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Author Topic: Get Free Gas by simple correlation on prices.  (Read 4905 times)
tomcollins
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April 13, 2011, 03:20:01 PM
 #21

Yes, I do.  Your right, go along with it. Keep the bubble intact.

I am just Delusional,  Grin   I do like playing chess however. There is no price fixing by mandatory mark ups of 7-11 cents. It just doesn't exist.

Tell you what, go find the most remote gas station in America, call it for its Gas Prices. It should be the most expensive gas in the country. You can subtract all the taxes from everywhere to get the baseline. 

BTW: the biggest reason in differences in prices it the TAXES, the FED, State, and Localities charge.

IF the most remotest gas station in America has the highest or even a high gas price, I will concede.  But it won't.

Why would the remote gas station having the highest prices disprove your point?  You are also forgetting that not all gas is the same.  There are a ton of different blends, etc..., some more costly than others.

I already have disproved your point (that it takes 30-60 days for prices to hit the pumps).  Look at gas prices over time.  Look at a graph of oil futures over time.  The lag is not 30-60 days.  For example, war breaks out in Libya, oil prices rise.  Gas prices will have gone up within a week, maybe even within a day.  You can look at the correlation of the prices, and shift it by different amounts, and see where the greatest correlation occurs.  Use a huge backtest of data to account for seasonal adjustments, refineries coming on and offline, etc...  This is super easy to prove if it were true.  So go ahead and do it, rather than rely on your gut instinct.  With that much money on the line, I can't believe you are so clever that you are the only person to ever figure this out.

Mandatory markups are a completely different issue.

If it was that easy to make money, there is no reason why a gas station owner wouldn't employ this strategy (or just raise his prices immediately ... oh wait, you believe in a vast conspiracy that forces gas stations to lose money), and just close his doors (or close all but 1 pump, or slow down their pumps) during the cheap times, save the gas for later, then sell it then.
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April 13, 2011, 03:34:33 PM
 #22

http://maps.google.com/maps?q=gasoline near 45.45955%2C-101.91356

This is the farthest point from a McDonalds in the US, and all of the gas stations nearby.  But it won't tell you much since prices are determined by supply and demand, and the supply in sparsely-populated areas is usually higher than the supply in big cities.

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April 13, 2011, 03:35:59 PM
 #23

http://maps.google.com/maps?q=gasoline near 45.45955%2C-101.91356

This is the farthest point from a McDonalds in the US, and all of the gas stations nearby.  But it won't tell you much since prices are determined by supply and demand, and the supply in sparsely-populated areas is usually higher than the supply in big cities.

I thought prices were determined by the vast oil conspiracy?
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April 13, 2011, 04:03:54 PM
 #24

http://maps.google.com/maps?q=gasoline near 45.45955%2C-101.91356

This is the farthest point from a McDonalds in the US, and all of the gas stations nearby.  But it won't tell you much since prices are determined by supply and demand, and the supply in sparsely-populated areas is usually higher than the supply in big cities.

I thought prices were determined by the vast oil conspiracy?


Examine that, you must buy it. There is little competition. You can easily charge a lot more for it.

When supply is low and demand high, the price should go up.  So at the most remote gas station, the price should be high. We know the demand is there, if there are not a lot of others selling the same product, the price should be high.  But why isn't it?  I have been trying to tell you.

How about this one, in Lake Charles, LA ( the whole town is a Refinery), there is a Circle K gas station sitting in the middle of the refinery right next to the interstate. Supply and Demand should dictate that it should be the lowest.  Nope, one of highest prices in the whole state.

Now, you don't have to go to far to show, "conspiracies" in Louisiana.  Other than Alaska, it should have the lowest gas prices. Alaska has high gas prices too but they pay their citizens royalties of around $2000 a year to offset the prices. Imagine that, you make money just for being a citizen in Alaska.

But if you have asked around at your gas stations, (managers), you will start to see the picture. Prices are dictated to them. When it comes to gas, it is not truly a supply/demand model.

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April 13, 2011, 04:17:00 PM
 #25

http://maps.google.com/maps?q=gasoline near 45.45955%2C-101.91356

This is the farthest point from a McDonalds in the US, and all of the gas stations nearby.  But it won't tell you much since prices are determined by supply and demand, and the supply in sparsely-populated areas is usually higher than the supply in big cities.

I thought prices were determined by the vast oil conspiracy?


Examine that, you must buy it. There is little competition. You can easily charge a lot more for it.

When supply is low and demand high, the price should go up.  So at the most remote gas station, the price should be high. We know the demand is there, if there are not a lot of others selling the same product, the price should be high.  But why isn't it?  I have been trying to tell you.

How about this one, in Lake Charles, LA ( the whole town is a Refinery), there is a Circle K gas station sitting in the middle of the refinery right next to the interstate. Supply and Demand should dictate that it should be the lowest.  Nope, one of highest prices in the whole state.

Now, you don't have to go to far to show, "conspiracies" in Louisiana.  Other than Alaska, it should have the lowest gas prices. Alaska has high gas prices too but they pay their citizens royalties of around $2000 a year to offset the prices. Imagine that, you make money just for being a citizen in Alaska.

But if you have asked around at your gas stations, (managers), you will start to see the picture. Prices are dictated to them. When it comes to gas, it is not truly a supply/demand model.

I found the problem.  You have absolutely no understanding of economics.
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April 13, 2011, 04:17:21 PM
 #26

I thought prices were determined by the vast oil conspiracy?

Nearest refinery is 170 miles away:

Quote
It processes primarily sweet (low sulfur) domestic crude oil from North Dakota.  The facility manufactures gasoline, diesel fuel, jet fuel, heavy fuel oils and liquefied petroleum gas. Refined products are trucked and railed

http://www.tsocorp.com/TSOCorp/SocialResponsibility/Environment/MANDANREFINERYENVIRONMENTS

Someone should go ahead and call those gas stations and find out what effect the vast international oil conspiracy has on their prices.

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April 13, 2011, 04:25:27 PM
 #27

http://maps.google.com/maps?q=gasoline near 45.45955%2C-101.91356

This is the farthest point from a McDonalds in the US, and all of the gas stations nearby.  But it won't tell you much since prices are determined by supply and demand, and the supply in sparsely-populated areas is usually higher than the supply in big cities.

I thought prices were determined by the vast oil conspiracy?


Examine that, you must buy it. There is little competition. You can easily charge a lot more for it.

When supply is low and demand high, the price should go up.  So at the most remote gas station, the price should be high. We know the demand is there, if there are not a lot of others selling the same product, the price should be high.  But why isn't it?  I have been trying to tell you.

How about this one, in Lake Charles, LA ( the whole town is a Refinery), there is a Circle K gas station sitting in the middle of the refinery right next to the interstate. Supply and Demand should dictate that it should be the lowest.  Nope, one of highest prices in the whole state.

Now, you don't have to go to far to show, "conspiracies" in Louisiana.  Other than Alaska, it should have the lowest gas prices. Alaska has high gas prices too but they pay their citizens royalties of around $2000 a year to offset the prices. Imagine that, you make money just for being a citizen in Alaska.

But if you have asked around at your gas stations, (managers), you will start to see the picture. Prices are dictated to them. When it comes to gas, it is not truly a supply/demand model.

I found the problem.  You have absolutely no understanding of economics.


Me too, You think there is no such thing as collusion, in economic models through use of the Government, Laws, and Competitive communication.

Are you a Keynesian? 

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April 13, 2011, 04:34:34 PM
 #28

http://maps.google.com/maps?q=gasoline near 45.45955%2C-101.91356

This is the farthest point from a McDonalds in the US, and all of the gas stations nearby.  But it won't tell you much since prices are determined by supply and demand, and the supply in sparsely-populated areas is usually higher than the supply in big cities.

I thought prices were determined by the vast oil conspiracy?


Examine that, you must buy it. There is little competition. You can easily charge a lot more for it.

When supply is low and demand high, the price should go up.  So at the most remote gas station, the price should be high. We know the demand is there, if there are not a lot of others selling the same product, the price should be high.  But why isn't it?  I have been trying to tell you.

How about this one, in Lake Charles, LA ( the whole town is a Refinery), there is a Circle K gas station sitting in the middle of the refinery right next to the interstate. Supply and Demand should dictate that it should be the lowest.  Nope, one of highest prices in the whole state.

Now, you don't have to go to far to show, "conspiracies" in Louisiana.  Other than Alaska, it should have the lowest gas prices. Alaska has high gas prices too but they pay their citizens royalties of around $2000 a year to offset the prices. Imagine that, you make money just for being a citizen in Alaska.

But if you have asked around at your gas stations, (managers), you will start to see the picture. Prices are dictated to them. When it comes to gas, it is not truly a supply/demand model.

I found the problem.  You have absolutely no understanding of economics.


Me too, You think there is no such thing as collusion, in economic models through use of the Government, Laws, and Competitive communication.

Are you a Keynesian? 

If they were price fixing, why are they price fixing the price too low?  You have all these different ideas and theories, all in conflict with each other.  There is not a consistent train of thought.

And no, I'm not a Keynesian.  But do you listen to Alex Jones?

Collusion can happen, but it's very hard to enforce without governments.  There is too great an incentive to cheat.
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April 13, 2011, 04:53:26 PM
 #29

That is the genius behind their system. They lock in the profits to them by preventing others from raising and in some cases lowering the price.

For example, there are truck stops that should have very low gas prices, because they can take profits from their other businesses in the truck stop and self subsidize the gas price to get greater traffic. ( The Casino Model - most loose money on food and beverage but make it up in increased traffic due to the Great Food and prices )

Show me one example of this in the United States, and I will concede to you.  Imagine: a truck stop that could self subsidizes the Gas buy a $1 a gallon. They would make a fortune on Mechanical Services, Restaurant Services, Parts, Gadgets, etc.... because of the increase traffic. The margins on the other sales greatly out weigh the margins on Gas.  So why isn't this occurring?  Because they are not allowed to do it.

The Casino Business Model in just one Gas Franchise would become the number one gas station in the U.S.


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tomcollins
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April 13, 2011, 05:07:50 PM
 #30

That is the genius behind their system. They lock in the profits to them by preventing others from raising and in some cases lowering the price.

For example, there are truck stops that should have very low gas prices, because they can take profits from their other businesses in the truck stop and self subsidize the gas price to get greater traffic. ( The Casino Model - most loose money on food and beverage but make it up in increased traffic due to the Great Food and prices )

Show me one example of this in the United States, and I will concede to you.  Imagine: a truck stop that could self subsidizes the Gas buy a $1 a gallon. They would make a fortune on Mechanical Services, Restaurant Services, Parts, Gadgets, etc.... because of the increase traffic. The margins on the other sales greatly out weigh the margins on Gas.  So why isn't this occurring?  Because they are not allowed to do it.

The Casino Business Model in just one Gas Franchise would become the number one gas station in the U.S.



This is called a loss-leader.  Not really that uncommon.  Grocery stores do this all the time.  And no, selling gas at a $200 loss per semi-truck would not lead to an increase of $200 in business per customer.

They aren't allowed to do it?  More like they aren't idiots.
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April 13, 2011, 05:38:09 PM
 #31

Ok, I will just take my town. The $1 example was extreme just to make the point. In reality just a 5¢ difference would work, a 10¢ difference would be fantastic. Lets say a Convenient store sells 1000 gallons a day at a 1.10 / gallon. The average they get to keep is 7¢ per gallon. So they take in $1100 dollars and get to keep $77 dollars for the mark up. Remember Gas is the lowest mark up at any gas station. The average mark up is at minimum 100% for retail merchandise. So just by selling a few extra candy bars will quickly make up for the Gas.

Lets say they sell 100 candy bars at 1$ at the 1.10 gas price. They make $50 dollars profit off of the Candy Bars alone. Now if they sold the gas at a loss at $1, they have a net loss of 3¢. They give up the 7¢ mark up and take a loss of 3¢.

Now because of their lower prices, their gas sales go up to say $2000 dollars a day at a loss of $60 per day.  So they need to make up at least $60 dollars to break even.

Now traffic doubled, it stands that their in store purchases doubled. But the prices in the store have at least a 100% mark up. But anyone that shops at a convenient store know the mark up is higher than that.

Let me ask, do you thing the store will make more money by taking a 3¢ per gallon hit on the gas and taking a 50% increase on their other items that are marked up at least 100%.

But it gets better, if they make money on that model, and they invest the increase into an interest bearing account on a percentage basis to further subsidize the fuel. It would be funny to buy 10 year T-Notes at 4%, and use the Government to help. (kind of a Gotchya). They will have a model of being able to out compete competitors and put downward pressure on price of others.

Not on a grand Oil Industry Model, but on a Individual Basis with in the Oil Industry Model. So how does the Oil Industry prevent this from happening. Well with Contracts, and Laws that they have lobbied for.  Or like other industries, just buy them out. Actually in other industries their is a model to compete to get bought out. Especially in the electronics industry and internet. Buy your competitors before they can harm your bottom line.

But certain industries have prevented the competition to avoid it.  Banking, Oil, etc...

But as an individual, we can bypass all those things. If many do it on a small scale, they can't stop it.

If only with 20 Gallon gas containers. Not saying I do it: But if I was selling to my neighbors from portable Boat Gasoline Tanks, they save about 5¢, I make about 5¢ per gallon. (TAX free). Pulling it of has a lot to do with Trust. Do your friends and neighbors Trust you.

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April 13, 2011, 05:47:19 PM
 #32

Ok, I will just take my town. The $1 example was extreme just to make the point. In reality just a 5¢ difference would work, a 10¢ difference would be fantastic. Lets say a Convenient store sells 1000 gallons a day at a 1.10 / gallon. The average they get to keep is 7¢ per gallon. So they take in $1100 dollars and get to keep $77 dollars for the mark up. Remember Gas is the lowest mark up at any gas station. The average mark up is at minimum 100% for retail merchandise. So just by selling a few extra candy bars will quickly make up for the Gas.

Lets say they sell 100 candy bars at 1$ at the 1.10 gas price. They make $50 dollars profit off of the Candy Bars alone. Now if they sold the gas at a loss at $1, they have a net loss of 3¢. They give up the 7¢ mark up and take a loss of 3¢.

Now because of their lower prices, their gas sales go up to say $2000 dollars a day at a loss of $60 per day.  So they need to make up at least $60 dollars to break even.

Now traffic doubled, it stands that their in store purchases doubled. But the prices in the store have at least a 100% mark up. But anyone that shops at a convenient store know the mark up is higher than that.

Let me ask, do you thing the store will make more money by taking a 3¢ per gallon hit on the gas and taking a 50% increase on their other items that are marked up at least 100%.

But it gets better, if they make money on that model, and they invest the increase into an interest bearing account on a percentage basis to further subsidize the fuel. It would be funny to buy 10 year T-Notes at 4%, and use the Government to help. (kind of a Gotchya). They will have a model of being able to out compete competitors and put downward pressure on price of others.

Not on a grand Oil Industry Model, but on a Individual Basis with in the Oil Industry Model. So how does the Oil Industry prevent this from happening. Well with Contracts, and Laws that they have lobbied for.  Or like other industries, just buy them out. Actually in other industries their is a model to compete to get bought out. Especially in the electronics industry and internet. Buy your competitors before they can harm your bottom line.

But certain industries have prevented the competition to avoid it.  Banking, Oil, etc...

But as an individual, we can bypass all those things. If many do it on a small scale, they can't stop it.

If only with 20 Gallon gas containers.

If they can get increased business that offsets having a loss-leader in gas, they will do this.  There are some independent owners out there.  Why are they not selling a ton cheaper, crushing competition, and having the other stations get no business?

Good thing Microsoft bought out Google and Ebay before they got too big.

Buying out companies at a premium just for another to show up like wack-a-mole is a very expensive proposition.  Try to think through your nutjob theories before publishing them on the internet, though.  If you have thought through them, try thinking harder.

But I do wish you luck on buying your underground bomb to save $5.
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April 13, 2011, 05:51:57 PM
 #33

Wal-Mart offers gas as a loss-leader, at something like a 3-5 cent discount.

Regardless, what do you suppose the transport costs are on margins of 5 cents?  Not to mention the labor costs or health costs...

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April 13, 2011, 06:08:04 PM
 #34

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If they can get increased business that offsets having a loss-leader in gas, they will do this.  There are some independent owners out there.  Why are they not selling a ton cheaper, crushing competition, and having the other stations get no business?

I am sure they would like to, but they have to pay a premium for their gas. Unlike, their Franchisees. The independents don't get it for the same price. Rather them just having to cover a 3¢ loss they have to cover a 9¢ loss. Still possible, but much harder.

But when one does, a larger company will buy them out. And it doesn't cost them money. Remember business look out five years.

If one independent station (A) is making a profit of say $1 Million a year. X 5 years = $5 Million  They are competing with their Franchised station that makes the same $1 Million a year X 5 = $5 Million.

What would you pay for Station (A). They really don't look much at the real Assets but it plays a little role.

They would probably offer Station (A) about $15 Million plus Assets value.





Quote
Good thing Microsoft bought out Google and Ebay before they got too big

Completely different models. Microsoft is in the Operating system, they did own Apple stock when it was a PPC system. But they sold it off, then Apple went Intel. Ooppss.. Didn't count on that one.

But we don't need to argue about this, the vast majority of people know it happens. And I don't think there is anything wrong in buying your competition or co-opting it for your own reasons. The owners don't have to sell, but a lot do for a quick take it and run.

You know why Ebay bought Skype?  Because people were using it to bypass their profit model. They would use Ebay to find each other then Skype each other for the purchase to avoid the fees.

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April 13, 2011, 06:13:13 PM
 #35

Wal-Mart offers gas as a loss-leader, at something like a 3-5 cent discount.

Regardless, what do you suppose the transport costs are on margins of 5 cents?  Not to mention the labor costs or health costs...

Wal-Mart is in its own category, but they aren't doing it at a loss, just a discount. Big Companies, actually own wells. I developed a field for a company called IP, now I wrongly assumed it was something like International Petroleum or something like that. But it actually turned out to be, International Paper. They bought the lease to offset the cost of fuel. That is just International Paper.

Wal-Mart is big enough to not even to have to buy a well, they can hedge like no tomorrow, just like Airlines.

I like them though, they are truly competing. But look at what it takes to do it. Be the biggest company in America, with enough power to not be pushed around.

And it works, the lines at Sam's are huge with just 5¢ discount. I just want independents to be able to do what Wal-Mart can by eliminating some clauses in Franchise contracts. That anyone who knows about them, can't talk about them. They built in the NDA.

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April 13, 2011, 06:40:16 PM
 #36

Wal-Mart offers gas as a loss-leader, at something like a 3-5 cent discount.

Regardless, what do you suppose the transport costs are on margins of 5 cents?  Not to mention the labor costs or health costs...

Wal-Mart is in its own category, but they aren't doing it at a loss, just a discount. Big Companies, actually own wells. I developed a field for a company called IP, now I wrongly assumed it was something like International Petroleum or something like that. But it actually turned out to be, International Paper. They bought the lease to offset the cost of fuel. That is just International Paper.

Wal-Mart is big enough to not even to have to buy a well, they can hedge like no tomorrow, just like Airlines.

I like them though, they are truly competing. But look at what it takes to do it. Be the biggest company in America, with enough power to not be pushed around.

And it works, the lines at Sam's are huge with just 5¢ discount. I just want independents to be able to do what Wal-Mart can by eliminating some clauses in Franchise contracts. That anyone who knows about them, can't talk about them. They built in the NDA.

Your entire premise is that you can buy it "cheap" now, and then it takes 30-60 days to go up.  So which is it, are they restricted from making it too cheap, or are they restricted from making it fairly priced and forced to sell it too cheap?  Make up your mind which conspiracy theory you want to subscribe to.
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April 13, 2011, 06:52:15 PM
 #37

Wal-Mart offers gas as a loss-leader, at something like a 3-5 cent discount.

Regardless, what do you suppose the transport costs are on margins of 5 cents?  Not to mention the labor costs or health costs...

Wal-Mart is in its own category, but they aren't doing it at a loss, just a discount. Big Companies, actually own wells. I developed a field for a company called IP, now I wrongly assumed it was something like International Petroleum or something like that. But it actually turned out to be, International Paper. They bought the lease to offset the cost of fuel. That is just International Paper.

Wal-Mart is big enough to not even to have to buy a well, they can hedge like no tomorrow, just like Airlines.

I like them though, they are truly competing. But look at what it takes to do it. Be the biggest company in America, with enough power to not be pushed around.

And it works, the lines at Sam's are huge with just 5¢ discount. I just want independents to be able to do what Wal-Mart can by eliminating some clauses in Franchise contracts. That anyone who knows about them, can't talk about them. They built in the NDA.

Your entire premise is that you can buy it "cheap" now, and then it takes 30-60 days to go up.  So which is it, are they restricted from making it too cheap, or are they restricted from making it fairly priced and forced to sell it too cheap?  Make up your mind which conspiracy theory you want to subscribe to.

Franchised stations can not by contract under sell it, they are also told what their profit will be from the gas by restricting the maximum price. Do they have to listen? No, but then they don't get to buy it from their supplier and don't get any "support" from them either, and must remove the name.

Individuals, however, you and me. Have no such contracts. We can buy it and do what we wish. And I really don't care about the conspiracy, because as individuals we can bypass the process. We limit our profitability by not being a "business",  but we can maximize our margins. If enough individuals did this, "they" would be force to change.

I look at the futures and the spot price, correlate the TTM (time to market) and suck out the difference.  Gas is one of the few commodities that this can be done with on a individual basis because of access to the end product is abundant and easy  to acquire and re-sell. Technically you could do it with others like corn but it would be much harder because of all the factors (weather, disease, shelf life,  TTM is to long, etc...) And people don't have to buy Corn, but they do have to buy Gas, at least for now.

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April 13, 2011, 06:57:10 PM
 #38

Wal-Mart offers gas as a loss-leader, at something like a 3-5 cent discount.

Regardless, what do you suppose the transport costs are on margins of 5 cents?  Not to mention the labor costs or health costs...

Wal-Mart is in its own category, but they aren't doing it at a loss, just a discount. Big Companies, actually own wells. I developed a field for a company called IP, now I wrongly assumed it was something like International Petroleum or something like that. But it actually turned out to be, International Paper. They bought the lease to offset the cost of fuel. That is just International Paper.

Wal-Mart is big enough to not even to have to buy a well, they can hedge like no tomorrow, just like Airlines.

I like them though, they are truly competing. But look at what it takes to do it. Be the biggest company in America, with enough power to not be pushed around.

And it works, the lines at Sam's are huge with just 5¢ discount. I just want independents to be able to do what Wal-Mart can by eliminating some clauses in Franchise contracts. That anyone who knows about them, can't talk about them. They built in the NDA.

Your entire premise is that you can buy it "cheap" now, and then it takes 30-60 days to go up.  So which is it, are they restricted from making it too cheap, or are they restricted from making it fairly priced and forced to sell it too cheap?  Make up your mind which conspiracy theory you want to subscribe to.

Franchised stations can not by contract under sell it, they are also told what their profit will be from the gas by restricting the maximum price. Do they have to listen? No, but then they don't get to buy it from their supplier and don't get any "support" from them either, and must remove the name.

Individuals, however, you and me. Have no such contracts. We can buy it and do what we wish. And I really don't care about the conspiracy, because as individuals we can bypass the process. We limit our profitability by not being a "business",  but we can maximize our margins. If enough individuals did this, "they" would be force to change.

I look at the futures and the spot price, correlate the TTM (time to market) and suck out the difference.  Gas is one of the few commodities that this can be done with on a individual basis because of access to the end product is abundant and easy  to acquire and re-sell. Technically you could do it with others like corn but it would be much harder because of all the factors (weather, disease, shelf life,  TTM is to long, etc...) And people don't have to buy Corn, but they do have to buy Gas, at least for now.


I still am trying to understand your theory.

1)  Gas station buys a ton of gasoline from supplier for $X.
2)  Oil futures go up by 50% due to some crisis.
3)  Gas station owner would like to raise prices since his next shipment will be more expensive, but cannot due to contract with supplier.  Supplier dictates every price change, which happens daily, even though he may only get his tankers delivering every week.
4)  Eventually he runs out of his gas, buys more from his supplier (30-60 days later), and is now allowed to set his prices higher.

Is there any part of this that I missed?
wb3
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April 13, 2011, 07:13:20 PM
 #39

For going the individual method.

I will give you a for example:

In the U.S.:

If a gas station fills his underground tank with 10,000 gallons of gas that he bought at $1 a gallon.

Now assume he sells no gas for a month.

Then Gas goes up to $2 a gallon from his supplier.

The Gas that he has in his tank that he bought at $1 a gallon, can not be sold at the $2 price point.

He will have to sell his gas at the $1 rate plus agreed upon mark up until he sells 10,000 gallons. Then he can raise prices. There is an averaging that is allowed, if he receives a delivery before he sells the 10,000 gallons. This is kind of allowing the mixing of fiduciary funds in an insurance account. Most avoid it in case someone complains of gouging.

You can usually see this in work if your town has a lot of gas stations, especially recently with big changes happening fast.

You should have seen one station with several cents difference, some high, some low.  Why does this happen? If it worked as you said, the prices among stations should always be close to each other.


Net Worth = 0.10    Hah, "Net" worth Smiley
tomcollins
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April 13, 2011, 07:18:15 PM
 #40

For going the individual method.

I will give you a for example:

In the U.S.:

If a gas station fills his underground tank with 10,000 gallons of gas that he bought at $1 a gallon.

Now assume he sells no gas for a month.

Then Gas goes up to $2 a gallon from his supplier.

The Gas that he has in his tank that he bought at $1 a gallon, can not be sold at the $2 price point.

He will have to sell his gas at the $1 rate plus agreed upon mark up until he sells 10,000 gallons. Then he can raise prices. There is an averaging that is allowed, if he receives a delivery before he sells the 10,000 gallons. This is kind of allowing the mixing of fiduciary funds in an insurance account. Most avoid it in case someone complains of gouging.

You can usually see this in work if your town has a lot of gas stations, especially recently with big changes happening fast.

You should have seen one station with several cents difference, some high, some low.  Why does this happen? If it worked as you said, the prices among stations should always be close to each other.



How come gas stations change prices daily?  I know they aren't getting tankers delivering daily.

Gas stations near each other almost always have similar prices where I live.  Occasionally one might be slow to change, and a better "brand" is going to be at a small premium.
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