The recession has come to Portola Valley, a town noted for its comfortable lifestyle for people who are comfortably employed. It may lose its only gas station.
“Everyone wants a station in Portola Valley, but how many people really want a station in Portola Valley,” asked Ron Ramies, the owner of the independent Portola Valley Fuel.
Mr. Ramies said he needs to be selling at least 2,000 gallons a day to stay profitable. Recent sales are less than 1,000 gallons a day, he said in a Feb. 25 interview.
With a profit margin of 8 cents a gallon, that means $80 a day, while a day’s wages for an employee is $120, he said. The station has lost $30,000 since December. What’s keeping it open? Subsidies from his auto repair and metal fabrication businesses.
There’s a 50/50 chance his station will be closed come June, he said.
Tough times
The troubles began Dec. 10, when his wholesale price started rising between 8 and 32 cents per gallon above what brand-name stations pay, he said.
This “inverted market,” said Mark S. Mitchell, president of Coast Oil Co., a San Jose-based supplier for independent stations, is due to several factors, including a tight supply coming out of California refineries, the branded companies muscling in to buy up what gas there is, and the state’s gasoline formulation, “the most stringent in the world.”
The costs of complying with environmental laws have “tripled in the last five years,” Mr. Mitchell said. “All independent stations are suffering.”
Mr. Mitchell’s analysis came via e-mail forwarded to The Almanac by Mr. Ramies.
Mr. Ramies is trying discounts — 45 cents off for paying with a debit card, for example — and buyers of at least 200 gallons get a free oil change and alignment check.
He installed new toilets three months ago. Bike riders like them, and Mr. Ramies said he asks that they “spend a buck for a bottle of water,” but not enough do. “That’s what I want to do,” he noted, “is clean that bathroom for half an hour for nothing.”
A state deadline is looming. He said he has until April 1 to update his station’s gasoline-vapor-recovery system, which will lose him three days of business and cost at least $50,000, with the bids rising because he’s “a captive audience.”
“I would do it if I knew I was going to get continuing support,” he said.
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Mr. Ramies bought out his partner at the station in May 2008, and switched from Texaco brand to independent to “take away the stigma of high prices.”
But being unbranded has drawbacks among his occasional customers. One lady, he said, explained that she buys branded gas in Ladera because she gets “way better gas mileage.”
He could give in and become a franchise again and let the parent company set prices. “I do have that option, but do I want that hand to be on top of me, telling me what to do?,” he asked. “That’s kind of a nightmare, being controlled by a big oil company. I’m a competitive guy. I’m really trying to help Portola Valley.”
To that end, he’s installed a back-up generator that keep pumps running during power outages so residents can run their generators. They need to understand, he said, what they’ve got before they lose it.
“If it goes, it’s done,” he said. “I’m teeter tottering with this gasoline thing. The public-service thing only goes so far.”
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