Even Gas Stations are Getting Squeezed by High Prices

The profit margins of gas stations fell sharply in May as consumer gas prices hit record highs day after day, data from the Bureau of Labor Statistics showed Tuesday.

Many Democrats have sought to blame price-gouging companies f0r the surge in gasoline prices. But declining margins indicate that gas stations are raising their prices slower than their costs are rising.

Margins for fuel and lubricant retailers fell 21.7 percent in May. Gas prices rose 4.1 percent in May, nearing five dollars a gallon. In the past two weeks, prices have continued to hit record highs. On Tuesday, the national average gas price was $5.016 a gallon, the highest price recorded.

Despite the decline, margins are still up from a year ago. They got a big boost in March and April, right after Russia invaded Ukraine. This cut the supply of oil even while demand in the U.S. and around the world was still surging higher. That imbalance of supply and demand boosted prices and temporarily lifted profit margins.

Contrary to the “greedflation” thesis pushed by many Democrats, however, gas stations have not been able to pass through all of their cost increase, shrinking their margins.