costs.

The takeaway

The volatility in gas prices highlights the complex, interconnected nature of the fuel supply chain, where local retailers have limited control over the factors that determine prices at the pump. This dynamic puts small business owners in a difficult position, as they must balance rising costs with the need to serve their communities.