If you are about to start a gas station or acquire one, you might be wondering: Is a gas station a good business to own? What return on investment (ROI) can you expect in the first year or over the first five years? How much will it require to invest, and what challenges might you face? How can you maximize the profits?
We have thoroughly analyzed everything and shared the details in our guide.
Based on our research, we can confidently say that owning a gas station is a good business decision. It has strong potential for the future and is considered a relatively safe investment.
For instance, look at the total revenue gas stations are making or the trends we see in the following years. It’s incredible.
In 2024, gas stations made about $597.3 billion in total revenue. There were approximately 65,399 gas stations, each producing around $5.4 million per year.
Overall, this industry is trending upward. It is expected to reach $3,347.09 billion by 2028. That’s a huge surge.
That is a good indication of demand.
Gas stations primarily sell fuel, but they also generate sales from snack foods, drinks, and service items such as car washes.
In fact, profit margins on fuel revenues are low, but the in-store purchases add up huge profits, creating a steady income stream.
The mix of these two cash flows stabilizes revenues.
On this page:
First, let’s see if owning a gas station is profitable:
In short, yes, owning a gas station is a profitable business, but like any other business, it depends on many factors.
Here is what to consider while starting or buying a gas station.
As said earlier, gas stations remain profitable because people need fuel for their vehicles. However, gas stations do not profit just from gasoline; they also receive profits from snacks, drinks, car washes, ATM fees, and air pumps. So you should consider its overall sales, or when you do market research, you can have a rough estimate of your competitor’s overall sales to see how much cut you will get.
Location is of paramount importance, as gas stations that operate in proximity to a highway or in cities and along busy roads typically profit more than stations located in quieter locations.
While talking about profit margins, gas stations themselves receive low profits from fuel sales alone, usually less than 2%. The typical small gas station’s net profit is approximately 3% to 5%.
- Larger gas station chains do significantly better. For example, 7-Eleven is on average earning about 5.4%, and Casey’s General Stores is claiming a profit of up to 27.1%.
- Most small or mid-size gas stations are averaging an annual profit between $70,000 and $100,000.
- Larger gas stations located at great locations are making over $500,000 a year.
Reports from gas stations sold between 2020 and 2024 showed Owner’s Discretionary Earnings to be on average between $109,000 and $324,000.
So yes, owning a gas station can certainly be a way to profit—if you know what you are doing and where to capitalize on your profits.
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Revenue potential:
A gas station’s monthly revenue can vary greatly. Some gas stations make about $50,000, while others make over $250,000 monthly.
Ultimately, location and size play a significant role. Gas stations next to major highways tend to do better than gas stations in more rural areas.
Being associated with a well-known brand or franchise chain also leads to greater traffic; people trust a name they know and look for their trusted brands.
For instance, according to Bing Data, people often look for well-reputed brands:
Gas stations that are independently owned can make money as well, especially if they are located well and have more to offer than just gas.
For instance, according to Google data, millions of people want a station near them. If you’re in a populated area, you can attract thousands of them with appropriate marketing and by making your gas station appear on Google.
We have found in our research that the gas stations that sell snacks, food, and coffee and have a car wash or auto repair shop will most likely create considerably more revenue.
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Profit margins:
Gas stations just normally turn a meager profit on the sale of gas, and regardless of gas being one of their largest sources of revenue, it is generally considered their least profitable source of income unless they have big sales.
Typically, the profit on each gallon of gas is quite small, ranging from 5% to 15%, and often less than that.
In some cases, stations only make $0.03 to $0.07 for each gallon of gas. If a station sells 4,000 gallons in a day, the profit, which may sound like a lot for gas, is only around $120 to $280 a day.
Still, gas is important. Even if gas has a low profit ratio, gas serves to attract customers into the station.
Once they’re there, they often spend more time inside.
The average station earns more than $1.3 million in revenue per year, with about $910,000 of that from fuel sales. That’s right, even though the dollar value sounds so high, the average station’s profit margin on each gallon is less than 2%.
In addition to gas sales from fuel revenue, convenience store sales are usually a factor in gas station revenue and contribute to profits.
In total, the convenience store typically contributes roughly 30% of the total revenue at the station, but could contribute upwards of 70% of the profit.
Margins here are much better.
Items like snacks, drinks, tobacco, and coffee have margins ranging from 10% to 40%.
For example, chips or soda might bring in 20% to 30% profit per sale.
The average gas station store makes around $90,100 per month in sales.
That adds up to around $390,000 per year.
So even though the store brings in less total money than gas, it makes more actual profit.
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Car wash services:
Adding a car wash can be a great addition. It brings in extra income with very little effort after setup.
Margins here are high, and sometimes, express car washes can make a profit margin between 40% and 60%. It’s a lot higher than what most businesses bring in.
Automated car washes especially don’t need much staff, which keeps costs low.
They can also help attract more customers.
Offering a car wash discount with fuel purchases is an easy way to lift sales all around.
Other services:
Gas stations can also increase their income through other smaller ways. Because they are relatively inexpensive on their own, these services have the potential to grow throughout the years.
For example, air and water stations cost practically nothing to maintain, and once they are put in, customers will pay for them regularly.
Another simple addition is an ATM. Each time someone uses it, the station gets a small piece of the fee.
Another easier option is a vending machine that has snacks or drinks; most vending machines do not need extra staff, which can be a simple way to increase income.
Finally, oil changes or tire checks as auto repair options can do even better. These services often bring higher profit margins of 40% and 60%.
Altogether, adding these services at gas stations allows them to stay more financially stable and profitable, even if fuel margins are low.
Ongoing costs:
Operating a gas station incurs regular costs. Some of these costs are anticipated. Some are variable depending on the location of the gas station and how it is operated.
Typically, the largest expense is fuel.
Fueling the gas pumps is a constant responsibility, which requires a frequent fuel supply.
In any instance when a fuel truck is sent to refill the station, you could be looking at costs anywhere between $10,000 and $50,000, depending on both fuel tank size and how quickly you sell fuel.
The second cost is rent or land costs.
If you are renting the gas station location, expect monthly rent costs to range between $10,000 and $50,000 per month.
If you own the property, you will still incur costs for property taxes and maintenance of the property.
Utilities are consistent costs. To operate the gas station, you’ll require power, water, and waste removal.
If your station has a car wash or a bigger cooler, you may see additional utility bills.
Then there is the staff.
Many gas stations remain open 24 hours a day, meaning you have to have enough employees to cover all shifts.
Payroll is often one of the highest monthly expenses and can be dependent on where you are in the country, too.
Insurance is a necessity.
Most gas stations will pay between $10,000 and $40,000 a year on a full insurance policy. Your policy will include general liability, property, environmental risks, theft, and even cyber liability protection.
Every year, you will also have to renew business permits. These permits can include anything from fuel handling and safety compliance to environmental compliance.
Your business permitting fees can range from $10,000 to $50,000, depending on your state.
Restocking the store adds more to your monthly budget.
You will be required to keep shelves stocked with beverages, snacks, tobacco, and other in-and-out purchases.
For the initial inventory, you are shelling out up to $30,000. After the initial order, you will restock based on your projected or current sales, but your restocking costs are likely to be substantial.
If you enter into a franchise arrangement, you might be charged royalty fees. Some franchises ask that you keep your cash position at certain levels, which adds even more pressure operationally.
Marketing is another cost to consider.
If you want to ensure you stay on your customers’ minds, you will have some costs, either with signage, advertisements, or incentives to bring customers in.
Marketing costs are soft, but again, over the long haul, could add up to thousands.
Thus, the overall ongoing expenses of a gas station can be in the $96,000-$130,000 range.
The point of all of this is simple: running a gas station is management-heavy. If you want to be profitable, you will need to manage incoming cash inflows and outgoing costs.
Break-even point:
So, once you have made up your mind to start a gas station, you’ve started visualizing a million dollars in revenue. The next question that comes to mind is, when does the station start making profits?
In general, a gas station takes anywhere from 1 to 3 years to become profitable. That means, after opening a gas station, it usually takes between 1 and 3 years for the total money earned (revenue) to become greater than the total money spent (including setup costs and ongoing expenses) — which is when the business starts making a profit.
There can be a few things that help expedite this process: A great location, a high traffic count, and not just offering gas.
If the station is just a basic gas pump location, then it could take longer to break even, but if a good store is run at the station, maybe even a car wash or EV charging station, then the station could break even sooner.
Franchise stations could take a little longer to break even because of startup costs and royalties. Independent stations could be lower in startup costs; however, they are more dependent on the owner and how well it is run.
In either case, profits grow over time as customer traffic builds up.
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Types of gas stations and their profitability
Here are some gas station business models you can start with:
Franchised gas stations:
These gas stations operate under larger national or global brands like Shell, Exxon, BP, and Chevron.
People are generally more inclined to stop at these stations because they recognize and trust the brand name. This trust may result in more consistent customer traffic and fuel sales.
It does come at a cost, though; when you are part of a franchise, you must abide by certain standards and pay fees.
You don’t have complete control over pricing, marketing, or even what products you can sell in your store.
The brand decides many of those issues, which can limit your flexibility as an owner. You usually pay a fee as part of the franchise, in addition to possible royalties or marketing fees.
The benefit is that the brand will help generate business, especially in high-traffic or competitive areas.
Independent gas stations:
Independent gas stations don’t operate under a major brand. You are not required to follow the franchise regulations, and you do not pay the franchise fees.
This gives you much more flexibility as you run the business. You pick who your fuel supplier is, you set your own fuel prices, and you choose what you would like to sell inside the store.
And you can even introduce a service for your community or develop promotions for your customer base. Overall, the start-up cost is typically less because you are not paying for the name.
However, the downside is that it is harder to have people stop in if they’ve never heard of your brand. Or someone opens a franchise near you.
So, you will have to work harder to establish a level of trust for those customers so that they will return.
What you can still do to build your brand is by offering clean storefronts, friendly service, and appropriate pricing are always key to these customers.
If you can establish a good reputation in your area, then independent stations can be as profitable, or more profitable, than major brands.
Full-service vs. Self-service gas stations:
Full-service gas stations are less common than they once were. However, they still exist in some places.
At a full-service station, attendants pump the gas for you. They may also offer help with things such as cleaning the windshield or checking oil.
For customers, this service has convenience, and it also allows for a premium for the higher cost of fuel or service.
The downside for the owner is the labor cost, which means employees are working multiple shifts.
If you are going to operate a full-service gas station, to make it viable, you will either have to have very loyal customers, or it must be in a location where full service is expected.
Most gas stations these days are self-service stations, where customers pump their own fuel, which directly correlates to the stations’ cost of labor.
Over time, this becomes a more cost-effective and profitable fuel model compared to non-self-serve gas stations. You can still provide great service in the store or at the cash register, but the actual fuel operation is almost fully automated.
Self-service stations create a better experience in more fast-moving areas or competitive markets where fuel price and speed of service matter more.
Each station format has its advantages and disadvantages; choosing one depends on your locale, your customers, and the type of customer experience you want to have at your station business.
How to maximize profit in a gas station business?
Here are some tips that can help you make your gas station business successful and profitable quickly.
Choose a high-traffic, convenient location:
A good location can dramatically boost your gas station’s revenue.
Stations that are in close proximity to highways, busy intersections, and city centers typically receive the highest customer volume.
Customers are more inclined to stop at your station when it is easy to access and near where they are already traveling.
The more traffic that passes your station daily means more potential sales opportunities—not just on fuel, but on everything else you offer too.
Add services that go beyond selling fuel:
Gasoline sales aren’t enough to earn decent profits, so adding services definitely helps.
Think about convenience store items, a coffee corner, or food such as sandwiches for those who just want a snack or drink.
Other services like car washes, air for tires, or propane tank exchange can also generate additional, consistent revenue.
EV charging stations are a good revenue addition and provide opportunities to draw in electric vehicle operators in an expanding market.
Negotiate better fuel prices and use smart pricing tools:
Given the very small profit margin on fuel, even simple savings can have a huge impact.
Work directly with your fuel supplier to obtain the best pricing and delivery periods.
Using technology that will automatically change your fuel pricing based on local competition and wholesale prices will help you stay competitive.
In this way, you are not going to lose money by underpricing or lose customers by overpricing.
Use technology to manage inventory and sales efficiently:
Operating a successful gas station requires diligently monitoring a ton of little details.
AI tools and contemporary technology will allow you to determine precisely which goods are flying off the shelf and which ones are sitting idle.
These systems help you not to overstock, lower waste, and ensure that your bestsellers are always in stock.
Additionally, it helps to save time that can be put to better use and assists you in making profitable and well-informed business decisions based on real data to help encourage growth.
Build a strong loyalty program and make payments easy:
People enjoy rewards, and a robust loyalty program helps ensure they return to your station.
Customers can earn points (for purchases), gas discounts, or free coffee after a certain number of visits. Be sure to offer easy payment options for credit cards, mobile apps, or contactless payments.
When customers feel they received a little something extra, they are more inclined to choose your station, even at a slightly higher price.
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Challenges and risks of owning a gas station:
Like any other business, owning a gas station comes with a number of risks as well.
I have outlined a few so you can easily think about them before opening one.
Fuel prices change often and cut into profits:
Gas prices can change rapidly and frequently. When the wholesale price rises but you don’t have time to increase your pump price, that margin will get squeezed. Or the prices went down, you will also suffer at that time.
Even a small fluctuation in fuel prices can significantly impact your bottom line.
This unpredictability affects your monthly cash forecasting and requires you to monitor gas pricing daily.
Big retailers and local stations bring heavy competition:
The fuel business is quite competitive.
You aren’t only competing with small stations; you’re competing against large chains like Walmart or Costco.
They are able to provide lower fuel prices because they sell fuel in bulk and offset their losses through products sold in the store.
To compete, small station owners will need to emphasize great service, well-maintained facilities, and building a loyal customer base in the community.
Environmental rules and permits can be tough:
Gas stations operate under strict environmental regulations. You need permits for underground fuel tanks, as well as air quality and waste disposal.
A small failure, like a fuel tank leak, can lead to large fines or the possible shutdown of the operation.
It is time-consuming and costly to stay compliant and safe, but it is necessary to operate legally.
Electric vehicles are growing fast:
With each passing year, electric vehicles are gaining more traction. In the first quarter of 2025, nearly 300,000 electric vehicles (EVs) were sold in the U.S., which is around a 10% increase compared to the same period last year, according to Kelley Blue Book.
In turn, fewer people will need to refuel in the future.
To continue accumulating customers, many stations are beginning to install EV charging stations in order to appeal to a different type of customer and prepare for the long run.
Theft and fraud are real risks:
Gas stations usually deal with cash, which increases the risk of theft.
There is additionally fuel theft, drive-offs, or even scams using fake credit cards.
Each of these risks can be reduced with security cameras, proper employee training, and secure payment systems.
Theft is still something that daily station managers and owners have to monitor closely.
In conclusion, we can confidently say that, gas station is a good business to start. It can bring you $100K to over a million profit, depending on many factors.