What you are not thinking of is....how is the dealer going to be able to afford the next tanker load if prices to him have increased substantially?
I own a gas station and a little over a year ago I paid about $15,000.00 every night for a tanker load of gasoline. Now my load (9000 gallons) costs close to $27,000.00 every night. In a fast moving market how in the world is a dealer who only get one or two loads of gas a week going to be able to buy the next one....if he is not charging the going rate?
The dealer is making about eight to ten cents a gallon (gross). On Monday he gets a load but then he gets another load on Saturday which costs him 30 cents a gallon more. A load is 9000 gallons x .30 cents = $2700.00. If he sold every drop of that previous load before Saturday at the original price he made $900.00 profit....on "THAT" load. Now all of a sudden he has to pay an additional $2700.00 for the next load. Prescription for bankruptcy! If he does not increase his prices daily to account for the wholesale price increases along the the line....well, I'm sure you can now understand the problem.
A week ago my regular was selling at about $2.89 a gallon. Today it is $3.23 a gallon.Tomorrow it goes up another .02 cents. I pass on my increase penny for penny to the customer. I don't get a .05 cent increase and charge .07 to the customer. If I do not keep up with the daily pricing I'm in trouble. Usually this is not a major concern in a steady market.....but the dealer who only gets a load or two a week has to keep up on the daily pricing, otherwise he cannot afford his next load.
Don't know if this helps or not...but is the correct answer.