Local stations have different prices for the same brands less than a mile apart. There is a 20 difference on average 30 miles down the freeway from us... Do local dealers actually price the product or do oil companies price it for them..???
2006-09-09 01:35:40 · 11 answers · asked by saintsimon2u 1 in Cars & Transportation ➔ Other - Cars & Transportation
The price of gas is determined by the parent companies not the local dealers. the station owners themselves make little or no profit from the sale of gas only the sale of additional products in the store or the carwash. the major oil companies dictate the price of gas by region. but ultimately the price we pay at the pump is determined by worldwide market pressure. oil is traded as a commodity and therefore as the price on the markets fluctuates so does the price of gas. the price will very greatly from one day to the next because when oil is in the news it is a good time for the major oil companies to raise or lower prices as they can then justify the price change
2006-09-09 01:52:53 · answer #1 · answered by javaman1992 2 · 0⤊ 0⤋
americanfreeman has the right info: The final price at the pump is set my the station owner/proprietor. Those are the final pennies that he determines are needed for profit either as a larger amount on small quantity sales, or a smaller margin and hoping to make the larger profit in quantity sales. Factors that go into the price are: 1. The refinery/distributor is going to charge the operator a specified price. 2. Cost of oil on the world market (~40% of our oil comes from OPEC, some comes from domestic sources, much of it comes from Canada and Mexico. OPEC (Oil Producing and Exporting Countries/Cartel) does limit supply to increase demand which raises the price of crude on the open market. 3. Contributing factors to the price include the Federal and State taxes (that's something like $0.18 and $0.37 respectively around here (if I recall the placard correctly) 4. There are refining, storage, and transportation costs involved as well ... (Which I never understood, we are fairly close to some refineries and our prices are significantly higher than those farther inland.) ... along with what are the three other stations kitty-corner to this one and the one up the street charging, (mini-price war)
2016-03-27 03:52:43 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I've heard of managers of gas stations setting just about any price they want, although it wouldn't surprise me if some companies give managers more leeway than others. There was a story in the news about two local gas station managers getting into a price war and dropping their prices to something like 50 cents a gallon - a re-enactment of the old joke about losing money on each sale, but making it up on volume.
However, the manager has to buy the gasoline at a price set by the oil company, who in turn may not have much control over the price of the oil they purchase. They also have a tax to pay on their sales. The manager who had cut his price to 50 cents was losing a fortune - mostly as a publicity stunt, I believe.
2006-09-09 03:36:25 · answer #3 · answered by Mad Scientist Matt 5 · 0⤊ 0⤋
Depending on the stock market price per barrel, Is how a standard price is set. Now depending on location and how easy or hard it is to transport the fuel to the gas station helps the price. And last is how much the gas station wants to charge for profit. Government has absolutely nothing to do with the price of gas, other then the act of war, in turn affects the stock market. So in a nut shell when a oil
co. chairman gets a 600 million dollar retirement pension i assume the oil co. decides what we pay for it.
2006-09-09 01:58:56 · answer #4 · answered by highrange101 2 · 0⤊ 0⤋
Simple Answer: the market determines the price. But, in reality there are numerous factors that go into the individual decisions to buy or sell oil or refined gasoline. Government regulation, taxes, geopolitical fears, the weather, etc. all affect perceptions and behavior which affect price.
2006-09-09 01:42:26 · answer #5 · answered by Eric H 4 · 1⤊ 0⤋
Like any retail business, the owner marks up the cost of the product a certain percentage based on what he thinks will sell the most profitably without scaring people away due to high prices. It's called free market enterprise. If he's too high, smart people won't buy from him and he'll either have to lower his prices or go out of business. If he's too low, he won't make enough profit and will have to go out of business.
2006-09-09 01:44:10 · answer #6 · answered by Mr. Peachy® 7 · 1⤊ 0⤋
The owner of the stations. It's a racket. They make tons of money. (Not lately of course due to the price hike before) but I gas company that clears 500,000 a month. They are getting rich off us, becasue we need gas so we pay.
2006-09-09 01:39:51 · answer #7 · answered by Anonymous · 0⤊ 0⤋
The Oil cartels and the private oil firms. The government can't really do much at all, since the fuel taxes don't change too often without legislation.
There's a reason why OPEC is called a "cartel". Think "drug cartel" and ask yourself why do drugs cost so much.
2006-09-10 19:58:23 · answer #8 · answered by Anonymous · 0⤊ 0⤋
Each station receives a call from their parent corporation when it's time to change prices. They have to go according to what they are told to sell it for.
2006-09-09 01:58:27 · answer #9 · answered by ezachowski 6 · 0⤊ 0⤋
To a large extent...
Federal & State taxes...
2006-09-09 01:42:40 · answer #10 · answered by Anonymous · 0⤊ 1⤋