You may have noticed prices gradually falling at your neighborhood gas station over the last few months, what you may not know is that the price of oil has been falling even faster than that. Why aren’t station owners passing the savings on to drivers? They’re in a generally low-margin business, and we’re all still buying gas anyway.
Gas costs about a dollar less nationwide right now than it did a year ago, which is putting more money in consumers’ pockets for other things, and making drivers more cheerful in general. The problem is, while that’s a nice decrease, oil prices are down about 40% since earlier this year. The price that we pay for gasoline hasn’t kept up with that. During that same period, investment bank Goldman Sachs estimates that gas stations’ profit margins are 18.5% higher than they were at the same time last year.
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17 comments:
Gas station owners rarely purchase at the spot price; they usually hedge. More than likely, most gas station owners are locked into contracts that are higher than what oil is currently trading for.
Gas stations are private businesses and as such are free to charge what they want for their product.
If they collude to fix prices, that's against the law, but otherwise they're free market entities.
There's not a lot of margin for retail gas stations. Can't really blame them for making some extra money when there are times when they might be clearing single digits. And they're likely dealing with hedged distributors.
Keep shopping around and buy at the cheapest station. That will drive the prices down. It's called free market economics.
So easy to just drive over the state line to buy gas.
The gas being sold now was refined from oil costing quite a bit more than it does now. It takes time for lower oil prices to work through the refinery and distribution system to the price you pay at the pump.
What about all of the companies that have gouged us for years with 'fuel surcharges' and 'fuel adjustment' fees, such as UPS, propane companies, etc. When do these fees get removed? They are just like the government - once a fee or tax goes on, it stays on, whether justified or not.
I don't care what topic it is, there is always a dozen experts on the subject.
704-It's not hard to actual look into the topic, but of course you can keep jawing on without researching.
This is the time for Americans to give the Middle East the finger. Consume as little gasoline as possible. make the US self sufficient.
Dry up US dollars to the Arab countries.
Make it like the war effort of the 40's "It is your patriotic duty to consume as little gas as possible".
I'm amazed that no one has addressed this fact: When word gets out on the news that the price of crude is up, The stations IMMEDIATELY raise their prices. It doesn't take a few weeks or even a few days for the price to jump as much a 8 or 10 cents the day after the rise in oil prices,
Not so - never - when the price of crude is lowered.
Happens EVERY time.
Am I the only one that notices this?
Anonymous Anonymous said...
704-It's not hard to actual look into the topic, but of course you can keep jawing on without researching.
December 16, 2014 at 7:43 PM
at least TRY to be relevant. conehead
Happens EVERY time.
Am I the only one that notices this?
December 16, 2014 at 9:11 PM
No you're not, but thanks for saying it.
maybe 704 can research that
9:28 When someone writes something that makes sense, you call them a name? Joe, can't we put an age verification up?
Regionally we are getting scalped. As reported on nat'l news earlier this week, 13 states have locations selling gas at LESS THAN $2.00 a gallon. The nat'l average price for a gallon of gas was just reported to be $2.53 per gallon. Whereas this area is HISTORICALLY less than the nat'l average, you cannot find a station selling at, or below the nat'l average, in this area.
Yes, we are getting scalped at this time. Merry Christmas from your local retail gasoline distributors! The price will not drop locally, and the distributors will not compete with one another with their lower price for product, until after the new year. It'll come, but not until they screw us all they can.....Happy Holidays!
Want to get even with the grinches stealing Christmas with their over priced gas? Just buy gas from the gas shops (hey, we have to have gas), and nothing else. Don't buy their cash-cow coffee, sodas, food, snacks, or cigarettes from them. Buy all that somewhere else that DOESN'T sell gas. That's what I'm doing. If a lot of people do that, it will bring down their over charges for gas products quicker than anything else. After all, gas is supposed to be the low margin come-on product that gets you into the store to buy their high margin items.
You are correct in your observation. I notice it too.
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