Bill wrote:
You think you have problems with high gasoline prices....

Lately I've seen some stations which usually have the lowest price for gas,
charging higher prices than other stations. Then I realized why they might
be doing this....

I think gas station underground storage tanks hold around 30,000 gallons?

If they are paying $2.50 a gallon, that would be $75,000.00 to fill their
tanks!

I saw a TV news story on this. I forget which network. They said
that these smaller independent gas stations -- the ones that usually
have bargain prices -- operate by looking for deals and buying excess
gas from the major gas companies. But the "majors" (as this particular
analyst called them), when there are shortages, will favor their own
chain of retail stations over independents who want to buy from them.
They put the independent stations on an allocation based on previous
usage, so that the maximum they can buy is 110% or 120% of what they
bought in some previous time period (same day previous year, same day
previous month, or rolling average over some period like the last
month or quarter).

The bottom line is that these independent bargain stations normally
have low prices because they are picking up surplus here and there
at cut rates. But now there IS no surplus, or not much of it. They
have less flexibility to shop around for low rates, and they also
have less available to them overall, so they are going to buy less
gas at a higher rate and charge a lot more.

The net result is that the independent "bargain" stations are now
charging more than the name-brand major chains. Which probably
sucks for them, but on the other hand, when there are shortages,
people become a lot less price sensitive, so the bargain stations
won't have too much trouble unloading that gas even though they're
charging more than people expect.

- Logan