[ClearBlueSky]

I don’t pretend to know the intricacies of crude oil prices re. production or delivery costs to us.
I DO know what a friend who ran a small convenience store told me they paid for the gas they had delivered to their 2 pumps.
This was not a chain store, so it did not benefit from the lower costs for huge amounts purchased.
This store paid about 75cents a gallon for the gasoline.
It charged about $2.00 a gallon. This was pre Katrina.

Even if the price they pay is double now- $1.50 a gallon, it’s at the pump that the price is doubled!
So if the crude price is half what the supplier charges and they double the price to make a profit; then the service stations double or triple it again, who is gouging here?

[mvpel]

I know another fellow who ran a small convenience store who paid about a penny per gallon less than they could sell the gas for. Unless your friend can show invoices, I’m not inclined to believe that he was paying 75 cents a gallon for gasoline.

[MNJohnnie]

I don’t pretend to know the intricacies of crude oil prices re. production or delivery costs to us. I DO know what a friend who ran a small convenience store told me they paid for the gas they had delivered to their 2 pumps. This was not a chain store, so it did not benefit from the lower costs for huge amounts purchased. This store paid about 75cents a gallon for the gasoline. It charged about $2.00 a gallon. This was pre Katrina.

That is pure unadulterated nonsense. It complete Urban myth with NO base in factual reality. The profit on gas is not 250%. So either you are knowingly making this up or your "friend" simply lied to you.

[AFPhys]

Your “friend who ran a small convenience store” had it wrong, or perhaps you completely misunderstood. I don’t know why, but I suspect if your friend was in error, that “ran” is past tense for a good reason.

For the first six months of 2005, Pre-Katrina, commodities speculators were paying in the constantly rising range $1.20-$1.60/gal ... and that meant buying in 42,000gal lots and then having to transport it to the users’ destination and then having to add taxes on top of that.

It had been pretty steadily rising. For much of the world-wide (and certainly US) economic slowdown of 2002, the price was indeed about $0.80/gal... again EXCLUDING transportation and taxes.

It was down at $0.40/gal in 1993 after the Gulf War speculation had drained out, and has essentially been steadily rising since then.

Again, this is all EXCLUDING transportation costs and taxes.

[EBH]

What your saying doesn’t make sense. Transportation & distribution is 8%, 20% is taxes, another portion of the price is 15% to refiners, the rest is crude...

As of NOv. 2006 Federal tax was 18.4 cents per gallon
My state of Ohio added on another 28 cents per gallon

46 cents of every gallon goes to taxes!

http://www.fueleconomy.gov/feg/gasprices/FAQ.shtml