Gouging

[Nemo2]

I keep my my gas receipts going back at least 13 years.

It's nice to have a hobby.

 

[rk911]

I keep my my gas receipts going back at least 13 years. I paid as low as $1.70/gal in the last couple years where I live, but the gas tax was doubled this year, and prices have continued to climb. I get decent gas mileage, but I'm cutting back even more on driving to compensate for the big climb in prices.

the principal station we use is $2.79 today. my log shows it was $2.65 a year ago, roughly a 5% increase. and our gas tax in illinois has also doubled.

 

[copyright1997reloaded]

It is really surprising to me the number of posters in this thread who do not understand basic microeconomics. For example, "supply and demand" refers to people who sell an item (supply) and people who buy it (demand). It has nothing to do with the supplier's cost for the item.

Surprising? Not to me after looking at not only this thread but many posts on many threads. In the "real world", it is even worse - never ending talk about how unfair things are and how they need to be changed (in a way that ignores basic economic principles). While not perfect, in the distant past many were taught basic economics and a bit of how markets work, e.g. "supply and demand". It appears that is no longer the case, and we are even seeing more and more of it even here on ER.

I better stop now else I wander into forbidden discussions.

signed, BS Economics & Phi Beta Kappa member.

 

[Montecfo]

Surprising? Not to me after looking at not only this thread but many posts on many threads. In the "real world", it is even worse - never ending talk about how unfair things are and how they need to be changed (in a way that ignores basic economic principles). While not perfect, in the distant past many were taught basic economics and a bit of how markets work, e.g. "supply and demand". It appears that is no longer the case, and we are even seeing more and more of it even here on ER.

I better stop now else I wander into forbidden discussions.

signed, BS Economics & Phi Beta Kappa member.

How about people including elected officials with degrees in economics who seem to have no understanding of it? And I think we are all aware of such folks. Otherwise, you would have to be ignoring the news, perhaps blissfully. See if you can decipher my point.

 

[Dtail]

No matter the situation, our local Shell always has the lowest prices in our area except Costco among the stations with the "cleaner detergent" gasoline.

 

[Idnar7]

Thanks for all the responses. It just amazes me how you can almost guess when prices will rise based on global issues. The news said the other night that MN get 99% of its gas from Canada and No Dakota. I understand oil/gas is a global market so Saudi attack will everyone. I agree that gas here is a bargain, but I think the local stations overreact when they can. If one raises prices they all match. Just whistling in the wind

 

[davebarnes]

Buy a BEV.

 

[Red Badger]

I just go to the gas station in our local shopping center. We don't drive 15K miles/year, so I don't care about the price of gas (within reason). My "money time" is best spent elsewhere.

I don't think convenience stores have realized significant profits on gasoline for decades. However, its a rare day when I go inside on of these. Those buck-seventy-five pints of water and $8 six packs of ol' Bladder Buster are enough to convince me to get water and beer down the road. I also believe the real money in retail gas was back in the day (God, I'm old) when the gas station vacuumed your car and cleaned the windows with any fill-up. Let's not overlook a decent guy gapping points and plugs, while doing the 3K mile oil change.

Locally, gas has been hovering around $2.60. Last week, while in LA, I had the pleasure of paying a buck (+) more. WRT to gasoline, I'm much more leery of govy theft than merchant shenanigans.

But if you wanna start a real dust up, let's commiserate about Blue Rhino selling 17 pounds of propane in every 20 gallon tank.

 

[Music Lover]

But if you wanna start a real dust up, let's commiserate about Blue Rhino selling 17 pounds of propane in every 20 gallon tank.

I thought for safety reasons they're only allowed to fill propane tanks to 80% capacity. So 16 pounds in a 20 pound tank? Our local Costco calls it a 20 pound tank "fill" instead of selling it as 20 pounds. I assume the "fill" is 16 pounds...I'll have to weigh it before and after next time.

 

[Nemo2]

I thought for safety reasons they're only allowed to fill propane tanks to 80% capacity.

On the Baja, in our Pleasure Way, the propane stations were outside of town, (due to 'accidents' we were told)........before we could halt them we had our tank overfilled by two kids who appeared to be 12 years old, and had to release some propane into the wind.

 

[travelover]

I thought for safety reasons they're only allowed to fill propane tanks to 80% capacity. So 16 pounds in a 20 pound tank? Our local Costco calls it a 20 pound tank "fill" instead of selling it as 20 pounds. I assume the "fill" is 16 pounds...I'll have to weigh it before and after next time.

My local gas station refills propane tanks - a full 20 pounds and charges by the gallon, just like for gasoline.

 

[Alan]

I thought for safety reasons they're only allowed to fill propane tanks to 80% capacity. So 16 pounds in a 20 pound tank? Our local Costco calls it a 20 pound tank "fill" instead of selling it as 20 pounds. I assume the "fill" is 16 pounds...I'll have to weigh it before and after next time.

My local gas station refills propane tanks - a full 20 pounds and charges by the gallon, just like for gasoline.

I wonder if this is a difference between the USA and Canada? (Music Lover lives in Winniepegg)

 

[Music Lover]

I wonder if this is a difference between the USA and Canada? (Music Lover lives in Winniepegg)

I did a search and it looks like the same rules applies in the US:

"The 80% fill rule is a preventative safety measure against the fluctuations that happen inside a tank. Propane, like water, will expand when heat is added to it. Propane, however, will increase in volume nearly 17 times greater than water over the same temperature increase. To allow for this expansion, propane containers are filled to only 80% of their capacity."

https://www.amerigas.com/amerigas-blog/2013/november/propane-tanks-and-the-80-percent-fill-rule

 

[Alan]

I did a search and it looks like the same rules applies in the US:

"The 80% fill rule is a preventative safety measure against the fluctuations that happen inside a tank. Propane, like water, will expand when heat is added to it. Propane, however, will increase in volume nearly 17 times greater than water over the same temperature increase. To allow for this expansion, propane containers are filled to only 80% of their capacity."

https://www.amerigas.com/amerigas-blog/2013/november/propane-tanks-and-the-80-percent-fill-rule

Thanks for the follow up, I was too lazy to check, just noticed that you are located in Winniepeg.

 

[MichaelB]

I think the 16 pound fill is just a retail practice to disguise a higher price, and may have roots in a safety concern about the dangers of overfilling. I have our tanks filled at UHaul and they fill to 20 lbs.

 

[sengsational]

With the overfill protection device that's required by US law, it's not possible to overfill (given the device is working). So, yeah, I refill at BJ'S or U-haul and get closer to 20#, but it's metered in gallons, and the associate often doesn't bother with the weight... just waits until the OPD kicks-in, and the flow stops.

 

[ERD50]

Thanks for all the responses. It just amazes me how you can almost guess when prices will rise based on global issues. The news said the other night that MN get 99% of its gas from Canada and No Dakota. I understand oil/gas is a global market so Saudi attack will everyone. ...

If you understand that oil/gas is a global market, why do you mention that MN get 99% of its gas from Canada and No Dakota? Why are you amazed that you can 'guess' when prices will rise based on global issues? It's no guess, it happens. It sounds to me like you still think the Saudi situation should not affect MN gas prices?

... I agree that gas here is a bargain, but I think the local stations overreact when they can. If one raises prices they all match. Just whistling in the wind

You seem to think that gas stations dictate the price. If that were so, why did gas ever come down from the $4~$5 prices we saw a few years back? Why not just raise prices, and everyone else will match them? Profits!

It doesn't work that way, there actually is competition and a free market in gas prices, which is why we see these prices change (up and down) with conditions. Do you have a better plan?

IL recently *doubled* its tax on gasoline. That's right, *doubled*. Overnight. Admittedly, they had not raised it for many years, so this was called an inflation adjustment. OK, but it just goes to show who really has pricing power, and it isn't the gas stations. I can go across the corner or down the street to compete on gas if I want. To compete on state taxes, I need to drive too far for it to be practical.

According to this chart, refining costs and profits (not sure why those are lumped?) make up 13% of the average price of a gallon of gasoline, while Federal and State taxes make up 17%. Hmmmm.

And 56% is the cost of the crude oil, so yes, supply of crude will affect gasoline prices.

https://www.eia.gov/energyexplained/gasoline/factors-affecting-gasoline-prices.php


-ERD50

 

[papaof2]

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.

Sorry, but you're showing ignorance of how supply and demand work. If the dealer doesn't raise prices when the supplier does (almost always immediately) then the dealer will NOT be able to refill his tanks.

$0.20 is not gouging, it's where the market is. If gas jumped $1 on the same basis, that could be considered gouging (or do you not remember the reports from 9/11?). Under the circumstances, an increase of less than 10% is reasonable (unleaded regular gas was $2.49 so $0.20 is less than 10%).

I've been tracking gas prices (and other maintenance costs) on my vehicles for years and I have the paper records (small, spiral-bound notebook in each vehicle) to back up what I say.

Yes, Costco was cheaper - initially almost $0.30 cheaper, but the local station has already come down $0.06 of that $0.20 increase. The rates the supplier pays get adjusted so the next delivery to the local station has its price adjusted and so forth.

 

[LFOD]

Given that gasoline retailing is a competitive business, increasing the cost to account for the Saudi attack is not only not bad but the best way of allocating resources. Government price controls, the obvious alternative to a free market, would be a bad idea. Higher gas prices mean that each person can make the decision to drive less, buy a more efficient car (ameliorating the "power" of gas retailers), drive an EV, etc. Price controls just make an artificially cheap cost that is "first come, first served" and result in hoarding until the supply is gone. If the mandated price is unprofitable then there will be no resupply, much less the expedited resupply that higher prices would cause (for example, in an emergency).

 

[2177V]

Capitalism always involve to some gouging. The alternative is Socialism which the government controls everything. I prefer the former since you can always boycott the gas station.

 

[JJpop]

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?

Come on now,the oil companies would never do that.They only have their customers best interest in mind.

 

[steveark]

I'm probably the only responder that actually made gasoline. You bet we raised prices when world events impacted oil supply. With futures trading accelerating the speed at which the market responds to predicted supply and demand changes you'd be out of business overnight if you put a delay in your company's response that your competition did not. The market sets prices and it never cared when we typically sold gasoline at below cost every winter and lost millions of dollars. I can't blame the retail market for passing on the price increases either. It's a low margin business at both the refinery and retail market. Gouging is when prices are jacked up to extreme levels due to a huge supply disruption, it cannot happen when there is ample supply because a very efficient market force, called competition, prevents it.

 

[Caskem]

It's not gouging...it's the free market. You can decide not to buy gas, you can shop for gas, you can buy a Tesla or you can use a skateboard. These prices are MUCH better than in years past.

 

[Bir48die]

I'm with you that say it's ok to react to market disruptions in regards to futures. It's the nature of the beast. Also agree that in total it's a low margin business on e face of it.

To me gouging is finding a $.40/gallon difference in pricing within a mile. In that case I know where to fill up and where not to.

 

[joeea]

Back in the 70s when inflation was peaking, I worked at a supermarket in the grocery department.

We had to change prices on items often - sometimes more than once a week.

I got yelled at by several people, was told that the company was "gouging", was told that what I was doing was illegal, and had a soup can thrown at me.

I just shook my head and laughed.