Oil Prices vs. the Price at the Pump
So when oil goes up, like it was on a daily basis, the price at the local gas station immediately goes up. Back during the huge increases, it actually changed 2 or 3 times a day.
So now oil has fallen below $100 a barrel (from the high of around $140) and I've seen just small changes at the pump and it takes days after oil drops for the price to go down even .02.
So does this not prove how badly we are/were being gouged by big oil?
10/1/2008 3:08:20 PM
no.
its not to say we aren't being gouged, but at the same time it doesn't prove shit.
the gas in the tank at the gas station you are pumping still cost the owner of the station the same.
10/1/2008 4:11:27 PM
$3.39 at my friendly neighborhood gouger
10/1/2008 5:46:43 PM
Milhouse is correct.
Your local dealer has to sell what he bought at an appropriate price to what he paid for it. Remember, the local gas station is a LOCALLY OWNED FRANCHISE, not an extension of the EXXON/MOBIL juggernaut. They're just small businesses too, and their markup isn't really very big actually.
Here on Main Street, it's pretty much all hand-to-mouth...
10/1/2008 6:48:11 PM
Well, if the prices go up 10 cents in three days as a hurrican approaches, it should go down 10 cents after the processing plants go back online at fult tilt.
If gas goes up 10 cents when the cost of oil goes up $15 a barrel, it should drop 10 cents when it goes down $15.
The costs go up much much faster when the rpices rise because of the "get ahead" factor gas companies use. They take advantage of th market because they know they can slow the drop of prices on the other end when the prices come back down.
Ronin is right, this is profit taking and the slowness of the prices receding is definitely not proportional to the speed that they go up.
And you can sit there, watch the prices go up and not see any gas deliveries (another fallicy). They claim they get deliveries, the wholesale prices went up,s o they have to raise their prices locally. That's crap.
They move the prices up without having received any deliveries.
Chevy Volt, here I come.
10/1/2008 7:09:54 PM
yeah?
why would you drop YOUR price, if the guy accross the street still has expensive inventory he has to move at the higher price???
and why would you NOT raise your price, if your competitor just did accross the street? if you didnt you'd be running a charity.
again, like morganic said, the local franchise owner is just trying get by.
the cost of oil and the cost of gas are not 1-1 related.
its not crap. its also not that hard to figure out.
10/1/2008 8:04:17 PM
Not buyin ot Rawg.
Inventories move at about the same rates. If it were me, and the guy across the street is 5 cents higher, I'll get more business (and profit) by sheer volume. Supply and demand.
It's all greed. It all sucks.
Chevy Volt, here I come. Two of them, one for me, one for the wife. Rent a subcompact if I have to drive any more than one state away.
Heat the house with anthrocite and wood.
No more OIL down with the black gold! Repent!
10/1/2008 8:46:04 PM
Oil usually trades on futures, anywhere from 1 day to 1 year, while gas is real time. Obviously there is a lag between the time an amount of oil is picked up and the time it reaches the pump. In fact many weeks. I know it seems like a raw deal but look at it this way.
You buy gas every Thursday cause that's when you need it.
1st Thursday Oil= 110 Gas=3.50 you buy some
2nd Thursday Oil=110 Gas=3.50 you buy some
NEXT day Friday Oil=100 Gas=3.50 you don't need
Following Monday Oil=100 Gas=3.40 you don't need
3rd Thursday Oil=100 Gas=3.40 you buy some
So for 2 days oil went down and gas didn't.
for 3 days gas price caught up and you still didn't buy.
So what's the difference to you? You cannot expect the two prices to track each other so closely. Certainly not daily.
10/2/2008 6:34:10 AM
I've seen Irving put a Sunoco out of business because Irving lowered their prices and there were lines into the street to get gas there - when gas is around $4 a gallon even pennies off matter...well they matter to the mind - in reality you save a few dollars a fill up - but we're driven by our subconsciousness. I've also heard about a station right now selling gas below $3 a gallon and the owner said the more he sells the cheaper he can get it - it's all volume. Stations that keep prices consistent - not necessarily the lowest but don't spike every time there's a news bulliten - those are the stations that get my business.
10/2/2008 8:35:13 AM
"the gas in the tank at the gas station you are pumping still cost the owner of the station the same."
RIght. So how does this explain why it goes up .25 in one day when it's the same gas in the tanks? It should work both ways.
10/2/2008 10:20:19 AM
no it shouldnt.
why are you trying to screw the little guy?
if i sell gas, and i know that it just went up 25 cents, i'm raising my price too.
Mama didn't raise no fool.
the govt is going to take 1/2, i gotta pay people and run my gas station.
every bit of profit means i can sock away some and send my kids to college.
you dont like it, go by a chevy volt that doenst exist or by a nice bike.
10/2/2008 11:01:39 AM
Gas is a very tight margin for station owners - hence trying to sell snacks & sodas... and/or to have a service station and inspections to turn a profit.
Gas stations that are "just gas" are few and far between because you NEED to sell other goods and services to make ends meet.
If owners raise their prices to match competition, it's not because they want to redecorate their 5th guest-room in their mansion... it's because they need to pay their bills too.
For MOST of them, it's not greed.
There was a station in N.Andover a few years ago that temporarily "closed' his station when gas prices were going up. He couldn't bear hearing day-in and day-out people berating "him" for the prices - as if it were HIS fault... and he closed until the prices fell a little. He couldn't afford to stay open and pay people WITHOUT raising his price.
They are not all out to git' ya.
10/2/2008 11:15:47 AM
My buddy did the same thing a few years ago-
Put up a sign that said "walk or ride a bike, not selling gas anymore, too expensive" and shut off his pumps
Now he takes cash only to keep his costs low
f*cking guy always has a line
10/2/2008 11:19:07 AM
actually if its the guy i am thinking of, he stopped selling gas, and just does service & inspections.
10/2/2008 11:21:01 AM
It sucks for the small station owners - or even worse, the EMPLOYEES of the small station owners that hear an ear-full every single day about the cost of gas - as if it's the fault of the 19-year-old behind the counter - like HE is setting the price of gas.
And I DID buy a commuter bike this year and rode to work on it a good amount. Not such a bad deal except for needing to shower once I get to work.
10/2/2008 11:22:08 AM
Stunt, your plan of lowering prices to make more money is retarded.
what you gonna sell it at a loss and make it up on volume?
10/2/2008 11:22:28 AM
did you run a .com company in the late 90s?
10/2/2008 11:22:45 AM
how much extra gas do you gotta sell to be able to drop your price 5 cents?
i bet you worked that out.
10/2/2008 11:23:17 AM
fkit, i blame those fat cats.
10/2/2008 11:23:30 AM
you should offer 95DollarDemo.com, i bet you'll make up the difference in volume.
10/2/2008 11:24:11 AM
Big Oil Companies are screwing us that is not a real mystery...
We need to stop supporting them by limiting our driving and filling up less...Yes, this is easier said than done when you NEED to commute long distances for work..You think you save by buying a new compact BUT a) you now have a car payment (most will I am sure) and b) you still have to fill the GDmed thing..
Alternative fuel and hybrid autos are out of the price range of many..In fact, many of the people that NEED to purchase an alternative fuel or Hybrid auto just cannot, so the vicious cycle of needing to fill up my 5-10 year old car to get to work to support my family and keep my house,rental, or apartment, continues...Big business will always make a profit and we will always get screwed...Such is life hopingfor1dollaragallonagainadvice.com
10/3/2008 10:33:49 AM
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