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[Professor H]

Agreed there's an app for that on my phone as well,  tells me the cheapest gas prices whatever location I'm at - nice when you travel...

It's Poynt - does much more...  business directory, restaurants, movies/trailers, all based on location.

[Baby Hitler]

Meh. Populist rage about gas prices will get you everywhere, it seems.

Right and little gas stations that sell hardly anything but gas, cigarettes, and pop, like the Admiral on Seventh street, are doing it only to employ those few people who work there and don't worry about profit one bit.

How much gas do you think you'd have to sell, making only $0.03 per gallon, in order to make a hefty profit, after taxes, insurance, and payroll?

[jbs49238]

Right and little gas stations that sell hardly anything but gas, cigarettes, and pop, like the Admiral on Seventh street, are doing it only to employ those few people who work there and don't worry about profit one bit.

How much gas do you think you'd have to sell, making only $0.03 per gallon, in order to make a hefty profit, after taxes, insurance, and payroll?

Well I cannot comment on the profit margin on cigs, but I can also tell you from personal experience that the markup on bottles of pop is horrible.

[lordfly]

Right and little gas stations that sell hardly anything but gas, cigarettes, and pop, like the Admiral on Seventh street, are doing it only to employ those few people who work there and don't worry about profit one bit.

How much gas do you think you'd have to sell, making only $0.03 per gallon, in order to make a hefty profit, after taxes, insurance, and payroll?

A lot. Which is why almost every gas station sells things that are not gas.

Aside from the economic impossibility of having a large margin on gasoline (it's a commodity that is literally sold at every corner, thus everyone is selling the same thing, thus driving down prices to be competitive), think about it: a 15 gallon fillup takes five minutes. Assuming 30 cents profit per gallon, you're making $4.50 every time someone fills up their tank. If you have 6 stations, you can potentially be making 27 dollars profit every five minutes, not including the frozen burritos and gatorade they bought while waiting to fill up. That's not a bad haul over the entire day.

If gas stations were making that much money day in and out, you think they would look like they do, and employ minimum wage workers that barely care to get out of bed in the morning, much less keep the place tip top?

From a USA Today article from 2008, back when we were soiling ourselves over gas prices the last time:

Stations pay tens of thousands of dollars for each gas shipment before they see a cent in the register. Eventually, many make only a few cents on a gallon of gasoline, a margin that can disappear altogether when credit card fees are added in.

Thank goodness for beef jerky and sodas.

Most gasoline retailers long ago got past any illusion they can make money by selling gas. They rely on gas sales to drive traffic to their shops, where they hope auto repairs or food and drink sales will help them turn a profit.

"You're always out there competing with the guy next door — literally with the guy across the street — and worried too about how you're going to pay for your next supply," said Rayola Dougher, a senior economic adviser at the American Petroleum Institute, the oil industry's trade association

source: http://www.usatoday.com/money/industries/energy/2008-05-24-gas-breakdown_N.htm



Your "friend" who claims he pulls down 30 cents a gallon profit is either a terrible accountant, or pulling your leg.

[Baby Hitler]

A lot. Which is why almost every gas station sells things that are not gas.

And there are quite a few, like the Admiral (many Admiral's to be exact) and others, that don't.

Your "friend" who claims he pulls down 30 cents a gallon profit is either a terrible accountant, or pulling your leg.

You know the first time that article came out, I bought into it too. But if you think about it, where did USA today get their information from? Gas station owners? Do you honestly believe that they would be up front an honest and say "Yep, we screw over everyone that buys guys, what choice do they have? Sure they can go down the street and save $0.02 a gallon but we still make a hefty haul"

You might as well ask the Koch brothers if they are honest business men. 

I don't know if it's $0.30 a gallon, but I certainly don't believe they only make pennies on the gallon.

I don't believe everything on the internet.

[sammy]

And there are quite a few, like the Admiral (many Admiral's to be exact) and others, that don't.You know the first time that article came out, I bought into it too. But if you think about it, where did USA today get their information from? Gas station owners? Do you honestly believe that they would be up front an honest and say "Yep, we screw over everyone that buys guys, what choice do they have? Sure they can go down the street and save $0.02 a gallon but we still make a hefty haul"

You might as well ask the Koch brothers if they are honest business men. 

I don't know if it's $0.30 a gallon, but I certainly don't believe they only make pennies on the gallon.

I don't believe everything on the internet.

Many years ago, when I went to the same station all the time, and learned to know the owner, he told me that gas sales paid only for his rent. Profit came from fixing cars. This was back when there were "service stations". I doubt that much has changed in the interim, except that wrenching has been replaced by beer, pop, and chips!

[lordfly]

"Yep, we screw over everyone that buys guys, what choice do they have? Sure they can go down the street and save $0.02 a gallon but we still make a hefty haul"

The economics of selling gas make that pretty much impossible. It's a commodity, ie one tank of gasoline is pretty much the same as any other tank of gasoline. Therefore, if you have four gas stations on the same corner (definitely not an impossibility), they are selling the exact same thing to you and have three competitors doing the exact same thing (to say nothing of the several dozen other gas stations nearby).  If you are selling the exact same thing (or close enough not to matter) as your competitor, what else do you have to compete on? Service? No... all gas stations are self-service now. That leaves price. If you want your customers, you're going to strive to be the cheapest gas on the corner.

Not only that, gasoline is an extremely price-sensitive commodity; people will literally drive miles to save a few cents per gallon. If you "gouge" your customers with a 30-cent margin, your competitors will beat you by 25 cents. Period.

There isn't a collusion to raise gas prices. If there were, gas station owners would be driving BMWs and lighting cigars from twenty dollar bills.

[jbs49238]

You can believe what you want, I will take the word of a gas station owner (who drives a few pretty damn nice cars but I digress) over a USA Today article.

It is unimportant what the gas stations mark up is anyway... it is the oil companies that drive the price LF.  Do you think every gas station owner on the corner the other day raised their prices just becuase one guy did?  No... but you think they all lower to the same price for just that reason. The prices are the same (or very similar) at the stations because they all pay the same price coming out of the refinery per truckload that price is set by the refiners (the oil companies) and as Monday's events bear out... it has nothing to do with the market price... and everything to do with how much money they wanted to make that day.

[lordfly]

Commodities are a *****, I guess. Better dust off the bicycle.

[Baby Hitler]

The economics of selling gas make that pretty much impossible. It's a commodity, ie one tank of gasoline is pretty much the same as any other tank of gasoline. Therefore, if you have four gas stations on the same corner (definitely not an impossibility), they are selling the exact same thing to you and have three competitors doing the exact same thing (to say nothing of the several dozen other gas stations nearby).  If you are selling the exact same thing (or close enough not to matter) as your competitor, what else do you have to compete on? Service? No... all gas stations are self-service now. That leaves price. If you want your customers, you're going to strive to be the cheapest gas on the corner.

Not only that, gasoline is an extremely price-sensitive commodity; people will literally drive miles to save a few cents per gallon. If you "gouge" your customers with a 30-cent margin, your competitors will beat you by 25 cents. Period.

There isn't a collusion to raise gas prices. If there were, gas station owners would be driving BMWs and lighting cigars from twenty dollar bills.

So, if a gas station owner purchases 50,000 gallons of gas on Monday at $3.50 a gallon, planning on selling it at $3.55 a gallon, and then the very next day something happens to cause everyone else to raise prices to $3.99 a gallon, don't you think he isn't going to raise his prices too?

I imagine, (I could be wrong, if anyone has evidence to the contrary please correct me), that gas station owners get a delivery of X amount of gallons per week, and that they are supposed to sell X amount of gallons before their next delivery date. If they sell too much, they will run out, and have to get another delivery made at an increased cost. So they pretty much keep their prices in line with their competitors. When it comes close to the next delivery date, if they have extra gas on hand, they cut their prices a little so that they will be able to accept their full delivery, because the delivery price is based on them purchasing X amount. If they don't have a lot, they may raise prices just a little over their competitors so that they can make it last until their next delivery, while still getting some customers.

Most of the Admiral gas stations I see, have pop, cigarettes, oil, candy bars, and gas, and not much else. I can't believe that the station owners of these places are barely skimping by, as they could have invested their money into a much more lucrative business.

Basically, I don't believe that the owners are that stupid.

But I could be wrong.

[BigRedDog]

I haven't noticed the prices in Monroe starting to drop again since this most recent "eruption"

[Baby Hitler]

I haven't noticed the prices in Monroe starting to drop again since this most recent "eruption"

Back "down" to $3.68 here in Jackson.

[lordfly]

So, if a gas station owner purchases 50,000 gallons of gas on Monday at $3.50 a gallon, planning on selling it at $3.55 a gallon, and then the very next day something happens to cause everyone else to raise prices to $3.99 a gallon, don't you think he isn't going to raise his prices too?

What would cause that? If every other gas station owner is buying gas 50k gallons at a time, they're going to be locked into a price for a while.

Yes, it may spike if someone has to buy their order when the prices are spiked, but they're not going to get a ton of business until the other guys have to put in their order (they'll raise prices but it'll be a few cents cheaper than the first guy). Prices would then naturally come down as the spike goes away and the normal commodity pricing kicks back in.

[Baby Hitler]

What would cause that?

You are joking right? It just happened a week ago.

It happens every couple of weeks.



Iran is doing blah blah blah, gas prices rise.

The stock exchange did blah blah blah, gas prices rise.

A mouse farted in the Kremlin, gas prices rise.

Oil prices go down, gas prices get this, they RISE!

The amount of gasoline they purchase at a time is purely subjective. I stated that I don't know how much they purchase at one time, however they do probably purchase it at "bulk" prices and are required to purchase X amount to receive that pricing, and adjust their pricing accordingly as I stated.

[Tiny]

IF gas stations sell 10,000 gallons a day, (which I doubt) at $ .03 mark up per gallon, they would make a whopping $300 a day. Hardly enough to stay in business. The delivery trucks would spend more time there than the people buying gas.