friggin gas stations!!

supergreen125

supergreen125

Experienced Member
Joined
31 October 2002
Messages
601
Location
OC/SD, CA
why is it that a gas station can charge $1.97 for a gallon of gas from their tanks in the morning... then later that same day, charge $2.05 for the same exact gas... which they purchased last week when it was $0.15 a gallon cheaper????
shouldn't the price go up when the new truckload arrives???
anyone here own a gas station? please enlighten us.
 
When in Vancouver (Surrey to be exact) I noticed one station that frequently changed their price of gas as much as 5 times in a single day.:confused:
 
Simple Economics

why is it that a gas station can charge $1.97 for a gallon of gas from their tanks in the morning... then later that same day, charge $2.05 for the same exact gas

It is called supply and demand. Now ask yourself, "Where does gasoline come from?". Refinery margins (profits) are very very thin due to the complex nature of an extremely competitive industry. A better indicator of what gas will cost is to monitor crude oil futures. Things like war will have marked impact on crude oil prices. And while gas is gas, oil is not oil. A refinery will use one process to produce finish products from West Texas Intermediate crude; however, and entirely different process is used to make gasoline from North Sea Brent crude. The cost of converting crude oil to gasoline is always passed on to the consumer. Simple economics, really.
 
Hour by hour

I see some stations now that have electronic price signs up. This would theoretically allow the station to change the price on a continuous basis based on the current demand. For example, during commute hours the price might be a little higher, while during the mid-afternoon a bit lower.

I don't see a problem with this -- let the market drive the price. The amount that the station owner paid for the gas is not particularly relevant as to what he can sell it for.
 
My EX's dad owned many gas stations in the Chicago suburbs and he would always say that if the gas was $1.75/gallon that he only made 5 to 10 cents per gallon as the owner. The rest went to taxes and manufacuring. Not sure if he was full of it or not, but I think he was telling me the truth.
Aaron
 
flaminio said:
I see some stations now that have electronic price signs up. This would theoretically allow the station to change the price on a continuous basis based on the current demand.
Click to expand...
This way, they could raise the price by 20 cents a gallon whenever a car drove in their driveway, before it got to the pumps! :eek:
 
Nimbus said:
I noticed all the gas stations here in SoCal jumped ~10 cents per gallon yesterday. What's the news??? :confused:
Click to expand...

I take my earlier post back. Driving around outside today I noticed the price is up ~20 cents per gallon since 2 days ago. I still don't know the news that caused the sudden hike. :confused:
 
yep. 20 cents. ......for the same gas that was sittin in their tanks a week ago.
i need a mr. fusion.
 
My co-worker's dad owns a gas station and he told me that they don't really make money from selling gas. They actually make more money from working on cars. So Aaron's EX's dad probably is telling the truth.

I understand that as a gas station owner, I can jack up the price anytime I want, but how do they all move up and down together through out the city? Do they have a network or a daily index that tells them what each day's price is in the general area? :confused:
 
I'm not an economist (or whatever specialty field this falls under), but if supply and demand dictates the rise and fall of prices, then why did they price of gas spike so high this past couple of days? Was there a sudden influx of drivers that all of a sudden required the price to shoot up? And when far off situations imply that more fuel is coming our way, I've NEVER seen a similar price drop (in the 10 - 20 cent range) over a period of a couple of days.

Bottom line to me, I still feel it's GOUGING and somebody is taking advantage of the consumer.

-Randy
 
Supply and demand only mean something in a free market with competition. The oil market is not a free market with competition. There is a trust called OPEC that basically controls the price of oil. As was mentioned before, the gas stations have little control and barely make a profit.

Supply and demand have about as much effect on the price of gasoline as it does on the price of Microsoft's next operating system. They will simply charge what they want to and the consumer will pay for it. The price will not affect how much sales volume they do. Do you know anyone who purchases less gas when the price is higher?
 
Eric5273 said:
The price will not affect how much sales volume they do. Do you know anyone who purchases less gas when the price is higher?
Click to expand...
Yes, absolutely. Certainly, there are some people who drive as a necessity (e.g. commuting to work where there are no alternatives), and others who can afford gas regardless of fluctuations in price. But when prices go up, there are going to be some people who do less driving, by combining trips, avoiding trips, and/or using alternative means of transportation (carpooling, public transportation, etc). The price of gas can also be a significant factor for someone planning a long-distance trip and evaluating whether to drive or fly.

Elasticity of demand - the percentage that demand goes up or down with a given percentage change in price - for gasoline may be less than some other products. But demand most certainly does go down when prices go up.
 
supergreen125 said:
why is it that a gas station can charge $1.97 for a gallon of gas from their tanks in the morning... then later that same day, charge $2.05 for the same exact gas... which they purchased last week when it was $0.15 a gallon cheaper????
shouldn't the price go up when the new truckload arrives???
anyone here own a gas station? please enlighten us.
Click to expand...
You guys in California are getting Screwed. Gas in the southeast is 159.9 for 93 octane:eek:My (single) sister in law lives in Walnut Creek California, makes almost 300,000 a year and she still bums money from her father. My wife and I visited her last year on the 4 July,I couldn't believe the small town house (1,400 sq ft) cost her $275,000. After spending a week I can understand why she stays broke especially after seeing the tax structure California has.
 
Last edited:
Eric5273 said:
Supply and demand only mean something in a free market with competition. Do you know anyone who purchases less gas when the price is higher?
Click to expand...

Yes I do, ME:) I have stations that routinely adjust prices, sometimes even on the same day. Many of them will discount premium to the same price as mid-grade certain days of the week. I will put off supply runs for the office, or going shopping for other things until one of the stations on my work circuit drops the price, even swapping cars to drive the one that still has gas. If I have to buy at the "higher" price, I just put in two or three gallons instead of filling up.
 
As long as there is no crisis a gas station owner can charge as much or as little as the they wish. It's the American way and it's a good one.
 
nsxtasy said:
Elasticity of demand - the percentage that demand goes up or down with a given percentage change in price - for gasoline may be less than some other products. But demand most certainly does go down when prices go up.
Click to expand...

Well, you are correct. Maybe I mispoke. Demand does have some effect on price. It just has much much less an effect than with most things. Keep in mind though that if the price of gas goes up and more people decide to fly when they go on vacation, that planes run on fuel also. So do buses, and most other means of transportation. So total oil sales may be less effected than it would seem. I think you could make a better argument that the price of gasoline effects car sales more than gasoline sales. Just look at Europe where gasoline prices are so high. Cars with smaller engines tend to sell much better over there.
 

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