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Gouging
Old 09-19-2019, 11:30 AM   #1
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Gouging

I think it was Saturday night when the news broke outbought the Saudi oilfield drone hit. The next morning our local gas station had raised prices $.20. Is that ridiculous? They didn't even know the impact on the market. I suspect they wait for any excuse to extort us. Your opinions?
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Old 09-19-2019, 11:40 AM   #2
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If prices are too high I take my business elsewhere.
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Old 09-19-2019, 11:44 AM   #3
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It shot up about .25 here too. In general it was $2.89 but guess who played it straight. Costco. $2.49. I filled up both cars.
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Old 09-19-2019, 11:46 AM   #4
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Gasoline (all fuels) pricing is incredibly complex. Gouging is possible if your local gas station does not have nearby competition, but in any city of significant size all gas stations are monitoring everyone's price including as listed on internet sites. Consumers will drive a mile or more to save a nickel a gallon. Maybe his supplier raised posted prices? Regardless, in any kind of a competitive market gouging is very difficult to pull off. Also, customers who feel they are being gouged may defect to a cheaper nearby station and never return.

Years ago I was making a sales call on a guy at Southland/7-Eleven and we got to talking about the electronic price signs. They had just made the decision to go electronic on all locations, at about $60K a pop. He told me that they expected a one-year payback because of their reduced reaction time to market price changes. The local gas market is minute-to-minute competitive.
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Old 09-19-2019, 11:58 AM   #5
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Gouging? Perhaps. However, the station has to refill their tank at the prevailing market price (after the attack).
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Old 09-19-2019, 11:59 AM   #6
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Oil prices have a lot of variability because of all the moving parts (suppliers, refiners, transporters, etc., etc.). I know nothing about the business, but I would think that if I were part of it I would want to price gasoline at what I expect to pay for refilling my station's tanks, not what I paid for what motorists are filling up with today.

Edit: Oops, I see Red Badger beat me to this comment.
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Old 09-19-2019, 12:46 PM   #7
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I'm don't care about the price of gas.
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Old 09-19-2019, 12:52 PM   #8
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Death, taxes and overall rise in gas prices. Three certainties .
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Old 09-19-2019, 01:21 PM   #9
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Gouging? Perhaps. However, the station has to refill their tank at the prevailing market price (after the attack).
Yes. This. This is a situ that might be unique to oil, or maybe not, but most people tend not to see it at first. When the price of oil goes up the gas station guy isn't worried about paying off the gas in the ground. He's worrying about buying enough to refill his tanks the next time around.

He could opt to not raise prices based on current profit margins for what he's selling but he won't be able to but enough "new stuff." Now there's less to be had. Raise prices or ration.

(P.S.: Not intending to put in a good word for international oil concernes or local price gouging business operators)
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Old 09-19-2019, 01:48 PM   #10
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Like razztazz, not trying to defend local operators, but I've been told chains like Holiday make ZERO on gasoline sales. That's why they market food, beverages and other convenience items: those items are their only (or at least their primary) profit source.

(Filled up at Costco this past Tuesday and attendant was telling another customer that possible price hikes were all customers wanted to talk to him about this week.)
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Old 09-19-2019, 02:05 PM   #11
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It's not "gouging" (typically meant as a derogatory term), it's basic supply/demand.

You may not like the free market system, but I'm not aware of a better one.

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Old 09-19-2019, 02:35 PM   #12
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its gouging !!!!!!!!!!!!! They had their tanks filled from previous shipment that was at X.XX / gallon plain and simple.... i can understand that maybe their next shipment might go up so then they raise price, but the next morning, to be HONEST i'll bet they raised them that night 1-2 a.m. that's B.S.
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Old 09-19-2019, 02:35 PM   #13
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Originally Posted by Idnar7 View Post
I think it was Saturday night when the news broke outbought the Saudi oilfield drone hit. The next morning our local gas station had raised prices $.20. Is that ridiculous? They didn't even know the impact on the market. I suspect they wait for any excuse to extort us. Your opinions?

This has been standard operating procedures for years. I have seen worse. I was in North Carolina on a work project in August 2005 when Katrina had passed through Florida and was approaching the Gulf. The night before a colleague and I where to drive home, it was still unclear of its path and eventual size, but we decided to fill up on gas. The next morning it was a category 5 and definitely heading into the gulf. By the morning gas prices in the area had jumped a lot - I recall a lot more the .20 per gallon, at least 50 cents or more per gallon jump, due to the potential impact of the hurricane on the oil and gas production in and around the gulf. There were long lines at the gas stations as well.
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Old 09-19-2019, 02:47 PM   #14
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I have no problem with the capitalist system. If you don’t like it, go to a different gas station. They are free to charge whatever they want. Jmho
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Old 09-19-2019, 02:54 PM   #15
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I have no problem with the capitalist system. If you don’t like it, go to a different gas station. They are free to charge whatever they want. Jmho
No. There is not an infinite or near infinite number of options therefore no market operations as put forth. You can go to 100 stations and the price will always be about the same. I don't rejoice over nickles and dimes difference as if that were a good thing

The actual market operations tend to homogenize the prices. And that's when it's actually working. It's the same as collusion.

No, they can't just change what they want. I keep hearing about invisible hands and "market rates" See? Even their hands are being forced.
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Old 09-19-2019, 02:57 PM   #16
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Originally Posted by f35phixer View Post
its gouging !!!!!!!!!!!!! They had their tanks filled from previous shipment that was at X.XX / gallon plain and simple.... i can understand that maybe their next shipment might go up so then they raise price, but the next morning, to be HONEST i'll bet they raised them that night 1-2 a.m. that's B.S.
If the next shipment costs considerably less, should they immediately sell the product, that they recently paid more for, at (perhaps) a lower price than they paid?
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Old 09-19-2019, 03:55 PM   #17
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I find it interesting that so many people get riled up over a few dollars worth of gas. Yet those same people are paying $15-$20 a gallon for their morning coffee at the same stations.

And I'd venture to guess that most people could easily cut their gas usage by 10-20% by making some simple changes in their driving habits.

But it is always easier to complain about those big bad oil companies.
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Old 09-19-2019, 04:18 PM   #18
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When I saw the thread title my first thought was healthcare. The price of gas is peanuts to me.
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Old 09-19-2019, 04:38 PM   #19
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Quote:
Originally Posted by Idnar7 View Post
I think it was Saturday night when the news broke outbought the Saudi oilfield drone hit. The next morning our local gas station had raised prices $.20. Is that ridiculous? They didn't even know the impact on the market. I suspect they wait for any excuse to extort us. Your opinions?
Quote:
Originally Posted by f35phixer View Post
its gouging !!!!!!!!!!!!! They had their tanks filled from previous shipment that was at X.XX / gallon plain and simple.... i can understand that maybe their next shipment might go up so then they raise price, but the next morning, to be HONEST i'll bet they raised them that night 1-2 a.m. that's B.S.
And when prices fall, do you post to applaud the oil companies for giving us a break? Didn’t think so.

Like others have said, it’s supply and demand, and there are many factors in spot market oil pricing. Remember when prices were $4.25/gal? Still think you’re justified in complaining? Gas is a relatively cheap commodity thank goodness...

When the company you work/worked for increased prices, was that “gouging” too?

And your investments, do you make sure those companies put customers ahead of profits?
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Old 09-19-2019, 04:54 PM   #20
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... I know nothing about the business, but I would think that if I were part of it I would want to price gasoline at what I expect to pay for refilling my station's tanks, not what I paid for what motorists are filling up with today. ...
"Want" is not a viable pricing strategy. The market, which cares nothing about what your product cost is, will tell you what your price needs to be.

BTW, most branded stations are independently owned, not owned by an oil company. Some are large independent chains like most of the C-store chains, but many are small, even one-station, operators. Owning a small C-store/gas station is a good path for new immigrants. Occasionally you will discover that the family lives in the back, behind the coolers.

For small operators the cost of fuel in the tanks is a big issue. Not only does their cost per gallon lag the retail price, simply financing the contents of three (regular/mid/premium) 10,000+ gallon tanks can be an issue when prices suddenly rise.
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