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Thread: Question about gas prices

  1. #9

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    Another reason no one mentioned is that you pay the market price for gas, it doesn't matter what the producer or anyone else bought it for. This even happens with food and everything else. Last week at the store the same box of rice I bought was .15 cheaper but I am willing to bet the store didn't sell every last box of rice last week and with the way restocking is usually done I likely bought an older box of rice. It happens, when prices adjust the market changes what they charge for an item. The difference between food and gas is that gas is much more volatile as someone mention, its not likely that rice will go down .10 next week then jump up .30 the week after only to drop .45 a week after that. Now gas thats a real possibility.
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  2. #10
    Loves VFT's! Trapper7's Avatar
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    This is a good discussion....but the outcome still sucks, lol.

    PAK: No, that was just an example price. The Chevron up the street is selling gas for $3.97, but at another gas station that's near my husbands work it's only $3.84, so he gets it there.

    They said the price of gas will be at $4 by the 4th of July. It's already there, so does that mean it'll be at $5 instead?
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  3. #11

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    A quick note: Based on a bit of googling, most generic corner gas stations have an underground tank of 10,000 to 15,000 gallons.

    If you think about that, it's only 1000 to 1500 fill-ups of 10 gallons per customer. Now think about how many people are at a station at any given time, and how long it takes for them to do so. Even in the case of the 15,000 gallon tank, that's a bit more than 200 customers per day, which comes down to only one customer every few minutes (which fits with what I see at the pump).

    Given that, it seems that the gas station probably exhausts most of its reserve inside of a week, two weeks at most, so they're hardly hoarding gas for months on end to make obscene profits.

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  4. #12

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    I've read that local price differences are based upon how much the local economy can handle. If a certain area is convenient and gets lots of traffic that can afford to pay more, gas stations in the area will raise their prices. Unfortunate for the middle to lower class.

  5. #13
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    gas stations only make $0.01 or $0.02 per gallon.....gas stations make their money off of items sold inside........if gas prices go up elsewhere they have to raise the price of the gas they have in their storage tanks or they cant afford to fill up their bulk tanks on the next delivery.......which is why lots of mom and pop gas stations are going out of business or quit selling gas......
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  6. #14
    herenorthere's Avatar
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    Full disclosure: I'm going to sound like a Republican married to Exxon in the following. I'm not, but I just finished nearly 16 years dealing with gas stations for an environmental agency. Now that I've moved on, this post has awakened some nostalgia and I've written too much.

    Gasoline is a commodity and commodity prices vary. Go down to Agway to buy 50 lbs of animal feed and or over to the fish restaurant for a lobster dinner and today's price might not be yesterday's. CT has laws prohibiting a gas station from raising its prices on previously delivered fuel, but most stations get deliveries at least every few days, making it easy to blame any increase on a new delivery. So the prices can rise quickly.

    By the way, of course gas prices are higher in a wealthy area. Gas station properties down in CT's wealthy Republican strongholds sell for millions of $ more than similar properties here. Those wealthy towns also impose all kinds of restrictions on hours of operation, site upgrades and so on that limit their sales. Higher costs divided into lower sales = higher prices. If the people will pay those prices, the gas stations remain gas stations. Otherwise, they'll become something else. As Rattler said, they do make a lot off of junk food sales.

    Prices aren't only high in wealthy areas, by the way. They're high in poorer communities too, whether in a ghetto or out in the middle of nowhere, because much less gas gets sold and that cost/sales equation strikes again. Sprawling suburbs seem to have the lowest prices, since there's enough income to support plenty of business, people are driving every which way, boosting sales volumes, and towns are desperate for whatever commercial development they can get, so they make it easy for gas stations do whatever they want to increase their customer base.

    Gas stations usually have at least a couple tanks and most around here have something in the range of 15,000 - 30,000 gallons of total storage. Gasoline prices being what they are, most of those tanks aren't being filled all the way. Even at the lower wholesale prices, there can be $100,000 in the ground. Most of those big suburban stations are selling 1,500,000 gallons or more per year, so a lot of money passes through their hands and they can make a good income on a pretty small margin. With rapidly rising prices, that business model can fall apart, since the gas station have to pay more to fill the tanks today than they put in the register while emptying them yesterday. It can become a serious cash flow problem and, as Rattler also said, places can go out of business. They keep ordering less and less gas and, eventually, they don't order any at all.

    Gas stations are the market at work in the real world. The powerful game the system, the weak lose their shirts, a resource is wasted, there's plenty of pollution and those getting the benefits don't pay all the costs. It's all of capitalism's advantages and flaws in plain sight.
    Bruce in CT

    Madness is something rare in individuals but in groups, parties, peoples, ages it is the rule. Friedrich Nietzsche

  7. #15

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    I read some stuff a while ago that talked about what rattler said. The goal of a gas station is to have the cheapest gas in the area to lure people to your station, so that they will buy lottery tickets/drinks/twinkies/etc. I think the profit solely from gas sales is ridiculously low.
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    I have no faith in the American free enterprise system whatsoever, and we're all going to die a very slow death at this rate. That's all I've got to say about that.
    Great Googly Moogly!

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