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To: rintense

“The .20+ increase in a day, however, is odd.”

Ah, that is a regulatory thing (depending on your state, but pretty much everywhere, too).

This, I know because I had the misfortune of running 7-Elevens.

Retail gasoline is priced at “cost + some amount” the “some amount” is typically just a few cents. The person who makes the call on the price (typically) is the local convenience store manger, who is, let’s fact it, and idiot.

So the the formula is simple. They get delivery of gasolines every X day, at X price. 1000 gallon tank. If 800 are used up, 800 are at Y price (whatever the last wholesale price was) and 200 are at the new X Price.

So the retail price (that day) is: (200(y) + 800(X))/1000 + margin.

Consumers are smart (as a group). As price is going up, the consumers notice this, run out and fill up their gas tanks, using up the cheap gasoline, so the 7-Eleven big tank gets refilled and the price is now some ratio of X and Z.

The reverse is true as gasoline prices are going down -— people wait until the last moment to get cheaper gas “tomorrow.”

The result is price goes up quickly (time wise) and going down slowly.

On an average per gallon rate, however, for the retailer, it’s all the same (more or less) margin.


23 posted on 05/07/2009 7:47:24 AM PDT by MeanWestTexan (Beware Obama's Reichstag Fire.)
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To: MeanWestTexan

Correction to post “used up” should be “left in tank”


26 posted on 05/07/2009 7:49:36 AM PDT by MeanWestTexan (Beware Obama's Reichstag Fire.)
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