[qam1]

When oil prices plunge it takes weeks for the price to go down, when oil prices rise gas prices go up within the hour

[Bob434]

lol yup- i just said that same thing- i didn’t read through the thread first-

[SkyDancer]

What I said.

[Alberta's Child]

That actually makes sense.

If you have a 1,000-gallon tank of gasoline at your shop and you paid $1.50 per gallon for it, you've got $1,500 worth of inventory in the ground. If you sell 1,000 gallons per day and you need to earn a profit of $500 per day to pay the bills, then you're selling that gasoline for $2.00 per gallon just to break even.

1. If your supplier tells you that the wholesale price of gasoline has dropped to $1.00 for your next delivery, you still have to make the $500 on the gasoline you have in the tank ... so your price doesn't change at all until your next delivery.

2. If your supplier tells you that the wholesale price of gasoline has INCREASED to $2.00 for your next delivery, you must immediately raise your price to cover the higher cost -- because you need will $2,000 just to refill your tank, and if you keep selling your 1,000 gallons for $2.00/gallon then you won't have enough revenue to cover any other costs of doing business.

[sgt_lau]

When oil prices plunge it takes weeks for the price to go down, when oil prices rise gas prices go up within the hour.

I know, right? Funny how that works, isn’t it?