Let's say you own a Gas Station..

PhoenixMA · 08-31-2005, 12:47 PM

and you have a total capacity of say 15k gallons..now ya get told that you may not get your next 2 or 3 regular resupply shipments. your profit margin on that gas is based on your regular rate of sale and resupply. but your supply just got cut. when you run out there wont be any more for a while...say a month.

well the creditors for your business still want to get paid. but you have no product to sell to earn a profit to pay your creditors. what do you do?

Increase the profit margin on the supply you have left to carry you through till you have more inventory so you can pay your creditors.

Now this scenario is for the guy that owns the station ,,NOT for the guy that owns Shell or Mobile. And just cuz the sign says Exxon doesnt mean the guy that owns the station is the "Big Oil" baron, its called franchise. Ray Croc doesnt own every McDonalds.

rile1564 · 08-31-2005, 01:15 PM

Then I guess it's lucky for the station owner that Bush tapped the reserves. Now gas will still be comming into the station and he can still make his profit for his creditors.

Champlain Islander · 08-31-2005, 02:20 PM

It isn't the retail seller that is gouging it is the wholesale supply that gouges.

summit daWg · 08-31-2005, 07:17 PM

We don't have that problem out here since not a drop comes from the gulf, there are NO disruptions of production on the North slope but we are still being bent over to the tune of $3 or more a gall

on tonight!!!

Quote:

ORIGINAL: PhoenixMA

and you have a total capacity of say 15k gallons..now ya get told that you may not get your next 2 or 3 regular resupply shipments. your profit margin on that gas is based on your regular rate of sale and resupply. but your supply just got cut. when you run out there wont be any more for a while...say a month.

well the creditors for your business still want to get paid. but you have no product to sell to earn a profit to pay your creditors. what do you do?

Increase the profit margin on the supply you have left to carry you through till you have more inventory so you can pay your creditors.

Now this scenario is for the guy that owns the station ,,NOT for the guy that owns Shell or Mobile. And just cuz the sign says Exxon doesnt mean the guy that owns the station is the "Big Oil" baron, its called franchise. Ray Croc doesnt own every McDonalds.

randyh · 08-31-2005, 07:59 PM

We hear you here in Canada - our gas in Winnipeg jumped a nickel a litre (4.54 litres make 1 imperial gallon) over night. Price right now = $1.08 litre or $4.90 a gallon CDN. Local papers are quoting oil sources here as saying it's because of Katrina. Now I bought gas today at my retailer, who is selling me gas extracted & refined here in Canada. And the gas has been sitting in his tanks for more than 1 day. So should I believe it when I hear that no one is taking advantage of the situation down in the Gulf?

Champlain Islander · 09-01-2005, 05:35 AM

I just saw on CNN that stations in Atlanta are charging $6 a gal. I hope they stringthepeople up that are responsible. I guess the Gov is looking into the matter and vowed to find out what the stations are paying per gal and said if they increased their profit margins he would consider it gouging and prosecute.

hillbillyhunter1 · 09-01-2005, 08:21 AM

Quote:

It isn't the retail seller that is gouging it is the wholesale supply that gouges

I'm not sure I believe that Champlain, but perhaps you are right. I don't quite understand the exact process with the price jumps at the local level and I'd like someone to explain if possible.Example: the price per barrel goes up on the wholesalemarket. Then how can we see an immediate "jump" in prices at the retail station. The gas they bought three days ago is what is sitting in their tanks, right? They already paid for that, right? (or wrong?). Why wouldn't they raise their prices after the next shipment (which had also increased in price) instead of immediately?. I was going thru town here last night (Helena) and every store had raised it's price 20 cents since yesterday ( 2.68) for the cheap stuff. But, one store by itself in a different part of town still had it at $2.48. Would someone please explain.Is it just a matter of more frequent shipments then I suspected (daily) or what?
Thanks
hb

PhoenixMA · 09-01-2005, 09:16 AM

the average profit on a gallon of gas at retail level is about 10 or 12 cents. Thats according to a friend of mine who owns 5 gas stations. the gas is delivered and paid for on net terms, that means they have a certain number of days to pay off the delivery. Their next delivery will cost even more and they know it ahead of time to to cover that they increase the retail price of the product in the tanks to defray the cost of the next delivery.

I agree that the overcharging is at the wholesale level. My point here is that people will be taking out their frustration on these poor guys that are just trying to make a living and keep their businesses open. The investigations or price controls need to be looked at at the right level. Otherwise the small business owner is going to go out of business then folks will have nowhere to buy the gas they need.

summit daWg · 09-01-2005, 10:02 AM

If they have Regular in the tanks they paid $2.70 for ...... I bet they have premium in the tank they paid $2.40 for. Are they sellng it for less?
THAT is what Burns my a$$. I have 2 classic '69 -72 Chevy Big block high compression trucks that need at least plus,and I'm tired of paying the majority of the profit to the retailer so these big boyshaven't moved much in the last year! Not to mention the fuel is old and wthe less liquid in that tank= the more water and crud you get with it.

hillbillyhunter1 · 09-01-2005, 10:27 AM

Amen about that summitdawg, (that made a helluva lot of sense to me)
how in the hell could they go through that premium gas in a time like this when prices are rising rapidly. So the retailers would have to be jacking their margins up on that type of deal. Also, who, in any other business, jacks up their current price to compensate for an increase in cost of goods that they haven't even purchased yet. I'm not saying the big oil companies aren't crooks--they definately are. but the retailers aren't totally innocent either.

And what about price fixing. Ever notice almost all gas staions in a little area always have the same exact price--think that's coincidence?