Too many fuel service stations?

[Dave A]

An attempt to bring down running costs at petrol stations by reducing open hours has failed to gain support from garage owners.

Unable to get enough support from service station owners to close at night, the Fuel Retailers' Association will instead ask the department of mineral and energy affairs for higher profit margins.

"We are meeting the department at the end of July to talk margins," said Peter Morgan, chief executive of the association, conceding that motorists would have to shoulder any increase service stations were allowed.

The association announced a week ago that it was drumming up support among its members to lobby the government to pressure oil companies to close service stations at night. Contracts with oil companies stipulate that garages must remain open 24 hours a day.

But on Tuesday Morgan said hopes of closing at night were short-lived because many service stations did a busy trade at night.

To help service stations struggling to survive periods of soaring fuel costs, the association wants an increase in gross income margins, which are currently less than 6 percent.
full story from IOL here

We all know who will end up footing the bill for any increase. But I was thinking - maybe there is simply too many fuel service stations. It is pretty rare that they are busy enough to have to queue. Perhaps a few less wouldn't hurt. Or is that being a bit rough?

[duncan drennan]

But I was thinking - maybe there is simply too many fuel service stations. It is pretty rare that they are busy enough to have to queue. Perhaps a few less wouldn't hurt. Or is that being a bit rough?

It is an interesting one, mainly because their fuel profits are regulated. An ever increasing fuel price does not necessarily mean higher profits though (demand may go down). If the price was deregulated Raymon Ackerman would jump into the market and probably put a lot of small service stations out of business anyway.