I think it should be looked into as a form of price gouging since they always seem to increase the price while still having their pumps filled with the cheaper gas before getting the higher priced fuel.
As Casca said, you price to pay for your next tank of gas, not the tank you are selling.
Would anybody consider a 10 percent profit margin gouging? A gasoline retailer would kill for that but their profits are not done on a percent basis. "Gouging" is a bit of a joke at the retail level when you consider that riding those "high" prices for the short time you can before competition forces the market to adjust (a few days to a week) means making 5 or 6 cents off of a $4 gallon of gas net instead of 0-3 cents. But hey, the numerous small business people that own and retail gasoline should do it as a charity, I suppose. When they have to eat the initial run up during a volatility spike making 0 or losing a few cents per gallon nobody complains much though. It's not like handling the fuel product at little to no profit with numerous govt. regulations should provide any financial benefit, right? Filling your and my tank should be a selfless act of kindness.
BTW, the credit card companies make far more on a gallon of gas than the station owners. Their merchant fees are on a percent basis vs the industry which operates on flat cents per gallon. Companies that rely on gasoline profits of any significant degree are either no longer in business or on their way out. If a station owner nets 10 cents per gallon the credit card association might get 8 cents off the top. Then factor in the rest of your expenses. Then drop a penny or two in the bank.
The WSJ, CNN and AP recently covered the impact of today's prices on station owners showing how devastating they are. Now both overplayed the impact for dramatic effect (I was the primary statistical source and they neglected to note as I clearly pointed out verbally and in e-mails that this year's figures for a reduction in station count were not all that extraordinary). But the basic reality is that current prices are very hard on those who sell the product. And, we might very well see a far more significant reduction next year if these recent super high prices continue.
Fortunately -- sort of -- underground storage tank regulations of the late 1990s caused considerable consolidation in the industry among the most marginal operators and a focus on alternative profit centers and efficiency among those that remained. They are better prepared to survive the current climate, but if inflation hits discretionary income to the point where we see a significant loss in store sales then that will be harsh.
Charon
