Gas prices: What I don't understand

[JoeThaNo1Stunna]

On Weds. morning almost all gas stations in Richmond went up at least 30-40 cents per gallon overnight.

How? Most still had the same gas in the tanks that they bought for a much cheaper price. I know that supply has been effected, but the supply they currently have as inventory did not cost what it would if it were bought today.

So say they bought gas for $2.00 a gallon and were selling it for $2.60 (much of what looks like profit goes to taxes), then they turn around the next day and sell the same gas they bought for $2.00 for $3.05. It is not like the gas they have in there now cost them anymore than the day before.

I can understand raising the price when new inventory is introduced, however my small brain seems to think this is price gouging.

I saw two gas stations side by side, one was selling for $2.65 the other for $3.05. It seems obvious to me that the station selling for $3.05 jacked up their price to make big profit in the days before they receive more expensive inventory.

In short, I'm driving less, and filling up wherever it is the cheapest. I refuse to pay higher prices because the station is a little more convienent or has nice employees, etc.

 

[janethill]

I don't like the high gas prices either, and I sometimes wonder is the media hype has caused some expectation pricing (i.e. now that the media has prepared the masses for these prices, lets charge them). However, it is also commonplace for businesses to price their product at replacement cost. I just wonder if this is based on replacement cost or a gouge influenced by the media.

 

[What the Heck]

Funny, when the price per barrel goes up, so do the pumps, but it doesn't come down as quickly.

 

[swilphil]

Good question. I really don't have an answer, but there's something else I've been noticing. The price of gas has been going up considerably in the last few months. Granted this week it's jumped from $2.68 to $3.06 because of the hurricane, but since last summer it has increased from $1.68. I've been hearing for weeks (long before the hurricane threat) that gas was going to top $3.00 soon. I understand about the off-shore refineries, but are the prices going to go back down when the are back up and running.

 

[Chicago526]

I can understand raising the price when new inventory is introduced, however my small brain seems to think this is price gouging.

You nailed it!

Wednesday going home from work, my usual gas station had it for $3.07. Figuring it would only go up, I toped off my tank (it was half full).

Driving home I passed two more stations for $2.99 (not my brand, that's why I didn't stop).

Comming to work this morning, both $2.99 stations were now $3.29. The station I filled up at was still $3.07. It will be interesting to see if it still is tonight...

 

[iNTeNSeBLue98]

Prices were up 30 cents overnight and another 30-40 cents between AM Rush and Lunch.

Of the stations I passed, the lowest this morning was $2.69. The high at lunch was $3.19, with $2.99 being pretty common in the area. This region has typically been beow the national average and prices were just coming down at the beginning of the week. I think I saw 2.39 on Tuesday or Wednesday.

I don't know how I'm going to make it through the weekend with the plans we have for each day, all involving more than our average everyday mileage. It will cost at least $30 to fill my gas tank.

I'm seriously considering walking to work while the weather is in a holding pattern of sunny skies and moderate temperatures. It's about 3 miles, just not sure how safe the entire route is for pedestrians.

 

[always quiet]

A station around the corner from me...a Getty station....went up from $2.74 to $3.25 over night. SOMETHING has to be done!!!!!!!!!!!!!!!!!!

 

[DisDuck]

Here is the simple explanation which answers the usual price increases not the price gouging ones.

A service station buys 20,000 gallons at $2 per gallon on 8/1 and buys another 20,000 gallons at $2.50 on 9/1. Where does that extra $.50 per come from? Sales of the 8/1 gas pays for purchase of 9/1 gas so station has to raise prices in order to pay for the next delivery.

This explanation also answers why decrease is slower than increase. Current gas paid for at $2.50; new gas to be paid for at $2 but has to recoup some of current cost and put away some for future cost which could also go up again.

Price gouging is what happened in Atlanta when sale price is way out of synch with purchase price.

 

[Jennifer S]

A station around the corner from me...a Getty station....went up from $2.74 to $3.25 over night. SOMETHING has to be done!!!!!!!!!!!!!!!!!!

Our Getty did the exact same thing- ours is $3.25 too!!

 

[SeeDisney]

Arrrgggh, I hear you on that one too. I was thinking about your stated theory as well.


What got me thinking is how is this going to affected the economy in overall. The pizza drivers, the realtors and many many other jobs that depend on their cars.

What about us. I'm already thinking about cut-backs in order to save. Like making my own bread, Never ever going out for one errand. Save it up for the end of the week and then do three or four errands at once.

Are people going to consider and NOT do movies, going out to dinner, shopping, bowling, beauty salon, etc., etc.

Can't imagine paying $60 to $70 for a tankful of gas!!!!!!!!!!!!!!!!!!

Can't help to see this crappy gas increases is going to be A HORRIBLE RIPPLE EFFECT ON OUR economy.


And whenever this is over with I WANT TO SEE THE gas prices come back way down to around less than $2.00 a gallon and not $3.00.

Anyone else????

 

[bjgrazi]

Last night driving home I got a flat. I got to a gas station that was closed for gas (not due to the events, but repairs & new awning) but open for repairs. I started talking with the guy who fixed my tire, he told me there was gas, but his distrubtor was told he couldn't ship till Tuesday.

It's starting to make me think that there's something fishy going on. He himself who sells gas said there needs to be an investigation that something is not right and they're using the hurricane as an excuse.

So I don't know.