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A gallon of regular gasoline was selling for $3.71 late last week at the Sunoco station at 1491 N. Providence Rd. in Media.

About 270 yards away, the Sunoco station at 1300 N. Providence Rd. was selling regular for $3.68.

The two stations were selling gasoline produced by Sunoco Inc. at one of its three Philadelphia area refineries in South Philadelphia, West Deptford and Marcus Hook.

The difference? The station at 1300 is owned and operated by Sunoco. The station at 1491 is leased from Sunoco by a dealer who must compete on price with his landlord and sole supplier.

That price differential has nothing to do with the price of crude oil, said Ross DiBono, executive director of the Pennsylvania Gasoline Retailers Association. It has to do with the overhead that comes with operating one gas station compared with the overhead that comes with operating hundreds.

And it is just one of the many variables that determine the price consumers pay for gasoline.

To be sure, the price of crude oil is the chief driver of gasoline prices today. Crude oil represented nearly 72 percent of the cost of a gallon of gasoline in March, according to the latest data from the U.S. Energy Information Administration.

Just a year ago, crude oil's cost represented less than half the price of gasoline. Within the last five years, crude oil's cost has represented as little as 39 percent.

That means that all the other components - especially the already thin margins for independent gas stations - are being squeezed. Stations not owned by oil companies generally sell gasoline for about 8 cents a gallon more than they pay for it, according to DiBono. Credit card purchases take about 6.5 cents per gallon from that margin, leaving a penny and a half profit - less than half a penny on the dollar.

Energy Information Administration data divide the cost of a gallon of gasoline into four components: crude oil, refining, distribution and marketing, and taxes.

Gasoline stations find their profit in the smallest segment: distribution and marketing. A year ago, that segment was about 13 percent of the price of regular gasoline. In the EIA's March data, the most recent, it was less than 8 percent. The retailer's share of that small segment is minuscule.

And with their margin amounting to pennies per gallon, independent stations must compete for customers who "believe the guy selling the gas is making a fortune," said Sal Risalvato, executive director of the gasoline retailers' association in New Jersey.

"They're beating each other up out there over pennies," Risalvato said. "This is the worst I've seen in 50 years in the business."

The fact that he sells regular gasoline for a few cents a gallon more than his competitor down the street is certainly not lost on Jim Hess, proprietor of that more expensive Sunoco station on Providence Road.

Like other Sunoco dealers, Hess said he was not allowed to discuss what he pays the refining company for his fuel deliveries. But he acknowledged lamenting his thin margins.

"I'd be happy to compete nose to nose and toes to toes with anyone who has to operate the way I do," he said last week.

Risalvato and DiBono said that Sunoco's station leasees were contractually obligated to buy all their motor fuels from Sunoco.

The refiner delivers the fuel - about 8,500 gallons at a time - then automatically debits the full cost of the fuel from the dealer's checking account three days later. Other refiners deduct the payment immediately, Risalvato said.

At $3.63 a gallon, that is a withdrawal of more than $30,000. From that, a dealer may have about $680 left over for overhead and to pay employees. If half his customers used credit cards, his $680 dwindles to about $275.

"It costs me about 2 cents a gallon for the electricity to run the pumps," Hess said. If his margins are typical, he loses money every time a customer pays with credit.

Risalvato predicted that consumers will see a comeback of discounts for those who pay cash.

Dealers stay in business not on their gasoline sales, but on the sale of other products and services at the station.

At Hess' station, that means some snack foods and auto repairs. "The gasoline sales bring business to the service bays," he said. But the auto-repair business is dwindling at service stations.

"More people are leasing cars these days," DiBono said. "And the people who lease cars tend not to maintain them."

Add new-car sales incentives providing free service during the first 12 to 36 months of ownership, Hess said, and the future looks bleak for the traditional service station.

So many independently owned stations have converted service bays into convenience stores that Risalvato's organization added "convenience stores" to its name last year. It is now the New Jersey Gasoline and Convenience-Store Automotive Association.

The squeeze is not only on the gas stations, but on any oil company that does not have its own oil supply.

Sunoco is a case in point.

Big oil companies that produce their own crude, like Exxon Mobil Corp., are not as nearly squeezed as Sunoco, which buys its crude oil on the open market. Sunoco's core business is to refine the crude oil it buys into a wide range of fuels and other petroleum products.

Much has been said in the presidential campaign about record profits for "big oil," but Sunoco lost $59 million in the first quarter of 2008. A loss of $123 million in its refining business - which includes making and selling motor fuels - was offset by positive results in its other businesses, including chemicals and coke production.

Since that April 30 earnings report, Sunoco shares have lost 6 percent of their value.

Sunoco's shares were trading at more than $80 a year ago. They closed Friday at $43.70, down 32 cents.

Sunoco spokesman Thomas Golembeski said last week that if oil prices rise or fall, the company "will continue as it always has to provide gas that is competitive in the marketplace."

So far in 2008, Sunoco has been able to increase its retail gasoline business - which includes leased stations such as Hess' and its owned-and-operated stations.

For the first quarter, Sunoco reported a margin of about 11 cents per gallon, compared with about 8.3 cents the first quarter of 2007.

For all of 2007, Sunoco reported a margin of about 9.3 cents per gallon, down from about 9.9 cents in 2006.

Sunoco's wholesale margins were down in the first quarter compared with 2007.

Golembeski said the company did not discuss the specifics that drove margins up or down, except to say that they were "incredibly volatile and subject to market-based influence."