The way it works in Florida, a station can’t raise its price until it has received a new allotment of fuel at a higher price. In disasters, a tiny tanker like you’d see on an airfield in the 1940’s runs from station to station pumping 100 gallons and leaving an invoice at the new price.
The business model for a gas station is not to sell gas. Gas is used as the traffic generator for the main sales, in order of importance, cigarettes, beer, food and lottery tickets. The sales on those items beats gas sales by 16:1.
The idea is not to run out of gas. If you leave your price low then you sell out of gas and lose all the associated sales to competitors. They honestly do not care what the price of gas is.
“Gas is used as the traffic generator for the main sales, in order of importance, cigarettes, beer, food and lottery tickets.”
I worked at my uncles gas station late 70’s. Man, he was before his time. His gas station inside looked like a modern day Pilot or Sheetz.Deli Foods, pizza etc
Yes, he told me the same. He made pennies off of gas per gallon but pulled in 125k per year salary back then off the other sales. That is really decent money today and incredible back then.
He offered me part ownership in the station. He had no children. My dad talked me out of it and wanted me to go to college and there was gas shortages at the time and my dad thought that form of business would be unreliable or not certain.
I really regret it now as the station is still a huge moneymaker in our area. My uncle ended up sellig out in the mod 80’s.
That kind of legislation just illustrates why people who have never run a business especially and particularly have no business in government either.
A business has to price their wares at replacement cost, not purchase price. Business 101
“Price gouging” sounds bad, but who gets to decide what, and when, under what conditions this ocurs? Idiot legislators, that’s who.
In a free market, the “solution to high prices is high prices.” A corrolary is when there is scarcity of an itsm, it becomes profitable to supply it. There is an incentive.
A good example are portable generators. After a hurricane or flood or other disaster locally, you can’t find one for love or money. A motivated person who lives in another state can purchase 25 of them, load up his truck, drive to the affected locale and sell them immediately. Everybody is happy. “Anti Gouging” laws make this kind of thing illegal. What happens now? Well people sit in the dark, or can’t pump floodwaters out, the food in their freezer spoils, etc. The people who passed the “Anti Gouging” law? They ain’t doin’ shit, because none of this affects them.
Yes, at a profit. Why would he do it otherwise? This is the Achilles Heel of non-business types. It’s easy to be generous with other people’s time, money, and resources, but good feelings don’t get it done. They might have their heart in the right place, but good intentions don’t get anything done either.
People who don’t understand business or the free market just create untold misery and hardship. Price controls don’t work.