Posted on 04/03/2019 1:36:53 AM PDT by ExGeeEye
This has probably been asked and answered. I may have actually read, or more likely, scrolled past articles and threads containing the Answer.
Therefore, do pardon me, and if you cannot, please feel free to pile on all the ridicule you can muster-- IF you know the answer.
And also, IF you know the answer-- please share it.
Here goes:
--Gas prices always seem to rise in unison.
***Almost as if there has been a conference among the various gas companies for the purpose of fixing the prices.
QUESTIONS:
1. Isn't price-fixing illegal?
2. If price-fixing is not occurring, what accounts for the in-unison price rises?
3. Do they think we don't notice, or care?
4. Do they notice that at least a few of us so order our lives that we never need buy gas on the day of the simultaneous price hikes, or for several days thereafter? Are they accounting only for customers who, due to length of commute or the nature of their work, must empty their tanks over a couple of days and must buy gas when they can get it regardless of price?
The wholesale pice of gas is based on the deliverable at the port of New York. I think its the RBOE contract.
A gas buyer is always setting prices on what it takes to fill the next tankot what it cos toput into the tank.
Then, there are state and local taxes there standard.
Final, the margin price is the cost of overhead and a standard profit margin. That number will change by location.
So, there is no conspiracy as most Everton uses the same formula and its based on a market price.
Yep, gas station/mini-mart net profit margins are about the same as grocery stores, and grocery store margins are awful! (~2% net margin).
https://retailowner.com/Benchmarks/Food-and-Beverage-Stores/Gas-Station-Convenience-Stores
The real $$ is in railroads, banks, real estate and cable TV:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html
Apple, Inc. does pretty good at 26% too! ;-)
We dont seem to have anyone with a deep understanding of the industry posting, and that certainly includes me. Ill guess prices are up due to two things. First, supply disruptions due to refineries switching over from Winter to Summer formulations. Second, demand increases due to vacation driving. Its public school Spring Break week here.
I welcome a better explanation, but sure havent seen it in the thread.
Do you not sense a significant difference between approximate timing of price rises in bread and milk, and simultaneous rises at gas pumps?
Am I overly sensitive in this regard?
Consider:
If there WAS a weekly conference call to schedule the next price hike and settle upon the amount, how would the effect seem different to people driving past the stations looking at the signs?
Or checking gasbuddy...
The managers or assistant managers keep an eye on each others prices. If brand A goes down two cents, brand B will lower their price by the same. It’s all based on the current trading price of crude oil.
Now what gets me is that when gas went to 4 bucks a gallon under obama, oil products went sky high too but when gas prices came down, did oil product prices? Nope.
Never understood why motor oil is 4 times the price of gasoline either. From what little I understand about oil based products, the more refining, the higher the price BUT motor oil takes way less refining than gas. Oil has way lower liability than gas due to flammability too so oil should be like a buck a gallon. Guess we’re paying through the nose for that plastic bottle.
I can see that if they are in visual range.
The Shell on 44th St and the Mobil on 76th going up simultaneously stretches credulity.
Adding all the other Grand Rapids area gas stations other than Sam’Club and Costco breaks my credulity and tramples it into the ground.
I’m probably reading too much in your remark, but....
please do not equate gasoline prices with the price of milk. :)
https://www.usnews.com/news/best-states/vermont/articles/2019-04-02/dairy-summit-looks-for-solutions
My sole concern in this case is gasoline.
No one has as yet explained the phenomenon of simultaneous price rise.
Not even sure the attempt has been made.
True dat.
So while it appears that Sunoco, BP, Marathon, etc. gas stations are raising their prices in unison, it's because they're all paying the same price for what they're selling you.......
I’m quite convinced dairy prices are driven entirely by market forces, BECAUSE they differ across brands and locations within the community.
The same way the price of gas DOESN’T.
That’s the closest to a reasonable explanation that anyone has given thus far.
“Almost thou persuadest me...”
Milk prices are manipulated more than gasoline:
https://www.ams.usda.gov/rules-regulations/moa/dairy
Not my subject but thanks.
RE: post #31 by HT, here is the one Michigan refinery:
https://www.eia.gov/dnav/pet/pet_pnp_cap1_dcu_SMI_a.htm
IT IS THE RUSSIANS!
Same here in Reno. One pipeline in and a large terminal for storage and final mixing. We pay about 30 cents more a gallon the other places not that far away. A few years ago there was a guy that tried to establish a truck line to beat the pipeline company. His operation went bust in three months.
I KNEW IT!
Thanks for the confirmation.
Because their costs all go up together because ultimately they buy the gas from the same places.
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