Gas pumps stuck on 'old' price

Isn't it amazing? Where are the fed watchdogs?

I hear this question all the time and am always puzzled by it. Why do people think they are "owed" a certain gas price?

One explanation I heard was that when oil goes up, retailers immediately raise prices in order to make enough money to pay for the next, more expensive tanker delivery of gas. But when oil drops, it is only local competition among retailers that gradually drives prices down. This is a slower process. Why would a local gas retailer want to forgo profits prematurely by lowering prices immediately when oil drops?

It's George Bushes fault!!!

Guess you are going to the wrong gas stations. Where we buy our gas, the price has dropped 12 cents a gallon.

We agree to pay the price, we only have ourselves to blame.

By Associated Press 04/01/08

WASHINGTON (AP)- Top executives of the five biggest U.S. oil companies said Tuesday they know high fuel prices are hurting consumers, but deflected any blame… their profits $123 billion last year.

Exxon Posts Record Profits on Oil Prices
By JOHN PORRETTO | AP Business Writer
4:48 PM EST, February 1, 2008
HOUSTON - Exxon Mobil Corp. posted the largest annual profit by a U.S. company --$40.6 billion -- on Friday as the world's biggest publicly traded oil company benefited from historic crude prices at the end of the year.

Exxon also set a U.S. record for the biggest quarterly profit, posting net income of $11.7 billion for the final three months of 2007, beating its own mark of $10.71 billion in the fourth quarter of 2005.

The previous record for annual profit was $39.5 billion, which Exxon Mobil had in 2006.

I have also complained about the slow reduction in price. If you look back to $124 barrel oil when oil was rising price was at $3.67 a gallon. Doesn't that sound good! I just can't believe that anyone buy $4.09 gas right now (which I saw an hour ago) when $3.99 and lower is all over! I would drive a mile for 10 to 15 cent reduction!

equilibrium price = the price at which the quantity of a product offered is equal to the quantity of the product in demand.

If gas was an optional purchase, I might agree with you. Unfortunately, I still have to commute to work, buy groceries, etc., all of which requires a trip in the car.

Michele of Bethlehem wrote:

We agree to pay the price, we only have ourselves to blame.

Yeah, the supply and demand theory.
They have the supply. They demand our money.

Andrew wrote:

equilibrium price = the price at which the quantity of a product offered is equal to the quantity of the product in demand.

You have to understand the bookkeeping logic of these gas stations:
They use the FILO method:

First IN (cheapest), Last OUT.

Each new expensive purchase must be recovered first and not averaged with the gas already in the tanks. And any gas in those tanks automatically takes on the price of the latest most expensive purchase.

Some stations are so bold to use the FISH method:

FIRST IN...STILL HERE!

Therefore, the cheaper gas will NEVER be dispensed.

It all boils down to.....GREED!

Carpool? Scooter? Bicycle? Combine trips? Smaller cars? I'm not saying these are directly relevant for you but as a general concept, these are things people do routinely in other countries but we think are too inconvenient. I guess when gas prices also become as inconvenient, we'll be more willing to adjust our behavior.

Seems we're beginning to adjust behavior because gas demand is moderating and the American automakers are getting hammered due to their over-reliance on SUVs and trucks.

My My wrote:

If gas was an optional purchase, I might agree with you. Unfortunately, I still have to commute to work, buy groceries, etc., all of which requires a trip in the car.
<quoted text>

Do you have any clue about how much gas retailers make on gas? If you think making a few pennies on a gallon of gas is greed, I'd advise you never to run your own business.

Got To Be a Better Way wrote:

You have to understand the bookkeeping logic of these gas stations:
They use the FILO method:
First IN (cheapest), Last OUT.
Each new expensive purchase must be recovered first and not averaged with the gas already in the tanks. And any gas in those tanks automatically takes on the price of the latest most expensive purchase.
Some stations are so bold to use the FISH method:
FIRST IN...STILL HERE!
Therefore, the cheaper gas will NEVER be dispensed.
It all boils down to.....GREED!

Well, if it is THAT unprofitable...they WHY are you in the business? Mechanics make more that a gas jockey...would that not be a better trade?

please wrote:

Do you have any clue about how much gas retailers make on gas? If you think making a few pennies on a gallon of gas is greed, I'd advise you never to run your own business.
<quoted text>

Funny....

Not in the gas business, I just have a clue about business and don't spew uninformed drivel. It's much more productive when people aim their complaints where it's deserved.

Got To Be a Better Way wrote:

Well, if it is THAT unprofitable...they WHY are you in the business? Mechanics make more that a gas jockey...would that not be a better trade?
<quoted text>

WHAT about the monster palaces these oil Princes build, the garages of hundreds of expensive cars, and buying a $300 million airplane to junp around in? Is that not a bit much?

Google the Prince of Dabai...and see the rediculous articles on HIS GREED!

Got To Be a Better Way wrote:

Well, if it is THAT unprofitable...they WHY are you in the business? Mechanics make more that a gas jockey...would that not be a better trade?
<quoted text>

Gas Stations make alot of their profit from convience stores. The mark up is crazy on their stuff. TYhey only make a couple of cents on Gas but if you sell a couple thousand gallons a day then you make decent money but not that much. That is why most have C-stores.

CORRECTIONS: JUMP
Prince Of Dubai

Over the Mountain wrote:

Guess you are going to the wrong gas stations. Where we buy our gas, the price has dropped 12 cents a gallon.

WOW...a whole 12 cents! Amazing!

Gas prices are just another way to stict it to us, just like the new PA fee-if you recieve child support, you will now have to pay $25 a year, unless your on welfare, then they will pay it for you! I like a good screww like anyone else, but not these kinds!