None of this is rocket science.
Many, perhaps most, retail outlets do not own their gas and tanks, lines, pumps, etc., because of the significant cost involved in the facility and gasoline inventory.
If you don't own your stuff, the guy who does tells you what to sell his gas for, and sends a commission check for the sales, and you don't have to tie up hundreds of thousands of dollars of your own money, a significant portion of which is in a highly price volatile and sensitive commodity. When gas was thirty or forty cents a gallon wholesale and the EPA was just hatched, you could afford to price war. Those days are LONG GONE. Federal and state regulation has run most people out of business. This is why there is no longer a gas station on every corner.
If you don't want to be in bed with a big company that can buy and sell you and never know it bought anything, and own your own stuff, your supplier will send you wholesale price updates at least daily, often several times a day, or even an hour, if the price is volatile. You price your gas as you see fit, bearing in mind gas sales are extremely price sensitive, and keeping in mind any statutes on the books in the subject jurisdiction controlling anti competitive trade practices. Generally, it is an anti competitive trade practice to sell something for less than it costs, absent special or specific circumstances. It should be obvious that this prevents the guys who can lose money the longest from running the few little guys left out of business.
If the price goes up, it is prudent to increase the price immediately, because you have to have $$$ to replace the current inventory as it sells.
If the replacement price goes down, you hang on to the price as long as you can to mitigate the potential or actual loss from those times you had gas in the ground that cost more than you could sell it for, because of the price sensitive nature of the commodity.
Around here, at least one company seems to price their retail product on the basis of the cost of what they have in the ground at any given time, as opposed to replacement cost. They are too low when others are high, and too high when everyone else is low. This is not the norm, and probably an accounting nightmare.
It is still a somewhat free country. Anyone who has the means to do so can get into the business, and price as they see fit, again observing any controlling statutes on anti competitive practices. Or they can talk about buying an old corvette and complain. Every year.
Many, perhaps most, retail outlets do not own their gas and tanks, lines, pumps, etc., because of the significant cost involved in the facility and gasoline inventory.
If you don't own your stuff, the guy who does tells you what to sell his gas for, and sends a commission check for the sales, and you don't have to tie up hundreds of thousands of dollars of your own money, a significant portion of which is in a highly price volatile and sensitive commodity. When gas was thirty or forty cents a gallon wholesale and the EPA was just hatched, you could afford to price war. Those days are LONG GONE. Federal and state regulation has run most people out of business. This is why there is no longer a gas station on every corner.
If you don't want to be in bed with a big company that can buy and sell you and never know it bought anything, and own your own stuff, your supplier will send you wholesale price updates at least daily, often several times a day, or even an hour, if the price is volatile. You price your gas as you see fit, bearing in mind gas sales are extremely price sensitive, and keeping in mind any statutes on the books in the subject jurisdiction controlling anti competitive trade practices. Generally, it is an anti competitive trade practice to sell something for less than it costs, absent special or specific circumstances. It should be obvious that this prevents the guys who can lose money the longest from running the few little guys left out of business.
If the price goes up, it is prudent to increase the price immediately, because you have to have $$$ to replace the current inventory as it sells.
If the replacement price goes down, you hang on to the price as long as you can to mitigate the potential or actual loss from those times you had gas in the ground that cost more than you could sell it for, because of the price sensitive nature of the commodity.
Around here, at least one company seems to price their retail product on the basis of the cost of what they have in the ground at any given time, as opposed to replacement cost. They are too low when others are high, and too high when everyone else is low. This is not the norm, and probably an accounting nightmare.
It is still a somewhat free country. Anyone who has the means to do so can get into the business, and price as they see fit, again observing any controlling statutes on anti competitive practices. Or they can talk about buying an old corvette and complain. Every year.
