A gas increase again?!

Re: A gas increase again?!

Postby GordonH » Feb 28th, 2018, 5:52 pm

Sparki55 wrote:Why does the cost at the pump go up before the station uses all the gas it bought at the previous price? All the stations do not run out of cheaper gas at the exact same moment; yet all raise their prices at the same time.

When the rack price goes down they also don't lower the price immediately, they need to "use up" all the expensive gas they bought which coincides with all the other stations at the same time.

It's a :cuss: joke to try to explain this.

Gordon H, .1483 is plenty of money for a station to make off of gas.

The average station around here probably gets 20 customers an hour from 7am to 8pm and maybe 2 customers an hour the rest of the time. Let's say about 250 customers a day to account for a slow day. Say each car buys 40L of gas. That's a profit on gas of $1542 a day!. That equals over $500,000 a year profit on gas, from that they can pay to have 2 full time staff on 24 hours a day ($262,000 for the year) and the rest of there expenses and still have over $100,000 left for themselves. All the other sales in the gas station are just pure profit in my eyes; overpriced goods.


Because its up to the station owner/manger to purchase the fuel. So if price goes up at the terminal in Kamloops & he/she sells at previous lower price. Then when they go to get more fuel they can't afford to replace it, at that rate the station would be forced to close due to no fuel in the tanks.
Out of that .1483 is also the cost of having fuel transported from Kamloops terminal via semi tanker to the owner/mangers station.
all the day to day running of the station comes out of that currently at .1483, not out of the oil company pockets (because the rack price is what they get + lease amount)

Added later: there is no way in hell I'd ever be station owner/manger
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Re: A gas increase again?!

Postby Sparki55 » Feb 28th, 2018, 6:01 pm

GordonH wrote:Because its up to the station owner/manger to purchase the fuel. So if price goes up at the terminal in Kamloops & he/she sells at previous lower price. Then when they go to get more fuel they can't afford to replace it, at that rate the station would be forced to close due to no fuel in the tanks. Are you trying to explain to me that a gas station does not have a running budget capable of purchasing about $30,000 of gas depending on the price? If so they are doomed regardless of charging more for gas bought at a lower rate
Out of that .1483 is also the cost of having fuel transported from Kamloops terminal via semi tanker to the owner/mangers station.
all the day to day running of the station comes out of that currently at .1483, not out of the oil company pockets (because the rack price is what they get + lease amount)

Added later: there is no way in hell I'd ever be station owner/manger
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Re: A gas increase again?!

Postby GordonH » Feb 28th, 2018, 6:05 pm

GordonH wrote:Because its up to the station owner/manger to purchase the fuel. So if price goes up at the terminal in Kamloops & he/she sells at previous lower price. Then when they go to get more fuel they can't afford to replace it, at that rate the station would be forced to close due to no fuel in the tanks.
Sparki55 wrote:Are you trying to explain to me that a gas station does not have a running budget capable of purchasing about $30,000 of gas depending on the price? If so they are doomed regardless of charging more for gas bought at a lower rate

Out of that .1483 is also the cost of having fuel transported from Kamloops terminal via semi tanker to the owner/mangers station.
all the day to day running of the station comes out of that currently at .1483, not out of the oil company pockets (because the rack price is what they get + lease amount)

Added later: there is no way in hell I'd ever be station owner/manger


You would have to talk to one of many station owner/mangers, to find out the those answers. I've given you what I know.
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Re: A gas increase again?!

Postby dodgerdodge » Mar 1st, 2018, 5:11 pm

Jonrox wrote:So you're confirming your strong demand for a product, yet want it sold for less... even though your buying behaviour suggests you're perfectly fine with the price. Makes sense.

You complain about the margins they make on gas, yet have no problem paying significantly higher margins on virtually everything else you buy. Also makes sense.


No my buying behaviour suggests i don't have a choice unless i change my life completely which is just way too difficult to do The price was just fine and now we have a 9 cents increase with some usual oddball excuse about some exchange in Chicago.
People just want the truth and would like a "fair" price. Now of course that fair price may be 126.9 but lets keep it around that lets not lull us all into some false sense of excitement by slowly reducing it until its 8 cents cheaper only to raise it 12 cents a week later.

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Re: A gas increase again?!

Postby Bsuds » Mar 1st, 2018, 5:20 pm

The gas stations have to keep a running line of credit with the gas co's. Usually $25k or higher depending on their volume of sales.
This is from someone who was in Banking and dealt directly with owners.
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Re: A gas increase again?!

Postby Jonrox » Mar 1st, 2018, 7:33 pm

dodgerdodge wrote:No my buying behaviour suggests i don't have a choice unless i change my life completely which is just way too difficult to do The price was just fine and now we have a 9 cents increase with some usual oddball excuse about some exchange in Chicago.
People just want the truth and would like a "fair" price. Now of course that fair price may be 126.9 but lets keep it around that lets not lull us all into some false sense of excitement by slowly reducing it until its 8 cents cheaper only to raise it 12 cents a week later.

Your buying behavior is that the price went up and you’re still buying at the same rate you did previously. The fact you deem changing your life to be too difficult just proves that you still see enough value in gas at the higher price to not change your behavior. Your behavior supports the higher price. If it didn’t, you’d scale back.

Whatever the reason is that you don’t change how much gas you buy, it’s still resulting in you buying gas. You’re still responsible for your buying, whether you feel you are or aren’t. It seems you don’t want to take responsibility for your situation, but it’s not the gas company’s fault you have the life you do that demands your level of required fuel. They’re only supplying you the product you need and in spite of the increases, you don’t change your behavior. That’s not their fault.

In fact, you’d probably pay a lot more. You want to complain (because that’s just what people do about gas), but they’re doing you a favor by not charging more. You’re getting enough value at the current price and wouldn’t change your buying habits if the price were even higher.

You really do believe you’re getting a good deal, whether you want to admit it or not. If you weren’t getting a good deal, you’d change your behavior... most likely by scaling back your buying.
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Re: A gas increase again?!

Postby dodgerdodge » Mar 1st, 2018, 11:51 pm

Jonrox wrote:Your buying behavior is that the price went up and you’re still buying at the same rate you did previously. The fact you deem changing your life to be too difficult just proves that you still see enough value in gas at the higher price to not change your behavior. Your behavior supports the higher price. If it didn’t, you’d scale back.

Whatever the reason is that you don’t change how much gas you buy, it’s still resulting in you buying gas. You’re still responsible for your buying, whether you feel you are or aren’t. It seems you don’t want to take responsibility for your situation, but it’s not the gas company’s fault you have the life you do that demands your level of required fuel. They’re only supplying you the product you need and in spite of the increases, you don’t change your behavior. That’s not their fault.

In fact, you’d probably pay a lot more. You want to complain (because that’s just what people do about gas), but they’re doing you a favor by not charging more. You’re getting enough value at the current price and wouldn’t change your buying habits if the price were even higher.

You really do believe you’re getting a good deal, whether you want to admit it or not. If you weren’t getting a good deal, you’d change your behavior... most likely by scaling back your buying.


I can shop around for bread and change my supplier or brand to save money, i can do the same for many other items, buying no name goods instead of brand name goods. Gasoline shopping is not possible, i will pay the same no matter where i look within City limits and maybe just maybe save a cent by driving to Vernon, clearly not a sensible option. I cannot save money on the price unless i buy less.
I could replace my vehicle with a small economical car but this is a big cost or an electric car which is an even bigger cost so any fuel savings may be lost in the extra money spent on replacement vehicle. I could of course drive less and therefore use less gas and in fact by planning ahead and grouping things together maybe i could cut back on my number of trips each week.
This doesn't work for everyone though and higher gas prices mean higher costs for businesses and in turn increased costs for the consumer as they pass on any cost increases.
Lets face it you say its not the gas companies fault we have the need for gas we do but we live in a City that has few options for those that want to give up their car and where everything is designed around the motor vehicle and so much urban sprawl over a large area. Give the people some sensible options as alternative to the motor car and we may see more people leaving the car/truck at home and taking other forms of transport.
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Re: A gas increase again?!

Postby slootman » Mar 2nd, 2018, 11:50 am

How many here take advantage of the days of the week some stations in town discount gas a couple cents? Who changes their buying schedule to those days so they never have to pay 'full price'? I'm guessing few, if any. Too much hassle.

The optimal price for any business to offer is where people complain a bit, but sill buy. Any lower and you're losing margin. Any higher you're losing volume.

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Re: A gas increase again?!

Postby CapitalB » Mar 2nd, 2018, 11:56 am

Apparently oil barrel prices have dropped 10% since trump announced his tariff plans. Wonder if we'll see that affecting our gas prices?
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Re: A gas increase again?!

Postby GordonH » Mar 2nd, 2018, 12:09 pm

CapitalB wrote:Apparently oil barrel prices have dropped 10% since trump announced his tariff plans. Wonder if we'll see that affecting our gas prices?


Since the 2 commodities have not been connected in about 30+/- years, I'd say doubtful.
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Re: A gas increase again?!

Postby CapitalB » Mar 2nd, 2018, 12:13 pm

Weird I'm always hearing them kind of linked together in various economic media. Probably just linked in theory
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Re: A gas increase again?!

Postby RVThereYet » Mar 2nd, 2018, 12:26 pm

slootman wrote:How many here take advantage of the days of the week some stations in town discount gas a couple cents? Who changes their buying schedule to those days so they never have to pay 'full price'? I'm guessing few, if any. Too much hassle.

The optimal price for any business to offer is where people complain a bit, but sill buy. Any lower and you're losing margin. Any higher you're losing volume.


$.02 cents/litre is hardly worth driving across the street for, never mind 1/2 way across town, but the other day the Shell (my usual stop) had already increased to $1.269 and the station across the intersection was still $1.169 ... I made the effort and it saved me almost $6.00... I'd say that was worth it, but I wouldn't do it for a difference of just a cent or two. It also depends if I'm in a hurry or have time to go across the street.

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Re: A gas increase again?!

Postby slootman » Mar 2nd, 2018, 12:31 pm

Thanks for proving my point. A 9c change is a disaster worth protesting in the streets, but 2 cents isn't worth crossing the street.

If one was really so impacted by price changes thy would cross the street to save a buck every single time.

People would complain he same when it goes from 1.20 to 1.30 as they would if it went from 0.75 to 0.80. Some people just like complaining I guess.
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Re: A gas increase again?!

Postby RVThereYet » Mar 2nd, 2018, 12:51 pm

slootman wrote:Thanks for proving my point. A 9c change is a disaster worth protesting in the streets, but 2 cents isn't worth crossing the street.

If one was really so impacted by price changes thy would cross the street to save a buck every single time.

People would complain he same when it goes from 1.20 to 1.30 as they would if it went from 0.75 to 0.80. Some people just like complaining I guess.


Well, it was $.10, but I still would have done it for $.09 ...

I wasn't trying to proof anything or anyone's point. Everything I said simply applies to me and my own personal situation (at the time), and I have, at times, gone "across the street" for $.02 cents, but wouldn't say that's a regular occurrence, and only if I had the time and the mood struck me.

But, if the two gas stations are on the some side of the street and I could see one was cheaper by $.01 as I was driving up, I'd probably go the one that was less $, even if it only would save me $.50... but that's just me and my way of doing things - to each his own.

Yeah, and people like to complain... about gas prices, the weather, politics & politicians, the price of their cell or cable bills, the list goes on ...
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Re: A gas increase again?!

Postby Jonrox » Mar 2nd, 2018, 2:32 pm

Costs have nothing to do with prices (and this applies to most goods).

For most consumers (especially the ones who think they're business and economics experts... but aren't) it's the easiest way for them to buy into price increases. They'll blindly accept that a cost increase results in a price increase, not taking into account how economics and market demand really work.

Generally speaking prices are set by the market, not by the company who is selling the good. Unsophisticated companies will price based on costs and in doing so will generally never price at an optimum level. Companies set prices at certain levels because they can... because the market allows them to. It's not greed, it's just market demand driving the price.

If a company sets their price above market, they'll see sales fall and profit will tumble. If they set a price below market, they're leaving money on the table. When you see gas prices increase, it's because the market is driving it. If the market really didn't see value at the increased price, they'd stop buying or would at least buy less. If that doesn't happen, then the price is at the correct level.

(There's plenty of nuance to this, but at it's basic level this is how things work.)

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