California station pumps up business with low gas prices

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Wes Bowers | Lodi News-Sentinel

As motorists have been hit hard at the pumps this summer, one Lodi company has made an effort to keep prices low.

As of Friday, Kludt Oil & Propane’s prices were about $5.15 a gallon for regular gasoline, and about $5.33 for regular-plus gasoline. Kludt is located at 1126 E. Pine St., east of Highway 99 in Lodi’s industrial area.

Prices for premium gasoline were about $5.50 a gallon on Friday, and diesel was about $5.90 a gallon, co-owner Michael Kludt said. Just a day earlier, prices had been as low as $4.85 a gallon for regular.

“We’re just trying to be fair,” Kludt said. “The (profit) margin we try to reach is within 10 to 15 cents a gallon. Once that margin gets high, we lower prices.”

Gasoline retailers receive a fraction of the price listed on their signs. According to fortune.com, net profit margin for most gas retailers is between 3 and 7 cents after factoring in costs such as labor, utilities, insurance and credit card transaction fees.

According to autoblog.com, the average price for gas in Lodi as of Thursday was about $5.18 a gallon, with the two Chevron stations on West Kettleman and Ham lanes posting the highest numbers at $5.37.

Kludt said his company is able to keep costs to customers low because it only sells fuel. Other stations in town such as Arco, Chevron and Sinclair also offer grocery items such as food and beverages, and gasoline sales offset the cost to stock shelves.

And because the company’s prices have been lower in recent weeks, Kludt said the company has seen more people at the pumps than it has in a long time.

“We’ve been selling fuels at levels we’ve probably haven’t seen in a number of years,” he said. “We’re averaging sales of about 2,000 gallons a day. We’ve had some days where its 4-5,000 gallons a day.”

Kludt said the company hasn’t sold that many gallons a day in at least 30 years, when local trucking companies were forced to remove their underground storage tanks due to environmental concerns and scrambled to purchase gasoline from providers.

At that time, Kludt said the company would typically make as much as $3,000 in sales at the pump or inside. Today, he said sales have reached as high as $20,000 a day. That doesn’t include sales to Kludt’s trucking or agricultural clients to which it delivers, he said.

And while his prices are lower than major retailers, they are still higher than what Kludt Oil was offering a year ago, when gas was $3.92 a gallon for regular gasoline.

When the COVID-19 pandemic began, gas was about $2.60 a gallon for regular gasoline, he said, and $3 for diesel.

Kludt said prices in the summer months are typically higher due to consumer demand. Prices usually start to dip as fall moves into winter, and then levels off in the spring before increasing again by June.



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