What Happened to the gas crisis

[BillyP]

<font color="blue"> What a gas station paid for their gas in the ground has no bearing on what they charge per gallon. Usually they charge what the expect to pay for the NEXT delivery. </font>

I have tried to explain this very thing more times than I can count. Very few seem to get it. I'm going to try here and see what happens.

To start out with, most gas stations (all in my area) are privately owned. They are under contract with another privately owned company called ABC Co, to sell fuel supplied by them. In return, the gas stations are supplied with fuel pumps, fuel storage tanks, maintenance..ect...ect. All the gas station is required to do is take in the cash for gas sales.

ABC Co is under contract with XYZ Co (Exxon, Shell or whoever), for their supplier.

ABC Co buys 100,000 gallons of fuel for $2.00, from XYZ Co. That's a cost of $200,000. Say for instance, fuel goes up 25 cents a gallon and ABC Co needs another 100,000 gallons. This 100,000 gallons will cost ABC Co $225,000. If they keep selling the first 100,000 gallons at the old price, they would lose $25,000.

You have to mark up the price on what it will cost you to replace it or you'll go broke.

Another thing and this is in my area so I don't know about yours. Don't blame the gas stations for the price of fuel. I know for a fact that here, the stations make a nickle a gallon. That nickle a gallon is whether fuel is $2 or $10 per gallon.

As far as XYZ Co, I'm pretty sure we, as consumers, are getting fleeced. What other reason could they go up just because a hurricane just might come their way. If that was the case and they did go up, why the hay don't they go down, when this hurricane didn't affect them????

 

[gsxr1100]

I don't think that will happen. Around here, all stations had fuel.

 

[slowrev]

Billy,
Pump controls are now computerized. They could be programmed to sell X gallons of gas at one price and then automatically increase the price to the new price.
This would solve the problem.
Ben

 

[Bob_Skurka]

</font><font color="blue" class="small">( Billy,
Pump controls are now computerized. They could be programmed to sell X gallons of gas at one price and then automatically increase the price to the new price.
This would solve the problem.
Ben
)</font>


Ben, about 50% of my customers are gas stations. I can tell you that you for absolute fact that most of my gas station customers cannot do what you say. Some certainly can. But the vast majority of them do that have pump controls as sophisticated as you describe. I can think of no independant operators that can do that. Perhaps some of the larger chains can, but I'd bet that only at their newer or larger locations.

 

[SkyPup]

The refineries and pipelines supplying your geographical sector with fuel from the Gulf don't work without electricity......good luck! /forums/images/graemlins/wink.gif

 

[slowrev]

Billy,
I understand that many stations do not have the capability to do this price tracking per gallons function in their systems. But they could without too much problems. And this would solve the problem of overcharging customers for the remaining cheap gas in their tanks.
It is a soloution.
Ben

 

[slowrev]

note:
Many natural gas pumping stations can run fully independent of outside supplied electricity. the compressors run on natural gas and they have natural gas run generators for the instrumentation. Gasoline and diesel pumping could be done the same way. Or some might be, I just have some knowledge of the natural gas system.
Ben

 

[gsxr1100]

I agree and everyone stated some huge (bogus) market up on the gas after Katrina (which never did happen).

Will it go back up maybe sure. $4.00, ya right and I am snowmizer too! /forums/images/graemlins/grin.gif

Does the gulf make (pump) some oil. sure but they are not our only place.

We import almost 50% and get oil from Louisiana, Alaska's North Slope, California, Oklahoma, Wyoming along with some 500,000 producing oil wells in the USA.

Again it will go up but not that high here.

Now after Katrina evertime a Hurricane goes through the stock market is playing it up for all it can.

 

[BillyP]

Ben, I think you were replying to Bob's post. I would like to address your solution though.

It doesn't matter how cheap the gas is that the gas station has in inventory. It's the cost to replace the inventory that drives the selling price.

Same thing when gas goes down. If you have higher price gas in inventory and gas goes down, you have to sell at the cheaper price. If you don't, your competitor will eat your lunch.

 

[SkyPup]

Sure hope they all run on natural gas, but even if they do, there will not be any product to put in them to run to begin with lovely Rita coming on shore as a Class V 155mph+ hurricane:

"The U.S. Minerals Management Service said Wednesday (7/21/2005) that 469 platforms in the Gulf are unstaffed, up sharply from 136 on Tuesday. More than 73 percent of oil production in the region is blocked, up from 58 percent Tuesday. More than 47 percent of gasoline production, up from 35 percent, is also blocked."

"Most of those refineries in Texas, they're at sea level. It's a table top, it floods every easily," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York.

Oil refining in Texas accounts for a quarter of the nation's total output of petroleum products, including gasoline and distillate fuels. According to the Energy Department, 20 of Texas' 26 refineries are located near the Gulf of Mexico, with a combined distillation capacity of 4 million barrels per day.

Rita is also thwarting recovery efforts as refineries gear up for the Northern Hemisphere winter, the peak season for production of distillate fuels, which include heating oil, jet fuel, kerosene and diesel. New England will be negatively impacted by these developments

Silliere added that disruption to diesel production will even hurt harvest season in the Midwestern United States.