Price Changes at the PUMP?

Question

I don't understand how the price at the pump can change, sometimes more than once, and the truck that delivers the fuel has never been there? It's the same fuel!
I know that there has to be an explanation for this.
Please explain!
Thanks!

Answer 1

Supply and demand across a complex distribution system where credit is extended.

First of all, the station can charge whatever they want, regardless of deliveries. Fctors include price acrss the street, anticipated future costs of supplies, rent, etc., profit, kid going to college soon and so on.

Then, realize that even if the truck comes, he doesn't get paid in cash, and the woner might be buying from differnt suppliers anyway.

Just be glad that you don't have to pay at the pump in an auction format :)

Answer 2

The policy at individual gas stations depends on whether or not it is privately own or not. Privately owned gas stations are free to charge whatever they want for the products they sell. Most gas stations that are company owned are restricted. In some cases a private owner works on a very tight margin. He has to compete with the company owned gas stations while paying a higher wholesale price for the product.

Since he has to pay for the gasoline at the wholesale price in effect at the time of purchase, he may well decide to start charging the higher price now, so he will have enough cash to purchase the more expensive gasoline.

Contrary to popular belief, the oil companies only make about 18 cents profit on a gallon of gasoline. The Federal and State taxes are much higher than that. The reason for the record profits is the record sales.

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Answer 3

Right now oil companies have it fixed that supplies are so tight even the slightest ripple in the supply line will cause price hikes. What usually happens is the gas station will get a call from their supplier telling them to raise the price.

I used to work in a gas station back during the second Arab oil embargo that occurred during the Iranian hostage crises.

We had gas in our storage tanks but our supplier tightly regulated how much gas we could sell on a daily basis. The result was gas went from 75 cents a gallon to 1.30 practically overnight.

Answer 4

Their is. Supply and demand. As supply at a pump gets lower, they increase price slightly to encourage motorists to use other stations so they don't run out. This helps them maximize profit too. Usually most gas stations make money off of people buying cigarettes and drinks, the gas just gives them a reason to stop. For this reason, they don't want to run out.

Answer 5

It has to do with the cost of replacing the gas that's in the tank.
If you are the station and paid $2.50 /gal for each galon in your 1000 gallon tank and you are notified that the next shipment to you is going to cost you $2.60/ gallon do you take the additinal $100 out of your pocket or charge the customer.

Answer 6

Its called fairmarket value which fluctuates....it's not cause one tank of gas is "better" and therefore of more value. These matters are dictated by the stock market fluctuations, supply and demand (ever notice how gas goes up on Fridays in the summer?)