Saturday, September 6, 2014
THE LOGIC OF GAS PRICES
Three days ago the price of gas at our local station was $3.54; yesterday it was $3.51 and today it is $3.57. Can anyone explain this?
In a normal business model you buy a product at wholesale price, you add a percentage mark-up as a profit margin and sell the product retail at a fixed price.
Now, a gas station buys bulk wholesale gas at the price of $X.00, the owner figures his profit margin and set a price… then the next day he raise it, and the next day the raise it again and that evening he lower it? This is the same gas that he paid a fixed amount of money to purchase; so, why isn’t the price fixed until his next purchase?
And, who decides on the price changes?
I feel like someone is sitting in an office in some corporate behemoth, and to break up the monotony, a couple of times a day, tosses a dart at a string of numbers; then pushes a button and thousands of gas station owners run out and change their prices.
Is this some kind of collusion between the oil giants and the financial section – something to do with gas futures? If so it is a fuck job on the general public and should be government regulated (but, of course, the lobbyist that actually run this country will insure that regulation of the oil and financial sectors never happen.)
My Toyota RAV-4 has a twelve gallon gas tank, I get twenty-five miles to the gallon and I travel less than seven thousand miles a year; so this isn’t an ISIL terrorism level concern for me.
But I can’t help but ask: What the fuck?