On Sat, 24 Jan 2004 00:13:09 GMT, (Chuck)
wrote:

On Fri, 23 Jan 2004 12:27:43 -0800, "Harold & Susan Vordos"
wrote:

Amen! Another local fuel dealer, this one a gas station, (also owned
by a transplanted city dude, oddly enough..hmmm, notice a trend?) was
on the gas roller coaster recently, but keeping prices apace with the
larger community down the road. Then, in the last go-'round, when
prices dropped back down 20-cents or so, his stayed high.
Consequently, I stopped buying my gas there. Then, one day I stopped
and asked, with all due respect, why their price had previously
reflected that of the same brand station in the next town, but this
time had stayed high? His reply? "Go down there and buy your gas."
So, guess who _doesn't_ get my 3-5 fillups a week now?

No excuse for bad attitude, but gas prices are an odd case. Assume a
station buys 3,000 gallons at a time (pretty typical). They sell it at
a price that is usually 1-5 cents above their invoice (plus all the
taxes). If the price of gas goes up 3 cents and they were selling at 2
cents over cost they have to dig into profit from other sales to cover
the increase, but they can recoup that as they sell the new load. The
problem comes when the price starts to drop. If the station across the
street buys a new load that is 6 cents cheaper and cuts their retail
price while you still have 2,000 gallons in the tanks you are pretty
much up the proverbial creek sans paddle. If you price match the guy
across the street you lose money on every gallon you sell. If you
don't it takes forever to empty your tank and refill with cheaper gas.
Most stations split the difference.

Most of the c-store gas stations actually sell their gas at almost no
profit because they make the money on beer and cigs. The low gas price
is just to get you in the door. Stations that sell gas and do
mechanical work can also keep their prices lower. The ones that only
sell gas usually have the highest prices because they have to make
enough profit to run the business, and that will depend on volume and
the local competition.

Tim Douglass

http://www.DouglassClan.com