Price Gougeing
 

If a gas station owner has a 4000 gal under ground fuel tank, and fills it
for lets say a $1 a gal, to make this simple his price to the public is
$1.00 per gal.

A few days later he figures that there is only 1000 gals left in the 4000
gal tank so he orders 3000 gals @$2.00 a gal.

Here's where there ing us, instead of selling that remaining 1000 gals,
left over from the initial 4000gal purchase @ a $1.00 a gal, they raise
there price to $2 a gallon, for everything in the under ground tank. They
just made 100% profit, on that 1000 gals. Then they lie to us saying they
only make penny's on the gal profit,bullshit!

And thats what they are doing ........most are just raising the price
because the guy next door did.

Tom

Re: Price Gougeing
 

twfsa wrote:
> If a gas station owner has a 4000 gal under ground fuel tank, and fills it
> for lets say a $1 a gal, to make this simple his price to the public is
> $1.00 per gal.
>
> A few days later he figures that there is only 1000 gals left in the 4000
> gal tank so he orders 3000 gals @$2.00 a gal.
>
> Here's where there ing us, instead of selling that remaining 1000 gals,
> left over from the initial 4000gal purchase @ a $1.00 a gal, they raise
> there price to $2 a gallon, for everything in the under ground tank. They
> just made 100% profit, on that 1000 gals. Then they lie to us saying they
> only make penny's on the gal profit,bullshit!
>
> And thats what they are doing ........most are just raising the price
> because the guy next door did.
>
> Tom

dude, the retailer /is/ making pennies. but the /refinery/ has stepped
up it's margin to 20%. at $70 per barrel, you do the math.

oh, and don't forget that [unnecessary] oxygenates reduce mpg's so you
have to buy more of the stuff. and don't forget that we subsidize
[oxygenate] ethanol production to the tune of billions of dollars each
year. and don't forget that we're also being asked to pay a premium for
oxygenated fuel. can you say triple whammy? are we getting gouged?
sure! but it ain't the retailer.

Re: Price Gougeing
 

jim beam <nospam@example.net> wrote in
news:-fGdnUmByMOl8oveRVn-1Q@speakeasy.net:

> twfsa wrote:
>> If a gas station owner has a 4000 gal under ground fuel tank, and
>> fills it for lets say a $1 a gal, to make this simple his price to
>> the public is $1.00 per gal.
>>
>> A few days later he figures that there is only 1000 gals left in the
>> 4000 gal tank so he orders 3000 gals @$2.00 a gal.
>>
>> Here's where there ing us, instead of selling that remaining 1000
>> gals, left over from the initial 4000gal purchase @ a $1.00 a gal,
>> they raise there price to $2 a gallon, for everything in the under
>> ground tank. They just made 100% profit, on that 1000 gals. Then they
>> lie to us saying they only make penny's on the gal profit,bullshit!
>>
>> And thats what they are doing ........most are just raising the price
>> because the guy next door did.
>>
>> Tom
>
> dude, the retailer /is/ making pennies. but the /refinery/ has
> stepped up it's margin to 20%. at $70 per barrel, you do the math.
>
> oh, and don't forget that [unnecessary] oxygenates reduce mpg's so you
> have to buy more of the stuff. and don't forget that we subsidize
> [oxygenate] ethanol production to the tune of billions of dollars each
> year. and don't forget that we're also being asked to pay a premium
> for oxygenated fuel. can you say triple whammy? are we getting
> gouged? sure! but it ain't the retailer.
>


It ain't the oil companies either. They don't set the prices, the markets
do. Cartels have some influence on prices by way of production control, but
the primary movers of oil pricing are political and emotional, and are out
of oil company control.

Oil companies benefit from a run-up in prices, but do not cause these run-
ups. Exxon saw its net profit margin increase from 8% in 2003 to 9% in 2004
on account of more expensive oil. It's probably up to nearly 10% now.

--
TeGGeR®

The Unofficial Honda/Acura FAQ
www.tegger.com/hondafaq/

Re: Price Gougeing
 

"twfsa" <uksatw@qwest.net> wrote in message
news:y1uRe.3505$rj.1918@lakeread07...
> If a gas station owner has a 4000 gal under ground fuel tank, and fills it
> for lets say a $1 a gal, to make this simple his price to the public is
> $1.00 per gal.

I have never heard of a business purchasing a product for a certain price
and then selling it for the same price. That business would not stay in
business for long. People are in business to make a living or profit.

Brian

Re: Price Gougeing
 

TeGGeR® wrote:
> jim beam <nospam@example.net> wrote in
> news:-fGdnUmByMOl8oveRVn-1Q@speakeasy.net:
>
>
>>twfsa wrote:
>>
>>>If a gas station owner has a 4000 gal under ground fuel tank, and
>>>fills it for lets say a $1 a gal, to make this simple his price to
>>>the public is $1.00 per gal.
>>>
>>>A few days later he figures that there is only 1000 gals left in the
>>>4000 gal tank so he orders 3000 gals @$2.00 a gal.
>>>
>>>Here's where there ing us, instead of selling that remaining 1000
>>>gals, left over from the initial 4000gal purchase @ a $1.00 a gal,
>>>they raise there price to $2 a gallon, for everything in the under
>>>ground tank. They just made 100% profit, on that 1000 gals. Then they
>>>lie to us saying they only make penny's on the gal profit,bullshit!
>>>
>>>And thats what they are doing ........most are just raising the price
>>>because the guy next door did.
>>>
>>>Tom
>>
>>dude, the retailer /is/ making pennies. but the /refinery/ has
>>stepped up it's margin to 20%. at $70 per barrel, you do the math.
>>
>>oh, and don't forget that [unnecessary] oxygenates reduce mpg's so you
>>have to buy more of the stuff. and don't forget that we subsidize
>>[oxygenate] ethanol production to the tune of billions of dollars each
>>year. and don't forget that we're also being asked to pay a premium
>>for oxygenated fuel. can you say triple whammy? are we getting
>>gouged? sure! but it ain't the retailer.
>>
>
>
>
> It ain't the oil companies either. They don't set the prices, the markets
> do. Cartels have some influence on prices by way of production control, but
> the primary movers of oil pricing are political and emotional, and are out
> of oil company control.
>
> Oil companies benefit from a run-up in prices, but do not cause these run-
> ups. Exxon saw its net profit margin increase from 8% in 2003 to 9% in 2004
> on account of more expensive oil. It's probably up to nearly 10% now.
>
but the oil cartels didn't decide to raise refinery margins from 5% to
20%. the oil cartels didn't lobby with the, er, "benefits" of
oxygenated fuels whose only real benefit is reducing calorific content,
thereby increasing sales volume. the oil cartels are not the ones
deciding to use our taxes to subsidize an additive that costs us three
ways. i know a little bit about corporate finance. there's more than
one way to manage your reported figures, especially for multinationals.

Re: Price Gougeing
 

jim beam <nospam@example.net> wrote in
news:kYqdnSok-5j8ZIveRVn-iw@speakeasy.net:

> TeGGeR® wrote:

>> It ain't the oil companies either. They don't set the prices, the
>> markets do. Cartels have some influence on prices by way of
>> production control, but the primary movers of oil pricing are
>> political and emotional, and are out of oil company control.
>>
>> Oil companies benefit from a run-up in prices, but do not cause these
>> run- ups. Exxon saw its net profit margin increase from 8% in 2003 to
>> 9% in 2004 on account of more expensive oil. It's probably up to
>> nearly 10% now.
>>
> but the oil cartels didn't decide to raise refinery margins from 5% to
> 20%.



No, the commodities markets did that. Just look at the current market
frenzy surrounding Hurricane Katrina. Up went the price!

Oil company costs did not go up, just the price of what they sell (except
for repair costs, much of which will be borne by the insurance companies).
Oil companies are not complaining, but they know the jackpot could end at
any time, depending on future events, so they're banking evey penny they
get.



> the oil cartels didn't lobby with the, er, "benefits" of
> oxygenated fuels whose only real benefit is reducing calorific
> content, thereby increasing sales volume.



Thank the EPA for that. Tetraethyl lead was the cheapest additive around,
which is why it was adopted way back. Refineries stuck to that until they
were legislated into using something else (which just happened to be more
expensive and less efficient).

Any legislated alteration or regional segmentation of finshed gas raises
costs to the oil companies. Believe me, they resist all such
"environmental" alterations until forced to carry them by law. This is due
to the costs involved, and the low margins that gas carries.

There is no point in being the only oil company to suffer due to those
enviro costs. Better to wait until everybody is forced to do it, that way
nobody has a costing advantage over anyone else.



> the oil cartels are not the
> ones deciding to use our taxes to subsidize an additive that costs us
> three ways.


For that one, you can thank the farm lobby. Nothing like a bit (lot) of
pork in your home district to drum up a few sales. Note that the strongest
political proponents or ethanol are those with rural districts.

Also, the environuts are irrationally convinced that ethanol is somehow
"enviro friendly", so they add their efforts to the farm lobby.


> i know a little bit about corporate finance. there's
> more than one way to manage your reported figures, especially for
> multinationals.


And my sister is a corporate accountant. she's told me many of those ways.
and there are a LOT. Many times the board gets the report they want to see,
rather thanone that truly reflects the state of the corporatoin, something
it's possible for nobody to actually know...



--
TeGGeR®

The Unofficial Honda/Acura FAQ
www.tegger.com/hondafaq/

Re: Price Gougeing
 

too bad it doesn't work that way.
My brother worked at a gas staion, and they were told what to sell the gas
for. At the end of the month, the suppiler said ok, we told you to sell it
at this price, then this price then this price. So you sold x galons at
this price and x galons at this price, so you own us x amount, leaving 3
cents per galon for yourself as profit. If they choose to sell it for lower
prices, they would lose money...

But who cares, the Honda civic gets 57MGP, only 1 less then the smart
car...as long as your not a dumbass in an SUV or truck, gas is still dirt
cheap!


"twfsa" <uksatw@qwest.net> wrote in message
news:y1uRe.3505$rj.1918@lakeread07...
> If a gas station owner has a 4000 gal under ground fuel tank, and fills it
> for lets say a $1 a gal, to make this simple his price to the public is
> $1.00 per gal.
>
> A few days later he figures that there is only 1000 gals left in the 4000
> gal tank so he orders 3000 gals @$2.00 a gal.
>
> Here's where there ing us, instead of selling that remaining 1000
> gals, left over from the initial 4000gal purchase @ a $1.00 a gal, they
> raise there price to $2 a gallon, for everything in the under ground tank.
> They just made 100% profit, on that 1000 gals. Then they lie to us saying
> they only make penny's on the gal profit,bullshit!
>
> And thats what they are doing ........most are just raising the price
> because the guy next door did.
>
> Tom
>
>
>

Re: Price Gougeing
 

jim beam <nospam@example.net> wrote in
news:kYqdnSok-5j8ZIveRVn-iw@speakeasy.net:

> TeGGeR® wrote:

<snip>

<snip>



Interesting graph out of the paper a few days ago:
http://www.tegger.com/hondafaq/misc/oilprice.jpg


--
TeGGeR®

The Unofficial Honda/Acura FAQ
www.tegger.com/hondafaq/

Re: Price Gougeing
 

twfsa wrote:
> If a gas station owner has a 4000 gal under ground fuel tank, and fills it
> for lets say a $1 a gal, to make this simple his price to the public is
> $1.00 per gal.
>
> A few days later he figures that there is only 1000 gals left in the 4000
> gal tank so he orders 3000 gals @$2.00 a gal.
>
> Here's where there ing us, instead of selling that remaining 1000 gals,
> left over from the initial 4000gal purchase @ a $1.00 a gal, they raise
> there price to $2 a gallon, for everything in the under ground tank. They
> just made 100% profit, on that 1000 gals. Then they lie to us saying they
> only make penny's on the gal profit,bullshit!
>
> And thats what they are doing ........most are just raising the price
> because the guy next door did.
>
> Tom
>
>
>

I was just talking to my friend who has an independent Honda-Acura
repair shop. His price for the next 55 gallon drum of 5W30 is going to
be more. He will be charging the higher price on the half barrel that is
now in his shop. He will need the extra money to pay for the NEXT barrel.
That's the way it has always worked. If you think you can do it better,
open your own store and try it your way.
There's an old joke that goes like this; Two brothers from Ohio drive
to Kentucky and fill their truck with watermelons for a dollar apiece.
They drive back to Ohio and sell them for a dollar each. When they sold
the last one, they figure out what they just did. One brother says to
the other "We need to get a bigger truck." bob

Re: Price Gougeing
 

On Thu, 01 Sep 2005 17:17:10 GMT, "Jamco" <Homer@jamco.com> wrote:

>too bad it doesn't work that way.
>My brother worked at a gas staion, and they were told what to sell the gas
>for. At the end of the month, the suppiler said ok, we told you to sell it
>at this price, then this price then this price. So you sold x galons at
>this price and x galons at this price, so you own us x amount, leaving 3
>cents per galon for yourself as profit. If they choose to sell it for lower
>prices, they would lose money...
>
>But who cares, the Honda civic gets 57MGP, only 1 less then the smart
>car...as long as your not a dumbass in an SUV or truck, gas is still dirt
>cheap!

Hear Hear. I'm a brit, so i'm used to paying $50 to fill up a
civic-sized car. Was only $27 to do it yesterday. Admittedly, thats as
much as it cost to fill my Caravan in Jan, but still, its CHEAP.

>
>
>"twfsa" <uksatw@qwest.net> wrote in message
>news:y1uRe.3505$rj.1918@lakeread07...
>> If a gas station owner has a 4000 gal under ground fuel tank, and fills it
>> for lets say a $1 a gal, to make this simple his price to the public is
>> $1.00 per gal.
>>
>> A few days later he figures that there is only 1000 gals left in the 4000
>> gal tank so he orders 3000 gals @$2.00 a gal.
>>
>> Here's where there ing us, instead of selling that remaining 1000
>> gals, left over from the initial 4000gal purchase @ a $1.00 a gal, they
>> raise there price to $2 a gallon, for everything in the under ground tank.
>> They just made 100% profit, on that 1000 gals. Then they lie to us saying
>> they only make penny's on the gal profit,bullshit!
>>
>> And thats what they are doing ........most are just raising the price
>> because the guy next door did.
>>
>> Tom
>>
>>
>>
>

Re: Price Gougeing
 

Brian , you are right my point is this, the gas stations say they only make
pennys of profit per gal, I think they are making 100% profit, on a certain
amount of the gasoline in there tanks, if you read my first post.

Tom


"Brian Smith" <Halifax@NovaScotia.Canada> wrote in message
news:7JCRe.252248$on1.128821@clgrps13...
>
> "twfsa" <uksatw@qwest.net> wrote in message
> news:y1uRe.3505$rj.1918@lakeread07...
>> If a gas station owner has a 4000 gal under ground fuel tank, and fills
>> it for lets say a $1 a gal, to make this simple his price to the public
>> is $1.00 per gal.
>
> I have never heard of a business purchasing a product for a certain price
> and then selling it for the same price. That business would not stay in
> business for long. People are in business to make a living or profit.
>
> Brian
>

Re: Price Gougeing
 

Waiving the right to remain silent, "twfsa" <uksatw@qwest.net>
said:

> Brian , you are right my point is this, the gas stations say
> they only make pennys of profit per gal, I think they are making
> 100% profit, on a certain amount of the gasoline in there tanks,
> if you read my first post.

Markup is entirely different than profit. Profit is what's left over
after ALL expenses, not JUST the cost of goods.

Economics 101.

--
Larry J. - Remove spamtrap in ALLCAPS to e-mail

The United States is the greatest country in the world..!
Eleven million illegal aliens can't be wrong.

Re: Price Gougeing
 

"Larry J." <usenet2@DE.LETE.THISljvideo.com> wrote in
news:Xns96C4975AA8056larrythefrog@68.6.19.6:

> Waiving the right to remain silent, "twfsa" <uksatw@qwest.net>
> said:
>
>> Brian , you are right my point is this, the gas stations say
>> they only make pennys of profit per gal, I think they are making
>> 100% profit, on a certain amount of the gasoline in there tanks,
>> if you read my first post.
>
> Markup is entirely different than profit. Profit is what's left over
> after ALL expenses, not JUST the cost of goods.
>
> Economics 101.
>


Yeah, sort of like your own household finances. If you take home $60,000
per year, and you spent $54,600 during that year, your profit is $5,400.
(That's about the same percentages as Exxon had last year, by the way.)

With this profit, you can pay off some of the mortgage, buy a new TV, go on
a vacation, get your kid braces, fix the roof, build a fence, all sorts of
stuff. That's what profit is for.

--
TeGGeR®

The Unofficial Honda/Acura FAQ
www.tegger.com/hondafaq/

Re: Price Gougeing
 

TeGGeR® wrote:
> jim beam <nospam@example.net> wrote in
> news:kYqdnSok-5j8ZIveRVn-iw@speakeasy.net:
>
>
>>TeGGeR® wrote:
>
>
>>>It ain't the oil companies either. They don't set the prices, the
>>>markets do. Cartels have some influence on prices by way of
>>>production control, but the primary movers of oil pricing are
>>>political and emotional, and are out of oil company control.
>>>
>>>Oil companies benefit from a run-up in prices, but do not cause these
>>>run- ups. Exxon saw its net profit margin increase from 8% in 2003 to
>>>9% in 2004 on account of more expensive oil. It's probably up to
>>>nearly 10% now.
>>>
>>
>>but the oil cartels didn't decide to raise refinery margins from 5% to
>>20%.
>
>
> No, the commodities markets did that.

the commodities markets don't set what's called the "crack split".
that's refinery mark up. only the oil companies do that.

> Just look at the current market
> frenzy surrounding Hurricane Katrina. Up went the price!

see above.

>
> Oil company costs did not go up, just the price of what they sell (except
> for repair costs, much of which will be borne by the insurance companies).
> Oil companies are not complaining, but they know the jackpot could end at
> any time, depending on future events, so they're banking evey penny they
> get.

end? how can it end? refineries were busily being taken out of
production for "unsceduled maintenence" long before katrina came along.
unless there's more capacity and independent competition, gas prices
are a one-way street.

>> the oil cartels didn't lobby with the, er, "benefits" of
>>oxygenated fuels whose only real benefit is reducing calorific
>>content, thereby increasing sales volume.
>
>
> Thank the EPA for that.

no, thank oil company lobbying of the epa for that.

> Tetraethyl lead was the cheapest additive around,
> which is why it was adopted way back.

lead was essential to reduce knock. it was around long before the
calorific content game was being played.

> Refineries stuck to that until they
> were legislated into using something else (which just happened to be more
> expensive and less efficient).

no, the epa went to look for cleaner burning fuels. these can be
achieved by lower aromatic content, closer molecular weight bands, low
sulfur, etc. but some genius cleverly managed to side-track epa
emphasis into the search for clean burning fuels via "oxygenation" and
hence the opportunity for the consumption of what had hitherto been a
by-product, mtbe. once mtbe was in the mix, the calorific content game
became crystal clear to the oilcos, and the game was on.

>
> Any legislated alteration or regional segmentation of finshed gas raises
> costs to the oil companies.

so they say, but the fact remains that in california, mtbe was mandated
by a govenor whose wife just happened to be a director of a certain
large oilco, who also just so happened to have refineries whose unique
chemistry just so happened to be able to create large quantities of
mtbe. just coincidence you understand. but the real rub came when the
other oilcos, whose refinery processes did /not/ produce mtbe, found
themselves compelled to get gouged for, sorry, /purchase/ a filthy
by-product from a competitor. they complained about /that/ for sure.

> Believe me, they resist all such
> "environmental" alterations until forced to carry them by law. This is due
> to the costs involved, and the low margins that gas carries.

see above.

>
> There is no point in being the only oil company to suffer due to those
> enviro costs. Better to wait until everybody is forced to do it, that way
> nobody has a costing advantage over anyone else.

tell that to the california legislature! we have specially formulated
gas, specially formulated milk..., the special interest lobbying list
goes on and on and on. it's the wild west out here. whoever gets to be
sherrif gets to make the rules!

>
>> the oil cartels are not the
>>ones deciding to use our taxes to subsidize an additive that costs us
>>three ways.
>
>
>
> For that one, you can thank the farm lobby. Nothing like a bit (lot) of
> pork in your home district to drum up a few sales. Note that the strongest
> political proponents or ethanol are those with rural districts.

they're not fools - they know pork when they see it. but i still don't
see why the rest of us have to pay tax to subsidize that pork, then
premium prices, /then/ get inferior product.

>
> Also, the environuts are irrationally convinced that ethanol is somehow
> "enviro friendly", so they add their efforts to the farm lobby.

this one amazes me. just like the biodiesel freaks. you need to grow
tons of crop to harvest a few pounds of oil. the /smart/ route would be
to use the whole biomass to produce a liquid hydrocarbon product, but
that apparently is too much of a conceptual leap. not that the
established fuel industry is in any hurry to point that out - they'd far
rather pay lip service to biodiesel because they know the concept to be
fundamentally flawed and therefore not long term viable.

>
>> i know a little bit about corporate finance. there's
>>more than one way to manage your reported figures, especially for
>>multinationals.
>
>
>
> And my sister is a corporate accountant. she's told me many of those ways.
> and there are a LOT. Many times the board gets the report they want to see,
> rather thanone that truly reflects the state of the corporatoin, something
> it's possible for nobody to actually know...

Re: Price Gougeing
 

"twfsa" <uksatw@qwest.net> wrote in message
news:y1uRe.3505$rj.1918@lakeread07...
> If a gas station owner has a 4000 gal under ground fuel tank, and fills it
> for lets say a $1 a gal, to make this simple his price to the public is
> $1.00 per gal.
>
> A few days later he figures that there is only 1000 gals left in the 4000
> gal tank so he orders 3000 gals @$2.00 a gal.
>
> Here's where there ing us, instead of selling that remaining 1000
> gals, left over from the initial 4000gal purchase @ a $1.00 a gal, they
> raise there price to $2 a gallon, for everything in the under ground tank.
> They just made 100% profit, on that 1000 gals. Then they lie to us saying
> they only make penny's on the gal profit,bullshit!

I was quite pleasantly surprised yesterday (after getting over the shock of
how much everyone was raising prices) by the behavior of my towns local
Mobil station.

Yesterday afternoon, the Gulf on the corner raised it's prices to $2.999. I
was in the Cumberland Farms a few doors down getting a few items when I
noticed the line, 20 cars long for the Mobil station. When I asked the
clerk of the store I was in what was going on, he told me the owner of the
Mobil station stated he was not going to change his price ($2.699) until his
tanks ran dry, then raise his price to match what his next refill cost him.
I thought that was admirable. Today he has cones up blocking his pumps as
he is empty.

So I continued on my way, and a half mile down the road I passed the local
Stewart's Shop. They are usually one of the cheapest places around. Their
price was already bumped up to $3.299.

On my way home later that night, the above mentioned Gulf station was up to
$3.19.

Today, while heading to Home Depot and my buddies bagel shop up in
Poughkeepsie, I saw EVERY Mobil station on Rt 9 with their price at $2.899.
On my way home as I passed the same Stewart's Shop their price was $3.499.
What the hell makes their gas worth $.60 more than Mobil???

So I called my buddy who owned the bagel shop and asked him what prices he
saw for gas on his way home (he lives in New Paltz). Of the 3 Mobil
stations, 2 were at $2.999 (including the one right off the exit for the NYS
Thruway which is usually a little higher than everybody else due to it's
location) but this 1 Mobil station (on Rt 9W just north of Highland) they
also had their price cranked up to $3.499.

Some serious disparity to prices within a small distance of each other.

Re: Price Gougeing
 

"Seth" <seth_lermanNOSPAM@hotmail.com> wrote in message
news:XKQRe.6090$cg.5343@news02.roc.ny...
> "twfsa" <uksatw@qwest.net> wrote in message
> news:y1uRe.3505$rj.1918@lakeread07...
>> If a gas station owner has a 4000 gal under ground fuel tank, and fills
>> it for lets say a $1 a gal, to make this simple his price to the public
>> is $1.00 per gal.
>>
>> A few days later he figures that there is only 1000 gals left in the 4000
>> gal tank so he orders 3000 gals @$2.00 a gal.
>>
>> Here's where there ing us, instead of selling that remaining 1000
>> gals, left over from the initial 4000gal purchase @ a $1.00 a gal, they
>> raise there price to $2 a gallon, for everything in the under ground
>> tank. They just made 100% profit, on that 1000 gals. Then they lie to us
>> saying they only make penny's on the gal profit,bullshit!
>
> I was quite pleasantly surprised yesterday (after getting over the shock
> of how much everyone was raising prices) by the behavior of my towns local
> Mobil station.
>
> Yesterday afternoon, the Gulf on the corner raised it's prices to $2.999.
> I was in the Cumberland Farms a few doors down getting a few items when I
> noticed the line, 20 cars long for the Mobil station. When I asked the
> clerk of the store I was in what was going on, he told me the owner of the
> Mobil station stated he was not going to change his price ($2.699) until
> his tanks ran dry, then raise his price to match what his next refill cost
> him. I thought that was admirable. Today he has cones up blocking his
> pumps as he is empty.
>
> So I continued on my way, and a half mile down the road I passed the local
> Stewart's Shop. They are usually one of the cheapest places around.
> Their price was already bumped up to $3.299.
>
> On my way home later that night, the above mentioned Gulf station was up
> to $3.19.
>
> Today, while heading to Home Depot and my buddies bagel shop up in
> Poughkeepsie, I saw EVERY Mobil station on Rt 9 with their price at
> $2.899. On my way home as I passed the same Stewart's Shop their price was
> $3.499. What the hell makes their gas worth $.60 more than Mobil???
>
> So I called my buddy who owned the bagel shop and asked him what prices he
> saw for gas on his way home (he lives in New Paltz). Of the 3 Mobil
> stations, 2 were at $2.999 (including the one right off the exit for the
> NYS Thruway which is usually a little higher than everybody else due to
> it's location) but this 1 Mobil station (on Rt 9W just north of Highland)
> they also had their price cranked up to $3.499.
>
> Some serious disparity to prices within a small distance of each other.
>
Since there is no advantage in being more expensive than a nearby competitor
for a commodity (and having to advertise the price so prominently to get any
customers at all), I'd expect it means the wholesaler's price already went
up and their truck has already delivered the expensive stuff. All the
overpriced stations can realistically do is to wait until the others sell
out or have to restock at the higher price.

Mike

Re: Price Gougeing
 

"twfsa" <uksatw@qwest.net> wrote in message
news:m_JRe.3551$rj.1289@lakeread07...
> Brian , you are right my point is this, the gas stations say they only
> make pennys of profit per gal, I think they are making 100% profit, on a
> certain amount of the gasoline in there tanks, if you read my first post.

I agree with you there Tom. We used to have regulation on gas prices here
years ago. When the world price changed it took ninety days for that
increase to be seen at the pumps (that was the time 'they' said it took for
the old stock to be depleted). Then when the new stock entered the system,
the price rose to reflect that fact. Now-a-days if someone sneezes or blinks
the price changes (rises) immediately. It's not right at all.

Then again, 'they' say that they have to charge the increased price to be
able to pay the increased price when their present stock is depleted, which
makes sense. BUT, the only price that changes immediately when the world
price of oil changes is when the price goes UP! When the world price drops
the price at the pump does NOT reflect that price change immediately, or
even in the weeks that follow the drop. In fact for an increase in the world
price of a dollar a barrel, the price at the pumps here rises six to eight
cents a litre. When the price drops a couple of dollars a barrel the price
at the pumps drop a penny a litre.

I wish I owned stock in an oil company or two!

Brian

Re: Price Gougeing
 

"N.E.Ohio Bob" <rgstroud@neo.rr.com> wrote in message
news:aEHRe.83227$gB.73208@tornado.ohiordc.rr.com.. .
>
> I was just talking to my friend who has an independent Honda-Acura repair
> shop. His price for the next 55 gallon drum of 5W30 is going to be more.
> He will be charging the higher price on the half barrel that is now in his
> shop. He will need the extra money to pay for the NEXT barrel.
> That's the way it has always worked. If you think you can do it better,
> open your own store and try it your way.
> There's an old joke that goes like this; Two brothers from Ohio drive to
> Kentucky and fill their truck with watermelons for a dollar apiece. They
> drive back to Ohio and sell them for a dollar each. When they sold the
> last one, they figure out what they just did. One brother says to the
> other "We need to get a bigger truck." bob

LOL! That's a fact! {;^0

Re: Price Gougeing
 

"Brian Smith" <Halifax@NovaScotia.Canada> wrote in
news:k%YRe.252902$on1.223955@clgrps13:

>
> "twfsa" <uksatw@qwest.net> wrote in message
> news:m_JRe.3551$rj.1289@lakeread07...
>> Brian , you are right my point is this, the gas stations say they
>> only make pennys of profit per gal, I think they are making 100%
>> profit, on a certain amount of the gasoline in there tanks, if you
>> read my first post.
>
> I agree with you there Tom. We used to have regulation on gas prices
> here years ago.


Trudeau copied Nixon's wage and price controls in 1975. It was such a
horrific mistake it was repealed later that year. Trudeau was such a dolt.
He obviously did not learn anything from Nixon's own mistake two years
before.

If Nova Scotia had its own price regulation, I'll bet your prices were far
higher than provinces that did not.

I notice even now, you're paying about 25¢ more per liter than we are in
Ontario. Your taxes must be higher (snicker).



> When the world price changed it took ninety days for
> that increase to be seen at the pumps (that was the time 'they' said
> it took for the old stock to be depleted). Then when the new stock
> entered the system, the price rose to reflect that fact. Now-a-days if
> someone sneezes or blinks the price changes (rises) immediately. It's
> not right at all.


Why not? Can you explain?

<snip>



>
> I wish I owned stock in an oil company or two!



You can easily do that through mutual funds. Oil companies are making
pretty good money now (~10% net), but that could change in an instant,
which is exactly what has happened in the past, and then they'll be down to
7% margins again.

An interesting chart:
http://www.tegger.com/hondafaq/misc/oilprice.jpg

Oil is still WAY cheaper than it was during Nixon's price controls. Reagan
deregulated oil prices in 1982. See that price drop immediately thereafter?


--
TeGGeR®

The Unofficial Honda/Acura FAQ
www.tegger.com/hondafaq/

Re: Price Gougeing
 

"Brian Smith" <Halifax@NovaScotia.Canada> wrote
> "twfsa" <uksatw@qwest.net> wrote
> > Brian , you are right my point is this, the gas stations say they only
> > make pennys of profit per gal, I think they are making 100% profit, on a
> > certain amount of the gasoline in there tanks, if you read my first
post.
>
> I agree with you there Tom. We used to have regulation on gas prices here
> years ago. When the world price changed it took ninety days for that
> increase to be seen at the pumps (that was the time 'they' said it took
for
> the old stock to be depleted). Then when the new stock entered the system,
> the price rose to reflect that fact. Now-a-days if someone sneezes or
blinks
> the price changes (rises) immediately. It's not right at all.
>
> Then again, 'they' say that they have to charge the increased price to be
> able to pay the increased price when their present stock is depleted,
which
> makes sense. BUT, the only price that changes immediately when the world
> price of oil changes is when the price goes UP! When the world price drops
> the price at the pump does NOT reflect that price change immediately, or
> even in the weeks that follow the drop. In fact for an increase in the
world
> price of a dollar a barrel, the price at the pumps here rises six to eight
> cents a litre. When the price drops a couple of dollars a barrel the price
> at the pumps drop a penny a litre.
>
> I wish I owned stock in an oil company or two!

Correct. If one cannot beat 'em, then join 'em. It's part of my financial
strategy lately, hypocritcal as some of its aspects are. I rationalize that,
as I drive my 40 mpg Honda Civic around town, while others drive incredibly
wasteful trucks and SUVs, I may as well profit from their stupidity.

I don't understand the outrage here, myself. Dealers charge way more than
independent shops. Medical fees vary just as much from one hospital or
doctor to another. Etc.

There are important laws on price gouging, but I don't think they kick in at
this point. These gasoline sales businesses are doing what the free market
allows.

Re: Price Gougeing
 

"TeGGeR®" <tegger@tegger.c0m> wrote in message
news:Xns96C5722B6F16Btegger@207.14.113.17...
>
> Trudeau copied Nixon's wage and price controls in 1975. It was such a
> horrific mistake it was repealed later that year. Trudeau was such a dolt.
> He obviously did not learn anything from Nixon's own mistake two years
> before.

Trudeau was one of the worst things to have ever happened to Canada. We
continue to suffer to this day and well into the future because of that man
(seems a bit too nice a word to describe him).

> If Nova Scotia had its own price regulation, I'll bet your prices were far
> higher than provinces that did not.

I honestly say that I did not pay any attention to the rest of the country's
prices at that time. Mainly because I was just too young to care and I
didn't travel outside of the Maritimes at the time.

> I notice even now, you're paying about 25¢ more per liter than we are in
> Ontario. Your taxes must be higher (snicker).

We're usually between 15¢ and 20¢ a litre higher than the price in Ontario.
I believe we need to build a pipeline from you to us, so that we can have
some of that cheaper Alberta oil <g>.

On a more disheartening note, the radio staions here just announced that
some gas stations are now selling regular self serve for 148.9¢ a litre.

> Why not? Can you explain?

It's just my feeling that we're being robbed and that it's legal to do it
this way (with the government helping out as much as they can with the crime
<g>).

> You can easily do that through mutual funds. Oil companies are making
> pretty good money now (~10% net), but that could change in an instant,
> which is exactly what has happened in the past, and then they'll be down
> to
> 7% margins again.

I know, but I have to purchase some fuel today to go to work.

> An interesting chart:
> http://www.tegger.com/hondafaq/misc/oilprice.jpg
>
> Oil is still WAY cheaper than it was during Nixon's price controls. Reagan
> deregulated oil prices in 1982. See that price drop immediately
> thereafter?

I have to say that, you and your very comprehensive site are thorough.

Brian

Re: Price Gougeing
 

In article <XKQRe.6090$cg.5343@news02.roc.ny>, "Seth" <seth_lermanNOSPAM@hotmail.com> writes:
>
> Some serious disparity to prices within a small distance of each other.

I see no great mystery here.

- Gas is sometimes sold as a loss leader, particularly by stations
attached to convenience stores, as the profit margins for convenience
stores are relatively generous.

- A gas station owner with some cash to burn might well embark on a
little price war, particularly when prices peak, to put some pressure
on competitors.

- During a surge in gas prices, it may be profitable in the long run
to sell gas at a loss in order to build customer loyalty.

These all boil down to the simple principle that it sometimes makes
economic sense to sell a product at a loss for a short period.
Happens all the time, and a "crisis" is an ideal time to do it, since
you get free advertising from media attention and word of mouth.

--
Michael Wojcik michael.wojcik@microfocus.com

Unlikely prediction o' the day:
Eventually, every programmer will have to write a Java or distributed
object program.
-- Orfali and Harkey, _Client / Server Programming with Java and CORBA_

Re: Price Gougeing
 

"Seth" <seth_lermanNOSPAM@hotmail.com> wrote in message
news:XKQRe.6090$cg.5343@news02.roc.ny...
> "twfsa" <uksatw@qwest.net> wrote in message
> news:y1uRe.3505$rj.1918@lakeread07...
>> If a gas station owner has a 4000 gal under ground fuel tank, and fills
>> it for lets say a $1 a gal, to make this simple his price to the public
>> is $1.00 per gal.
>>
>> A few days later he figures that there is only 1000 gals left in the 4000
>> gal tank so he orders 3000 gals @$2.00 a gal.
>>
>> Here's where there ing us, instead of selling that remaining 1000
>> gals, left over from the initial 4000gal purchase @ a $1.00 a gal, they
>> raise there price to $2 a gallon, for everything in the under ground
>> tank. They just made 100% profit, on that 1000 gals. Then they lie to us
>> saying they only make penny's on the gal profit,bullshit!
>
> I was quite pleasantly surprised yesterday (after getting over the shock
> of how much everyone was raising prices) by the behavior of my towns local
> Mobil station.
>
> Yesterday afternoon, the Gulf on the corner raised it's prices to $2.999.
> I was in the Cumberland Farms a few doors down getting a few items when I
> noticed the line, 20 cars long for the Mobil station. When I asked the
> clerk of the store I was in what was going on, he told me the owner of the
> Mobil station stated he was not going to change his price ($2.699) until
> his tanks ran dry, then raise his price to match what his next refill cost
> him. I thought that was admirable. Today he has cones up blocking his
> pumps as he is empty.
>
> So I continued on my way, and a half mile down the road I passed the local
> Stewart's Shop. They are usually one of the cheapest places around.
> Their price was already bumped up to $3.299.
>
> On my way home later that night, the above mentioned Gulf station was up
> to $3.19.
>
> Today, while heading to Home Depot and my buddies bagel shop up in
> Poughkeepsie, I saw EVERY Mobil station on Rt 9 with their price at
> $2.899. On my way home as I passed the same Stewart's Shop their price was
> $3.499. What the hell makes their gas worth $.60 more than Mobil???
>
> So I called my buddy who owned the bagel shop and asked him what prices he
> saw for gas on his way home (he lives in New Paltz). Of the 3 Mobil
> stations, 2 were at $2.999 (including the one right off the exit for the
> NYS Thruway which is usually a little higher than everybody else due to
> it's location) but this 1 Mobil station (on Rt 9W just north of Highland)
> they also had their price cranked up to $3.499.
>
> Some serious disparity to prices within a small distance of each other.

Well, the above mentioned Mobil station has gas once again and their price
is holding at $2.899. The Gulf next door has since raised prices again and
is now at $3.299 as is the Sunoco up the road. The Stewart's Shop is still
at $3.499.

Re: Price Gougeing
 

"Michael Wojcik" <mwojcik@newsguy.com> wrote in message
news:dfa4co014gq@news4.newsguy.com...
>
> In article <XKQRe.6090$cg.5343@news02.roc.ny>, "Seth"
> <seth_lermanNOSPAM@hotmail.com> writes:
>>
>> Some serious disparity to prices within a small distance of each other.
>
> I see no great mystery here.
>
> - Gas is sometimes sold as a loss leader, particularly by stations
> attached to convenience stores, as the profit margins for convenience
> stores are relatively generous.

Well, this station doesn't have a "Mobil on the Run", just a cash office
that sells smokes, soda and gum.

> - A gas station owner with some cash to burn might well embark on a
> little price war, particularly when prices peak, to put some pressure
> on competitors.

Yesh, I've seen that at a nickel. But it being all the Mobils in this area,
I wonder if Mobil home office is doing some subsidy.

> - During a surge in gas prices, it may be profitable in the long run
> to sell gas at a loss in order to build customer loyalty.

Well, with all the small margins people have been quoting that gas stations
have, that's just too big a loss for me to accept this as a reason.

> These all boil down to the simple principle that it sometimes makes
> economic sense to sell a product at a loss for a short period.

See above comment.

> Happens all the time, and a "crisis" is an ideal time to do it, since
> you get free advertising from media attention and word of mouth.

This also leads me to think Mobil Corp may be behind the price hold of the
Mobil stations. Just too many of them under different management to not be
organized on a larger scale.

Re: Price Gougeing
 

"Seth" <seth_lermanNOSPAM@hotmail.com> wrote in message
news:ov1Se.6890$OT1.293@fe09.lga...
>
>> Happens all the time, and a "crisis" is an ideal time to do it, since
>> you get free advertising from media attention and word of mouth.
>
> This also leads me to think Mobil Corp may be behind the price hold of the
> Mobil stations. Just too many of them under different management to not
> be organized on a larger scale.

Yup, appears to be coming from home office. Found a press release that
confirms it.

http://tinyurl.com/agmxa

What I found to be the most relevant part of the release (in regards to this
thread)...

"
ExxonMobil is making branded fuel available to its independent retailers and
distributors at wholesale prices below the spot market and NYMEX gasoline
prices. The vast majority of Exxon and Mobil service stations are operated
by individual dealers and distributors who purchase their fuel products from
ExxonMobil and set their own retail prices.

"

It appears that many (at least here in my area) are going along with
ExxonMobil's wishes.

Re: Price Gougeing
 

Waiving the right to remain silent, "TeGGeR®" <tegger@tegger.c0m>
said:

> Yeah, sort of like your own household finances. If you take home
> $60,000 per year, and you spent $54,600 during that year, your
> profit is $5,400. (That's about the same percentages as Exxon
> had last year, by the way.)

Not a perfect analogy, but close enough...

> With this profit, you can pay off some of the mortgage, buy a
> new TV, go on a vacation, get your kid braces, fix the roof,
> build a fence, all sorts of stuff. That's what profit is for.

Some of the things you mention here are acually expenses, to be taken
BEFORE your "profit" is calculated - such as building that fence.

--
Larry J. - Remove spamtrap in ALLCAPS to e-mail

The United States is the greatest country in the world..!
Eleven million illegal aliens can't be wrong.

Re: Price Gougeing
 

TeGGeR® wrote:
> jim beam <nospam@example.net> wrote in
> news:-fGdnUmByMOl8oveRVn-1Q@speakeasy.net:
>
>> twfsa wrote:
>>> If a gas station owner has a 4000 gal under ground fuel tank, and
>>> fills it for lets say a $1 a gal, to make this simple his price to
>>> the public is $1.00 per gal.
>>>
>>> A few days later he figures that there is only 1000 gals left in the
>>> 4000 gal tank so he orders 3000 gals @$2.00 a gal.
>>>
>>> Here's where there ing us, instead of selling that remaining
>>> 1000 gals, left over from the initial 4000gal purchase @ a $1.00 a
>>> gal, they raise there price to $2 a gallon, for everything in the
>>> under ground tank. They just made 100% profit, on that 1000 gals.
>>> Then they lie to us saying they only make penny's on the gal
>>> profit,bullshit!
>>>
>>> And thats what they are doing ........most are just raising the
>>> price because the guy next door did.
>>>
>>> Tom
>>
>> dude, the retailer /is/ making pennies. but the /refinery/ has
>> stepped up it's margin to 20%. at $70 per barrel, you do the math.
>>
>> oh, and don't forget that [unnecessary] oxygenates reduce mpg's so
>> you have to buy more of the stuff. and don't forget that we
>> subsidize [oxygenate] ethanol production to the tune of billions of
>> dollars each year. and don't forget that we're also being asked to
>> pay a premium for oxygenated fuel. can you say triple whammy? are
>> we getting gouged? sure! but it ain't the retailer.
>>
>
>
> It ain't the oil companies either. They don't set the prices, the
> markets do. Cartels have some influence on prices by way of
> production control, but the primary movers of oil pricing are
> political and emotional, and are out of oil company control.
>
> Oil companies benefit from a run-up in prices, but do not cause these
> run- ups. Exxon saw its net profit margin increase from 8% in 2003 to
> 9% in 2004 on account of more expensive oil. It's probably up to
> nearly 10% now.

I find it hard to believe that all of the different companies can come up
with the same LOH rate and have the same G&A and operating expenses per
gallon of refined product. One would assume those with the higher volume
would offset the LOH rates lower.

Yet, when one drives down the street, company a,b and c all have the same
relative retail price. Collusion?

Re: Price Gougeing
 

L Alpert wrote:
> TeGGeR® wrote:
>
>>jim beam <nospam@example.net> wrote in
>>news:-fGdnUmByMOl8oveRVn-1Q@speakeasy.net:
>>
>>
>>>twfsa wrote:
>>>
>>>>If a gas station owner has a 4000 gal under ground fuel tank, and
>>>>fills it for lets say a $1 a gal, to make this simple his price to
>>>>the public is $1.00 per gal.
>>>>
>>>>A few days later he figures that there is only 1000 gals left in the
>>>>4000 gal tank so he orders 3000 gals @$2.00 a gal.
>>>>
>>>>Here's where there ing us, instead of selling that remaining
>>>>1000 gals, left over from the initial 4000gal purchase @ a $1.00 a
>>>>gal, they raise there price to $2 a gallon, for everything in the
>>>>under ground tank. They just made 100% profit, on that 1000 gals.
>>>>Then they lie to us saying they only make penny's on the gal
>>>>profit,bullshit!
>>>>
>>>>And thats what they are doing ........most are just raising the
>>>>price because the guy next door did.
>>>>
>>>>Tom
>>>
>>>dude, the retailer /is/ making pennies. but the /refinery/ has
>>>stepped up it's margin to 20%. at $70 per barrel, you do the math.
>>>
>>>oh, and don't forget that [unnecessary] oxygenates reduce mpg's so
>>>you have to buy more of the stuff. and don't forget that we
>>>subsidize [oxygenate] ethanol production to the tune of billions of
>>>dollars each year. and don't forget that we're also being asked to
>>>pay a premium for oxygenated fuel. can you say triple whammy? are
>>>we getting gouged? sure! but it ain't the retailer.
>>>
>>
>>
>>It ain't the oil companies either. They don't set the prices, the
>>markets do. Cartels have some influence on prices by way of
>>production control, but the primary movers of oil pricing are
>>political and emotional, and are out of oil company control.
>>
>>Oil companies benefit from a run-up in prices, but do not cause these
>>run- ups. Exxon saw its net profit margin increase from 8% in 2003 to
>>9% in 2004 on account of more expensive oil. It's probably up to
>>nearly 10% now.
>
>
> I find it hard to believe that all of the different companies can come up
> with the same LOH rate and have the same G&A and operating expenses per
> gallon of refined product. One would assume those with the higher volume
> would offset the LOH rates lower.

funny, ain't it.

>
> Yet, when one drives down the street, company a,b and c all have the same
> relative retail price. Collusion?

omg!!! kill the heretic!!! no, collusion would be illegal...

Re: Price Gougeing
 

"L Alpert" <alpertl@xxgmail.com> wrote in
news:lZCdnTwXW6R0d4XeRVn-iA@comcast.com:


>
> Yet, when one drives down the street, company a,b and c all have the
> same relative retail price. Collusion?
>
>
>
>

No, just that operating margins are about as low as they can go.

There IS a floor, you know. People forget this. They tend to think that if
prices are not highly variable for a commodity, that the suppliers are
colluding.

--
TeGGeR®

The Unofficial Honda/Acura FAQ
www.tegger.com/hondafaq/

Re: Price Gougeing
 

"Larry J." <usenet2@DE.LETE.THISljvideo.com> wrote in
news:Xns96C591393AE3larrythefrog@68.6.19.6:

> Waiving the right to remain silent, "TeGGeR®" <tegger@tegger.c0m>
> said:
>
>> Yeah, sort of like your own household finances. If you take home
>> $60,000 per year, and you spent $54,600 during that year, your
>> profit is $5,400. (That's about the same percentages as Exxon
>> had last year, by the way.)
>
> Not a perfect analogy, but close enough...
>
>> With this profit, you can pay off some of the mortgage, buy a
>> new TV, go on a vacation, get your kid braces, fix the roof,
>> build a fence, all sorts of stuff. That's what profit is for.
>
> Some of the things you mention here are acually expenses, to be taken
> BEFORE your "profit" is calculated - such as building that fence.
>


Depends on your jurisdiction. Canada does not allow mortgages, roofs, or
fences as personal tax deductions. Even your kid's braces are not
deductible if you make over about $25,000 per year net.


--
TeGGeR®

The Unofficial Honda/Acura FAQ
www.tegger.com/hondafaq/

Re: Price Gougeing
 

jim beam wrote:
> L Alpert wrote:
>> TeGGeR® wrote:
>>
>>> jim beam <nospam@example.net> wrote in
>>> news:-fGdnUmByMOl8oveRVn-1Q@speakeasy.net:
>>>
>>>
>>>> twfsa wrote:
>>>>
>>>>> If a gas station owner has a 4000 gal under ground fuel tank, and
>>>>> fills it for lets say a $1 a gal, to make this simple his price to
>>>>> the public is $1.00 per gal.
>>>>>
>>>>> A few days later he figures that there is only 1000 gals left in
>>>>> the 4000 gal tank so he orders 3000 gals @$2.00 a gal.
>>>>>
>>>>> Here's where there ing us, instead of selling that remaining
>>>>> 1000 gals, left over from the initial 4000gal purchase @ a $1.00 a
>>>>> gal, they raise there price to $2 a gallon, for everything in the
>>>>> under ground tank. They just made 100% profit, on that 1000 gals.
>>>>> Then they lie to us saying they only make penny's on the gal
>>>>> profit,bullshit!
>>>>>
>>>>> And thats what they are doing ........most are just raising the
>>>>> price because the guy next door did.
>>>>>
>>>>> Tom
>>>>
>>>> dude, the retailer /is/ making pennies. but the /refinery/ has
>>>> stepped up it's margin to 20%. at $70 per barrel, you do the math.
>>>>
>>>> oh, and don't forget that [unnecessary] oxygenates reduce mpg's so
>>>> you have to buy more of the stuff. and don't forget that we
>>>> subsidize [oxygenate] ethanol production to the tune of billions of
>>>> dollars each year. and don't forget that we're also being asked to
>>>> pay a premium for oxygenated fuel. can you say triple whammy? are
>>>> we getting gouged? sure! but it ain't the retailer.
>>>>
>>>
>>>
>>> It ain't the oil companies either. They don't set the prices, the
>>> markets do. Cartels have some influence on prices by way of
>>> production control, but the primary movers of oil pricing are
>>> political and emotional, and are out of oil company control.
>>>
>>> Oil companies benefit from a run-up in prices, but do not cause
>>> these run- ups. Exxon saw its net profit margin increase from 8% in
>>> 2003 to 9% in 2004 on account of more expensive oil. It's probably
>>> up to nearly 10% now.
>>
>>
>> I find it hard to believe that all of the different companies can
>> come up with the same LOH rate and have the same G&A and operating
>> expenses per gallon of refined product. One would assume those with
>> the higher volume would offset the LOH rates lower.
>
> funny, ain't it.
>
>>
>> Yet, when one drives down the street, company a,b and c all have the
>> same relative retail price. Collusion?
>
> omg!!! kill the heretic!!! no, collusion would be illegal...

<enter the name of your deity here> forbid

Re: Price Gougeing
 

TeGGeR® wrote:
> "L Alpert" <alpertl@xxgmail.com> wrote in
> news:lZCdnTwXW6R0d4XeRVn-iA@comcast.com:
>
>
>>
>> Yet, when one drives down the street, company a,b and c all have the
>> same relative retail price. Collusion?
>>
>>
>>
>>
>
> No, just that operating margins are about as low as they can go.

Yes, but margins are built off of COGS. I work for a fortune 500 company,
and we have sites all over the world. Even amongst sites no one can agree
on the exact same accounting methods for figuring LOH and calculating
operating income (or loss).

I cannot believe all oil companies have the same operating expenses, as cost
per unit produced is based on too many factors, with one of the main drivers
being volume. If company A refines 100MM gallons a week, and Company B
refines 150MM gallons a week, the overall cost per unit should be driven
down. If it is, it sure isn't seen by the consumer.

>
> There IS a floor, you know. People forget this. They tend to think
> that if prices are not highly variable for a commodity, that the
> suppliers are colluding.

Price for the oil is only one factor. Operating expenses, LOH, city, state,
local taxes, health insurance is just a small example of all overhead that
the higher volume manufacturer can use to drive down these other costs in a
commodity business.

Higher volume means more personnel, which means better bargaining for health
insurance, lower prices for volume of ingredients for processing (except the
oil, of course), lower cycle time and more inventory turns. If this isn't
happening, then someone is not doing their job.

Re: Price Gougeing
 

"L Alpert" <alpertl@xxgmail.com> wrote in message
news:3P-dnZ2dnZ0e2oDUnZ2dnVCihN6dnZ2dRVn-yZ2dnZ0@comcast.com...
> Price for the oil is only one factor. Operating expenses, LOH, city,
> state, local taxes, health insurance is just a small example of all
> overhead that the higher volume manufacturer can use to drive down these
> other costs in a commodity business.

True.
But, the biggest determining factor is what the guy across the street is
selling the same commodity for.

Re: Price Gougeing
 

Steve Bigelow wrote:
> "L Alpert" <alpertl@xxgmail.com> wrote in message
> news:3P-dnZ2dnZ0e2oDUnZ2dnVCihN6dnZ2dRVn-yZ2dnZ0@comcast.com...
>> Price for the oil is only one factor. Operating expenses, LOH, city,
>> state, local taxes, health insurance is just a small example of all
>> overhead that the higher volume manufacturer can use to drive down
>> these other costs in a commodity business.
>
> True.
> But, the biggest determining factor is what the guy across the street
> is selling the same commodity for.

The discussion revolves around how stations supposedly make only pennies on
the gallon. If that is true, then all are paying the wholesalers about the
same. The distributed price from all suppliers should not be the same.
There is no true competition in the industry.

Re: Price Gougeing
 

Steve Bigelow wrote:
> "L Alpert" <alpertl@xxgmail.com> wrote in message
> news:3P-dnZ2dnZ0e2oDUnZ2dnVCihN6dnZ2dRVn-yZ2dnZ0@comcast.com...
>
>>Price for the oil is only one factor. Operating expenses, LOH, city,
>>state, local taxes, health insurance is just a small example of all
>>overhead that the higher volume manufacturer can use to drive down these
>>other costs in a commodity business.
>
>
> True.
> But, the biggest determining factor is what the guy across the street is
> selling the same commodity for.
>
>
selling price, yes, but not cost of operations, and therefore net
profit. net profit between two operations/should/ be different!!!

Re: Price Gougeing
 

"L Alpert" <alpertl@xxgmail.com> wrote in
news:8O6dnVqjiYsaUITeRVn-jg@comcast.com:

> Steve Bigelow wrote:
>> "L Alpert" <alpertl@xxgmail.com> wrote in message
>> news:3P-dnZ2dnZ0e2oDUnZ2dnVCihN6dnZ2dRVn-yZ2dnZ0@comcast.com...
>>> Price for the oil is only one factor. Operating expenses, LOH,
>>> city, state, local taxes, health insurance is just a small example
>>> of all overhead that the higher volume manufacturer can use to drive
>>> down these other costs in a commodity business.
>>
>> True.
>> But, the biggest determining factor is what the guy across the street
>> is selling the same commodity for.
>
> The discussion revolves around how stations supposedly make only
> pennies on the gallon.



They do. That's the reason they all operate convenience stores and car
washes. Margins are a lot higher.



> If that is true, then all are paying the
> wholesalers about the same. The distributed price from all suppliers
> should not be the same. There is no true competition in the industry.



You're making a fundamental mistake here in assuming that competition is
manifested as price differentials. It is not, if margins are already very
low, as they are.

In this case, the effects of competition have already been realized. If
there were no competition, the oil company would have margins more like
Microsoft. 27% vs 9%.



--
TeGGeR®

The Unofficial Honda/Acura FAQ
www.tegger.com/hondafaq/

Re: Price Gougeing
 

"L Alpert" <alpertl@xxgmail.com> wrote in news:AvKdnUTCW9PxoITeRVn-
tw@comcast.com:

> jim beam wrote:

>>>
>>> Yet, when one drives down the street, company a,b and c all have the
>>> same relative retail price. Collusion?


Not necessarily. It's just that in this case prices are as low as they can
go without exposing the industry to possible destruction.



>>
>> omg!!! kill the heretic!!! no, collusion would be illegal...
>
> <enter the name of your deity here> forbid
>
>
>


Various governments have already investigated the oil companies many times
over the years, and have failed to find ANY evidence of collusion at all.

Yeah, I know what the conspiracy theorists are going to say, "But the oil
industry has the government in its pocket!". The shenanigans of self-
appointed crusaders like Eliot Spitzer ought to put that silly notion to
bed.


--
TeGGeR®

The Unofficial Honda/Acura FAQ
www.tegger.com/hondafaq/

Re: Price Gougeing
 

"jim beam" <nospam@example.net> wrote in message
news:XeidnUxm--LmSITeRVn-1g@speakeasy.net...
> Steve Bigelow wrote:
>> "L Alpert" <alpertl@xxgmail.com> wrote in message
>> news:3P-dnZ2dnZ0e2oDUnZ2dnVCihN6dnZ2dRVn-yZ2dnZ0@comcast.com...
>>
>>>Price for the oil is only one factor. Operating expenses, LOH, city,
>>>state, local taxes, health insurance is just a small example of all
>>>overhead that the higher volume manufacturer can use to drive down these
>>>other costs in a commodity business.
>>
>>
>> True.
>> But, the biggest determining factor is what the guy across the street is
>> selling the same commodity for.
> selling price, yes, but not cost of operations, and therefore net profit.
> net profit between two operations/should/ be different!!!

Sure.
But we *are* discussing pump price, aren't we?

Re: Price Gougeing
 

TeGGeR® wrote:
> "L Alpert" <alpertl@xxgmail.com> wrote in
> news:8O6dnVqjiYsaUITeRVn-jg@comcast.com:
>
>> Steve Bigelow wrote:
>>> "L Alpert" <alpertl@xxgmail.com> wrote in message
>>> news:3P-dnZ2dnZ0e2oDUnZ2dnVCihN6dnZ2dRVn-yZ2dnZ0@comcast.com...
>>>> Price for the oil is only one factor. Operating expenses, LOH,
>>>> city, state, local taxes, health insurance is just a small example
>>>> of all overhead that the higher volume manufacturer can use to
>>>> drive down these other costs in a commodity business.
>>>
>>> True.
>>> But, the biggest determining factor is what the guy across the
>>> street is selling the same commodity for.
>>
>> The discussion revolves around how stations supposedly make only
>> pennies on the gallon.
>
>
>
> They do. That's the reason they all operate convenience stores and car
> washes. Margins are a lot higher.
>
>
>
>> If that is true, then all are paying the
>> wholesalers about the same. The distributed price from all suppliers
>> should not be the same. There is no true competition in the industry.
>
>
>
> You're making a fundamental mistake here in assuming that competition
> is manifested as price differentials. It is not, if margins are
> already very low, as they are.
>
> In this case, the effects of competition have already been realized.
> If there were no competition, the oil company would have margins more
> like Microsoft. 27% vs 9%.

True competition will foster competitive pricing, of which there is none.
Not every operation has the same expenses, and thus, the same cost per unit
produced, as previously explained.