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Barriers to Rural Gas Station Development

October 11, 2021
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WRITTEN BY Tomy Granzier-Nakajima and Alan Moss

Executive Summary

The number of gas stations in Missouri has been declining in recent years. There are many barriers that may prevent the establishment of gas stations, including regulations and costs associated with implementing new equipment, particularly in rural areas with low traffic volume and population density. Notably, updates to state regulations for the storage of fuel do not apply to the use of pre-existing equipment provided they do not pose a “distinct hazard to life or property.” Given the slim profit margins on fuel sales and costs associated with an evolving economy, gas stations may rely on providing multiple services beyond fuel to remain profitable. In some rural counties, gas stations can provide residents with basic life necessities (e.g., food) and become a hub for local communities to provide essential services.  

Highlights

  • Pre-existing equipment for the handling of flammable liquids does not need to be updated to satisfy new state regulations unless they are hazardous to life or property.
  • Gas stations have small profit margins on fuel sales, making it difficult for them to survive in areas with low traffic.
  • Additional costs such as those related to the switch to chip readers by credit card issuers can be expensive for gas stations which may be required to replace older gas pumps.
  • Fuel storage tanks are a major expense for gas stations with older models tending to be less cost-effective due to their small size and susceptibility to expensive leaks.

Limitations

  • While the total number of gas stations is declining in Missouri, there is no public data comparing the decline in urban versus rural areas.
  • Data regarding gas station profitability is limited.
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