If we hear on Monday that barrels of oil are more expensive, by Tuesday morning I'm paying more at the pump.
On the other hand, if the price of cotton goes up I don't suddenly pay more for boxers at Target.
How can this be justified? The gas that was already sitting in the big tank at the Chevron didn't cost anybody any more-- it's the crude stuff that's being imported in the barrels, which should take some time to make it to the Chevron.
2006-10-21 15:47:25 · 8 answers · asked by RR 3 in Politics & Government ➔ Other - Politics & Government
Because they are greedy bastards who only want our money...
There was ONE station in my area who didn't do a knee jerk price increase. We ran him out of fuel, but I got high test cheaper than what the other gougers who were charging for regular!
I go back to him before I will go elsewhere, because the refill probably did cost him more.
2006-10-21 15:56:40 · answer #1 · answered by fairly smart 7 · 0⤊ 3⤋
The gas station has to charge you enough to cover the REPLACEMENT COST of the fuel in it's underground tank. It's standard business practice. The reason gasoline prices react so quickly is that the oil companies tie their wholesale prices to the spot market. (which is like ebay for crude oil) As soon as OPEC announces a production cut the spot price goes up in anticipation of lower supplies, that triggers a rise in the wholesale price of gasoline (The oil companies also have to deal with replacement cost) and then the retailer reacts to the wholesale increase.
When prices drop, the same thing will happen in reverse. The gas at the station will sometimes be sold for LESS than what it was bought for originally.
2006-10-21 22:55:37 · answer #2 · answered by Jay S 5 · 2⤊ 0⤋
The same reason it goes down slowely if OPEC lowers the price. It is called "corporate greed" Any slight excuse to aqueeze out another bit of your money that can be extorted. "extorted" is a deliberate choise of words. There are so few major suppliers that they don't have to cospire to "fix' prices. One simply moves and the others follow because they are a manoply and they know there is no other competition.
2006-10-21 23:43:01 · answer #3 · answered by paul m 1 · 0⤊ 1⤋
It's really not that difficult. In order for the gas station to refill their tanks, they have to purchase gasoline at the current market price, or anticipated price. For example, say you needed 10,000 gallons of gasoline to sell each week. If you bought your current stock at $2 per gallon, you spent $20,000. So you sell it for $2.20 because you have to pay salaries, electricity etc. Now, today, the price of oil goes up and for you to purchase next weeks supply will cost you $2.25 per gallon. You could continue to sell your gasoline for $2.20, but now you will run short on purchasing the 10,000 gallons and payrolls etc. Does that make any sense?
2006-10-21 23:00:24 · answer #4 · answered by Anonymous · 1⤊ 0⤋
gas prices are determined by "futures", the price of crude in 6 months, I looked in my crystal ball and cant see the future but they can. But really that is the reason.
2006-10-21 22:50:33 · answer #5 · answered by Anonymous · 1⤊ 0⤋
Because things like cotton cannot be used for political justification. Oil keeps the world go 'round (not literally, of course). Cotton doesn't.
2006-10-21 22:58:35 · answer #6 · answered by Anonymous · 0⤊ 1⤋
what gets me going is when oil prices are way down again ,yet the price at the pump takes a few weeks to go back down.....not instantly like when it goes up......gee- willikers....:(
2006-10-21 22:57:29 · answer #7 · answered by djjoecruz 5 · 0⤊ 0⤋
Because the big oil executives have got to make their bonuses.
They do not care about the American people. Its all about the money and how much they can gouge from us.
2006-10-21 22:50:40 · answer #8 · answered by d b 3 · 1⤊ 3⤋