DeuceChunker03 Posted August 27, 2003 Share Posted August 27, 2003 My family is big in Oil & Gas, and I can tell you many reasons why the prices are high. First of all, yes, refineries have been down on the east and west coast, which means that a lot of the gas produced here is being shipped to the east and the west. Also, we just sent millions of gallons of fuel to Iraq, which would cause prices here to jump. Yes, we do basically control Iraq right now, but many of the refineries there cannot be operated because many people who worked in them have been taken prisoner, have fled, or have been killed. Last week alone, the price that stations pay for the gas from refineries went up every day. Prices are up, and stocks are down... kind of ironic huh? In regards to the way prices can go up without a new product being put in is competition. We have stations right across the street from Super 1 who now has a gas station in Marshall. When Super 1 goes up, we have to go up, and when they go down, we have to go down. That all has to do with competition, not the product that is being sold. If you are so worried about the prices of gas, buy a diesel. The diesel prices haven't changed in weeks. Link to comment Share on other sites More sharing options...
oldsot Posted August 27, 2003 Share Posted August 27, 2003 We know the C-store owners are gouging us and sticking those huge profit margins in their pockets. How dare you make a living off of something that is such a necessity! . . . Facetious Kitty :cat: Link to comment Share on other sites More sharing options...
DeuceChunker03 Posted August 27, 2003 Share Posted August 27, 2003 Alright, how about you open a non-profit convenience store, quit paying your electric bill, quit paying your water bill, etc. which are also necessities. You have to make a profit in every business, or it's not worth the trouble. When the price we get gas for goes up, we raise the price, but not the profit. Link to comment Share on other sites More sharing options...
Camusmind Posted August 27, 2003 Share Posted August 27, 2003 Blame it on the illegitimate three...Bushels the Cowboy Clown, The Cardiac Kid, and Rummy...they always have a hand when something this bad goes wrong. Link to comment Share on other sites More sharing options...
oldsot Posted August 27, 2003 Share Posted August 27, 2003 Most small business owners I know could qualify for NPO status.....lol Volume volume volume....... Link to comment Share on other sites More sharing options...
blindref Posted August 28, 2003 Author Share Posted August 28, 2003 Originally posted by DeuceChunker03Alright, how about you open a non-profit convenience store, quit paying your electric bill, quit paying your water bill, etc. which are also necessities. You have to make a profit in every business, or it's not worth the trouble. When the price we get gas for goes up, we raise the price, but not the profit. Â THIS was the ENTIRE POINT of My Post!!! You don't raise the price when you get a truckload of gas in! You raise the price when Joe's Gas Mart down the street raises his price! Lets say that a gas station starts out on Monday with an empty 1000 gallon tank...they get a tanker of unleaded at 1.00 a gallon cost. After taxes, overhead and profits, it sells for 1.25. They sell 700 gallons and get another truckload on Wednesday. The cost on that is 1.05/gallon. So now...the store has 700 gallons at 1.05, and 300 gallons at 1.00. By my calculations, the gas in the tank has an average cost of $1.03(5) and should be retailed at 1.28(5)/gallon to maintain the same profit/gallon. I'm presuming that labor costs are constant...regarless of the cost/gallon of the gas. Â Real world--the gas price goes up, before the truck gets there with the more expensive gas! WHY!!! Link to comment Share on other sites More sharing options...
oldsot Posted August 28, 2003 Share Posted August 28, 2003 It would seem to me that you should treat the 300 gallons of old cheaper gas as if you had paid the new increased price for it. By placing your usual markup on it you recover some replacement cost while maintaining your gross profit margin. . . . :cat: Link to comment Share on other sites More sharing options...
blindref Posted August 28, 2003 Author Share Posted August 28, 2003 Why not wait to increase the price until you've sold all 300 gallons? Â And remember that it works conversley coming down as well. Link to comment Share on other sites More sharing options...
Guest Posted August 28, 2003 Share Posted August 28, 2003 There are truths to both sides - I think. True, it does work both directions in anything. I have worked at a bookstore & when the publisher raised the price on the new shipment of books, we took the ones off the shelf & raised the price for those, also. Why? I'm not quite sure, but I thought it was worth mentioning. lol  To me, that's not so bad to raise the price when you get a new shipment of more expensive product. What I would like to know is this: An explosion or some other catastrophy hits the middle east & the next day (or same day in some cases) prices are shooting up. But when something happens to make the prices go down, it takes forever for us to see the effect at the pump. Exactly why does it work that way??  JC Link to comment Share on other sites More sharing options...
oldsot Posted August 28, 2003 Share Posted August 28, 2003 The retailer doesn't know that the price will come back down, so he/she is protecting profit margin. If you sell the remaining 300 gallons of cheaper bought fuel at the usual markup you have lost money on the replacement of the higher priced fuel. Same way with beer, when I get a price increase, I mark up the stock that was bought at the preincrease price to recover the replacement cost. Kinda like insurance, if all litigation ended tomorrow do you really think your premiums would decrease? . . :cat: Link to comment Share on other sites More sharing options...
bordertown Posted August 28, 2003 Share Posted August 28, 2003 Gasoline is a spot market commodity. Blindref if a C-store makes a .05 profit per gallon and the price goes down .05, will you buy from him or the station a .05 cheaper. Link to comment Share on other sites More sharing options...
oldsot Posted August 28, 2003 Share Posted August 28, 2003 I don't envy the C-store owner one bit, small margins and lots of hoops to jump through to keep the contract with the supplier. I've heard some horror stories from owners concerning their dealings with the likes of Fina, Shamrock, Citgo, Exxon etc. etc. Don't begrudge the poor retailer his nickel a gallon, he's just trying to feed his family.... . . :cat: Link to comment Share on other sites More sharing options...
blindref Posted August 28, 2003 Author Share Posted August 28, 2003 I feel like I'm chasing my tail. I don't care if the profit is .02 or .22 as long as there is a legitimate reason for them to raise their price.  Cost= the amount that the C-store owner paid Exxon for the product Price=Cost + Profit  I understand that it's a commodity and has a very volitile cost cycle...but I still haven't gotten an answer to my question...if the cost is the same on Tuesday as it is on Friday, why do the C-Stores change their price during that time? It just seems illogical. Peanuts are a comodity and a bag of Peanut M&M's can stay the same price for a year or more!:) Link to comment Share on other sites More sharing options...
oldsot Posted August 28, 2003 Share Posted August 28, 2003 Averaging the price between the two fuels is not sound business practice, it diminishes your gross profit margin on the higer priced fuel. Just as LC said about marking up the old books to cover the increased price of the new. Â Widget cost $5.00 GPM 25% = selling price of $6.67 Widget cost increased to $5.50 GPM 25% = selling price of $7.34 If you average the two costs ($5.00 + $5.50)/2 = $5.25 GPM 25% = selling price of $7.00 Replacement cost is $5.50 not $5.25 I have shrunk my GPM on the higher priced Widgets by 3.6% I'm losing profit which is need to cover the replacement cost of the new Widgets. . . :cat: Link to comment Share on other sites More sharing options...
blindref Posted August 29, 2003 Author Share Posted August 29, 2003 Originally posted by oldsot Widget cost $5.00 GPM 25% = selling price of $6.67 Widget cost increased to $5.50 GPM 25% = selling price of $7.34 If you average the two costs ($5.00 + $5.50)/2 = $5.25 GPM 25% = selling price of $7.00 Replacement cost is $5.50 not $5.25 I have shrunk my GPM on the higher priced Widgets by 3.6% I'm losing profit which is need to cover the replacement cost of the new Widgets. . . :cat:  If you average them, you are shrinking GPM 3.6% on the higher cost item...but you are making it up by charging 7.00 for the first items you bought at 5.00. Right!  Maybe I'm just too HardHeaded for this one!!!:D Link to comment Share on other sites More sharing options...
oldsot Posted August 29, 2003 Share Posted August 29, 2003 I did gained 3.5%= 28.5 GPM on the old widgets but I lost 3.6%= 21.4 GPM on the new higher priced widgets. A net loss of 1 tenth of one percent, small but a loss none the less. Another problem with averaging is that after the old widgets are gone I'll have to adjust my price upward again, and you know as well as I people don't like price increases, especially two in a short period of time. . . . :cat: Link to comment Share on other sites More sharing options...
blindref Posted August 29, 2003 Author Share Posted August 29, 2003 UNCLE!!! MERCY!!! CALF ROPE!!! Link to comment Share on other sites More sharing options...
oldsot Posted August 29, 2003 Share Posted August 29, 2003 Is it dead yet? Have I killed it? Did we beat the life out of it? . . . Lefts put it to rest...lol . . . :cat: Link to comment Share on other sites More sharing options...
Rabfan Posted August 29, 2003 Share Posted August 29, 2003 speaking of high gas prices, have any of you guys tried a K&N air filter in your vehical. i've put them in two or three of my company trucks and on my motorcycle and the differnce is immediate. Â my personal truck averaged 2100 rpms at 70mph prior to installing the air filter. immediatly after installation the rpms had dropped to 1800. i believe i've have gained 1-2 mpg from using it. Â they also have the advantage of being permanent and only have to be removed and cleaned about every 50k miles or so. they cost about $50 apiece and just fit right into the same slot as your factory filter. i also noticed that the engine had more power and better take offs. Â if your wanting an inexpensive way to improve your engines performance and economy this is a good thing to start with. Link to comment Share on other sites More sharing options...
blindref Posted August 29, 2003 Author Share Posted August 29, 2003 Lets see if I can get the math right on this one...LOL! Â 15 gallon tank--1.5 mpg extra=22 extra miles per tank. OK...I now get 22 MPG...so an extra 22 miles per tank equals a savings of 1 gallon of gas per tank. (How am I doing so far?) Â 1 gallon @ 1.50 per tank...I use one tank per week (approx 330 miles). Divide 50,000 miles by 330--that's 167 fillups. 167 X 1.50 provides me with a 250.00 savings. Subtract the $50 for the initial investment and I save $200 over the course of time. Not bad!!! Link to comment Share on other sites More sharing options...
oldsot Posted August 29, 2003 Share Posted August 29, 2003 Yeah those K&N filters are great, I have used them before on dirt bikes and such. Â Hey Blindpythagoras your numbers look good....:D . . . . :cat: Link to comment Share on other sites More sharing options...
blindref Posted August 30, 2003 Author Share Posted August 30, 2003 I think that's basic algebra...or is it a cipher? Link to comment Share on other sites More sharing options...
Rabfan Posted August 31, 2003 Share Posted August 31, 2003 don't forget that the average cost of an OEM air filter runs about $15. so figure changing that baby out every 6000 miles saying your doing normal driving. see how much more that saves you over a 50,000 mile period. figure i'll keep my work truck till it's got about 150,000 - 200,000. and thats a decent chunk of change. Link to comment Share on other sites More sharing options...
blindref Posted August 31, 2003 Author Share Posted August 31, 2003 Thank You Brookshires!!! Â Brookshires in Whithouse opened up their new gas and pledged to be 1 cent below all other stations in town for the grand opening. Kidd Jones vowed to match them! This may have been one of the greatest gas wars of all time!!! Link to comment Share on other sites More sharing options...
Guest imyahuckleberry Posted March 11, 2008 Share Posted March 11, 2008 Remember when some were griping about $1.60 a gallon gas???? Â I miss those days Link to comment Share on other sites More sharing options...
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