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Gas Question

 
Old 05-18-2004, 06:45 AM
  #1  
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Default Gas Question

I know there is a gas thread, but this is a about a different area of gas. Mods, if you feel this should be added to one of the other gas threads please delete.

How can gas stations (legally)raise the price of gas when a tanker hasn't even refilled their gas supply? What makes the gas they have had sitting there for a couple of days go up $.10 a gallon out of the blue? This has always been a question in the back of my mind, and with the recent spike, curiosity has the best of me.
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Old 05-18-2004, 07:30 AM
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Default Re: Gas Question (816d16)

any law against that would be affecting the capitalist nature of the United States.

Most often prices are raised/lowered in response to local competition... whatever the fresh tanker gas cost them they figure they will make up when it goes up even if they might lose some if it goes lower than cost.
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Old 05-18-2004, 07:36 AM
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Default Re: Gas Question (kablamo)

I have thought about this as well. I find it funny that when the price of crude goes up, so does our gas prices. I mean, the gas in the tanks at the local station won't see the new gas from that more expensive crude for at least 2 weeks. The stations paid X for the gas already in their tanks, yet they raise the price to reflect the more expensive OIL.

YAY CAPITALISM!

This is what I think the original poster was getting at.

-Travis
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Old 05-18-2004, 07:58 AM
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Default Re: Gas Question (DXManNoMore)

haha yeah well there is good and bad in every economic system... people tend to think capitalism is great when things are good, but then we get hosed every once in a while and our pockets are picked.

it's actually not so bad, because if the government artificially keeps prices low, eventually there is no incentive for business to produce more or consumers to use less, and shortages start to occur.
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Old 05-18-2004, 08:13 AM
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Default Re: Gas Question (816d16)

Gas is a commodity, and prices are set on forecasting. What price do we need to charge NOW, in order stay viable in the future? There are a ton of variables which factor into all of this. Until you grasp this, there is no point whining about how the little guy is getting screwed by the big Oil Co. While that may not be untrue, the simplicity of that statement is just laughable.

Before you can critisise the system, you must first understand it. I would start with OPEC. Understand what this organisation does, who they are comprised of ect..
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Old 05-18-2004, 08:24 AM
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Default Re: Gas Question (tegtyper)

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by tegtyper &raquo;</TD></TR><TR><TD CLASS="quote">Gas is a commodity, and prices are set on forecasting. What price do we need to charge NOW, in order stay viable in the future? There are a ton of variables which factor into all of this. Until you grasp this, there is no point whining about how the little guy is getting screwed by the big Oil Co. While that may not be untrue, the simplicity of that statement is just laughable.

Before you can critisise the system, you must first understand it. I would start with OPEC. Understand what this organisation does, who they are comprised of ect..
</TD></TR></TABLE>

I just don't understand why they raise the price on something they already have and have paid for. I would understand it if they raised it when the next tanker came in.

Since my questions are so laughable and you seem to know so much, break down to me oil guru. Please point out where I criticized the system as well.

Before you can critisise the poster, you have to read the ******* post.


Modified by 816d16 at 12:05 PM 5/18/2004
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Old 05-18-2004, 08:52 AM
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Default Re: Gas Question (816d16)

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by 816d16 &raquo;</TD></TR><TR><TD CLASS="quote">

I just don't understand why they raise the price on something they already have and have paid for. I would understand it if they raised it when the next tanker came in.

</TD></TR></TABLE>

something called "futures forecasting".

Say they paid 2.00$/gal for the gas they have now, and are selling it at 2.10$/gal.

Now supposed the truck pulls in with gas, and it's still 2.00$/gal cost, but they say : "next time it might be 2.20$/gallon, but i'm not sure...it might be just 2.10$/gal". Gas station says ok, i'll raise my price to 2.15$ gal until then.

basically they dont know for sure how much gas is going to cost in a week or two, and in a month or two, so they will make money NOW, because they have no way of guaranteeing they can make money later. If they buy gas in a month at 2.20$/gal but by then every other gas station is advertising 2.10$/gal, they are going to have to lose money or sell no gas and it will go bad eventually.

People look at gasoline prices day to day, but they shouldn't, oil prices NOW affect the cost of gas in a month or two - and even then it depends where the oil comes from. Gas typically goes up or down at various stations on the same days, but that's because of competition, because refineries can't just send out gas to ALL gas stations on the same day, because gasoline is produced gradually (ie they have trucks going out every day, not just one or two days a week).

As the retail level of gasoline, gas stations have to absorb price fluctuations more often than we think, and they have to keep in mind that business will be much quieter when prices just went up, and much busier when they are way low, even though they might be losing money.
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Old 05-18-2004, 08:55 AM
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Default Re: Gas Question (816d16)

Dude, if you bought a house for $50,000 a year ago, and it's value today is $200,000....would you sell it for $50,000 just because that's what you paid for it?


They raise the prices to whatever the people will pay. Supply and demand. If other gas stations around are charging $4.00/ gallon, why should somebody sell theirs for $1.00/ gallon? Everything else, OPEC, all that, does not affect the basic laws of economics. It is directly tied in to how high competitors can set their prices and therefore how high you can while maintaining profit, but it doesn't change this fundamental rule: you set your prices to the point where you get the highest profit.

I would raise my prices, too. And so would you.
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Old 05-18-2004, 09:11 AM
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Default Re: Gas Question (Lsos)

A house isn't a perishable good. Bad example dude.

You don't see the same thing happen with milk or the like. Kablamo kind of gave me the answer I was looking for. Thanks
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Old 05-18-2004, 09:22 AM
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Default Re: Gas Question (816d16)

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by 816d16 &raquo;</TD></TR><TR><TD CLASS="quote">Bad example dude. A house isn't a perishable good. Bad example dude.

You don't see the same thing happen with milk or the like. Kablamo kind of gave me the answer I was looking for. Thanks</TD></TR></TABLE>

Good or bad example, I think you missed the point. You sell it for whatever you will get for it....that is ultimately what it comes down to.

If you bought a tanker truck full of gas for $1000, and the next day the value of a tanker truck full of gas went up to $5000, how much would YOU sell it for? If you bought a tanker full of milk for $1000, and the next day the value of a tanker full of milk goes up to $5000, how much would you sell it for?
A car? Water? Crap? Anything.

Anyways, a house deteriorates, too, after a while. Milk goes bad in a couple days and the prices aren't as volitile.


Modified by Lsos at 1:40 PM 5/18/2004
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Old 05-18-2004, 09:24 AM
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Default Re: Gas Question (Lsos)

isnt 5/19/04 the day where everyone in america is not buying gas to prove some crap to opec?
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Old 05-18-2004, 09:27 AM
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Default Re: Gas Question (Lsos)

You're right.

I understand the process of it now. I was thinking of it on a gas station by gas station basis. Competition was nowhere in my head.

Thanks for the answers everyone.
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Old 05-18-2004, 09:28 AM
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Default Re: Gas Question (Gaara)

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by Gaara &raquo;</TD></TR><TR><TD CLASS="quote">isnt 5/19/04 the day where everyone in america is not buying gas to prove some crap to opec?</TD></TR></TABLE>

Yes

People need gas homie. All they have to do is raise it another nickel or so Thursday to make up for Wednesday. It won't work.....
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Old 05-18-2004, 09:53 AM
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Default Re: Gas Question (816d16)

paid 2.69/gal on monday for 91 octane...send the marines to CA to liberate the oil refineries from these ********.
 
Old 05-18-2004, 09:59 AM
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Default Re: Gas Question (PlastikOwl)

ON THE WAY
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