Prices burn owners

COSTA MESA — For customers at Fred Majdi’s Union 76 gas station on Newport Boulevard, rising gas prices mean a number of things: carpools, shorter day trips, less money to spend on luxuries.

For Majdi and his staff, those numbers translate into different problems.

The manager, who oversees six gas stations around Southern California, has had to make sacrifices as the average cost per gallon inches higher by the day. Majdi said his station at the foot of the 55 Freeway has had to dispense with “buy one, get one free” deals, and he and other employees are having to do their own cleaning rather than hire outside help.

“People aren’t driving as much,” Majdi said. “It’s not only here. It’s all over.”

County gas prices continued their climb on Wednesday, hitting another record: $3.695 for the average regular gallon. Around Newport-Mesa, a few stations offered gallons at slightly below that price, while others exceeded it and even surpassed $3.80. Those rising costs translate into fewer profits for many gas stations — meaning that managers and owners like Majdi have to tighten their budgets to stay in the black.

The problem, a number of station owners said, isn’t necessarily that people are spending less money at the pump; many customers who paid $25 for gas half a year ago are spending the same amount now.

But that money buys fewer gallons than it did in the past, and station owners, who purchase the gas to resell, are often left without reimbursement for a large amount of their stock.

In short, customers are spending the same amount of money but buying less gas, and that affects people on both sides of the counter.

Sasan Amir, who manages a Chevron station in Corona del Mar, recently laid off the employee who used to stock his shelves; Amir is doing the job himself now. Shawn Mohebbi, the owner of the Mobil station at San Joaquin Hills Road and San Miguel Drive, said layoffs hadn’t been an issue for him, but his station — which charged $3.83 for a regular gallon Wednesday — had seen cutbacks on the customers’ end.

“People have to divert the money they have for the water and soda, which I make more money off of,” he said. “Now, they can’t spend it for water and soda because they have to spend it for gas.”

Mohebbi’s station, which resides in one of Newport Beach’s richest neighborhoods, posted one of the highest gas prices in the area Wednesday.

Costs varied elsewhere around Newport-Mesa, but not always consistently, with some stations across the street from each other varying by as much as 10 cents a gallon.

Jeffrey Spring, a spokesman for the Automobile Club of Southern California, said a number of factors determine a station’s gas prices. Sometimes, he said, corporations dictate how much their gas costs in different cities or neighborhoods, adjusting the rates according to local cost of living or other criteria. Other times, a station can have particularly high prices if it’s the only one in the near vicinity.

“If there’s one gas station that’s a stand-alone, they may perceive it as not having much competition,” Spring said.

Other factors, such as personnel or promotions, often come down to the individual owners and managers.

“Not everybody has the same business savvy,” Amir said.

MICHAEL MILLER may be reached at (714) 966-4617 or at [email protected].