lowing gas prices?

Question

okay you know how gas keeps going up well i was thinking why dont they lower it if i owned my own gastation i would lower my gas price bec i figure more ppl would come to mine because im very low, wouldnt they?

Answer 1

Gas prices can raise for a variety of reasons. As it is, for every 1.00$ of gas, Government taxes approx. a quarter of it; around 25 cents, which varies from state to state. So the provider (gas stations) are already taking a huge $.80~ tax hit (PER GALLON)-- but why do gas prices raise in the first place?

In a college level economics class you will learn the reasons for why prices change, and there are a lot of them. One such reason is consumer "expectations". If people hear a newscast saying that gas price is going to go up because of a war, more people will go out and buy gas after hearing the newscast to "beat" the price raising, this however results in the very rise of the price itself-- so it's kind of an interesting situation; what affected the initial price raise? The newscast and eager consumers, or the expected gas raise? The answer is they worked hand in hand, they -both- raised the gas price. I give you this example to explain that economics is a science, everything becomes a factor, and understanding this will help you understand why people do not lower their gas prices. But moving on to your question.

Ok, that's how prices can change, and multiple other reasons exist, and I recommend taking a course if you want to know every in and out of the procedure. However, the fact is, gas suppliers (exxon, mobil, circle k) are a) heavily taxed by the government b) have to purchase this gas from the oil companies; minimilizing their profits further c) consumers may or may not think the drive to your station is worth it and most important, the people in america are constantly in need of gasoline fuels.

Economically, it would be smarter to charge around the same as other folks, because you are heavily taxed, you're not making as much profit as you hope for, and lastly, you will get customer's regardless-- depending on your location and other factors. So, yes, people might come farther to your station, but you'd be better off if you didn't lower your prices -too- much. You're already losing enough money from government, initial purchases, and other costs (building costs, employee costs, and other expenditures/taxes)

So, that's why it's not a good call to do this. You'll likely just bankrupt yourself in the process. A lot of people think gas stations are the ones getting rich, but have you ever walked into a truly ritzy gas station bathroom? I know I haven't. In a lot of cases, they are just scraping by, especially if they're independently owned.

Answer 2

You would go broke, the gas station make about 7 cents a gallon. Unless its a Indian Tribe owned station, they make about 65 cents a gallon. They keep the gas tax money keeping the gas 7 cents a gallon lower than the non tribal owned stations in the area.

Answer 3

If you owned an independent gas station and lowered prices too much, the larger companies around you would take a loss, lower their prices below yours and wait until you ran out of money. You could not win a fight with somebody who has bottomless pockets.

Answer 4

Ya maybe if you had the cheapest prices in town.. But remember they say its not a big profit owning a gas station.. You still have to mark up the prices to pay all the costs, as in the gas it self! and all the other costs..

Answer 5

Yes, if you could afford to open a gas station and charge less for your gas, people would be attracted. But, most gas stations don't mark up gas very much, the profits to be made by a gas station selling fuel are minimal.

Answer 6

Yes they would, until you went out of business. Gas is sold at .02 to .05 profit, that pays the operational costs. The gas station makes it's money from the convenience store inside.

Answer 7

well you wouuld be losing money becuase you are buying gas at a high price too
and by making your gas low your losing profit
and i think its the law or somthing to have it at the certain price

Answer 8

that's pretty much a no-brainer. Your gas station would be buying the product from the very organization that you would be undercutting. Do the math.......

Answer 9

The gas prices are sking high right now.