Aces High Bulletin Board
General Forums => The O' Club => Topic started by: SpazMan on July 22, 2008, 04:02:35 PM
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Crude dropped to $128.00 dollars per barrel. Where's the relief at the pump?...... :furious
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$3.81 here .. http://www.massachusettsgasprices.com/index.aspx?&area=Whitman
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Went from $4.24 yesterday to $4.22 today....
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Went from $4.24 yesterday to $4.22 today....
There's your relief at the pump!! :rock :D
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The price actually went up here last week on the same day oil went down something like $30.. Gotta love how fast they are to raise the prices but lower them.. heh..
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Was 3.99 last I saw here.
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They were saying on the news how the gas station owners ALWAYS up the price the day after oil prices go up, but wait a few weeks to bring the price down when oil prices drop.
I think it should be looked into as a form of price gouging since they always seem to increase the price while still having thier pumps filled with the cheaper gas before getting the higher priced fuel.
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They were saying on the news how the gas station owners ALWAYS up the price the day after oil prices go up, but wait a few weeks to bring the price down when oil prices drop.
I think it should be looked into as a form of price gouging since they always seem to increase the price while still having thier pumps filled with the cheaper gas before getting the higher priced fuel.
It is price gouging.
If you don't like it, don't buy it.
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3.38 here in california, with highs of around 4.57-ish
All depends how close to a city you are, and how far "off the beating path" the fuel trucks have to drive to get fuel out to some locations.
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There's your relief at the pump!! :rock :D
:rofl :rofl :rofl
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It is price gouging.
If you don't like it, don't buy it.
:aok
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3.99 was the best I could find. Only had 7 more miles to empty allegedly. cost me almost 80 bucks to fill up. Yeooooooooooooooouch!
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Actually went down surprisingly. 4.09 -> 3.99. But IIRC, when oil was below $128 a barrel a few months back, we were paying 3.8x here.
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Saw a $3.64 last week, average I would guess is $3.99.
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It is price gouging.
If you don't like it, don't buy it.
Kind of hard to do since everyone that runs a gas station does it. Of course the government doesn't do anything about it since they want to get thier share of the gas taxes on it. Not to mention the extra .10 a gallon we're gonna end up paying once they pass that.
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Crude oil went down.. Keep in mind it has to be refined and it is a process, so the gasoline that we are currently burning was bought by the refineries quite a while ago.. Not sure on the specific time frame it takes, but gasoline will always lag behind crude in terms of price fluctuations..
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Crude dropped to $128.00 dollars per barrel. Where's the relief at the pump?...... :furious
IT'LL BE HERE IN.......
2 WEEKS :D
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Went down about $.15 a gallon here.
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Oil will have to fall quite a ways before you see any noticable difference at the pump. You need to think of all the middle-men who've been getting squeezed by the high cost of oil who now have to make up for that lost profit.
My best WAG is if and when oil drops below $100, gas will probably drop back to 3.50, but it won't go lower than that for a loooong time (if ever - after all.. it has already been demonstrated that people will buy the gas no matter what) unless the price of oil absolutely tanks (like back to the days of $20 a barrel).
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Oil will have to fall quite a ways before you see any noticable difference at the pump.
I noticed the $.15 drop right off the bat. :rofl
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The rice per barrel you are seeing now is a futures price for delivery later this year. Keep in mind, that the prices we saw fro a barrel at almost $150 have yet to hit the market place. You may actually see it going up before it goes back down.
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7 years ago it was less than 1 dollar for premium in Denver.
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The rice per barrel you are seeing now is a futures price for delivery later this year. Keep in mind, that the prices we saw fro a barrel at almost $150 have yet to hit the market place. You may actually see it going up before it goes back down.
I know what you are saying but it should work in reverse. When the price goes up and is reflected at the pump within a day or two they didn't pay that price for the oil because it didn't hit the marketplace yet.
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I know what you are saying but it should work in reverse. When the price goes up and is reflected at the pump within a day or two they didn't pay that price for the oil because it didn't hit the marketplace yet.
As far as the gas retailer goes the logic is something like this: If you are a retailer that has oil in the tank you bought for less and the price of your future product rises, you have to raise the price of the product on hand to enable you to replenish your inventory at the new higher price.
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I know what you are saying but it should work in reverse. When the price goes up and is reflected at the pump within a day or two they didn't pay that price for the oil because it didn't hit the marketplace yet.
It may be price gouging, it might not. Perhaps the barrel of oil that made that gas did actually go up a few cents.
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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
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Don't drill in Anwar! it'll hurt the Caribou!
(http://i192.photobucket.com/albums/z128/bhmason_album/Northshoredrillingcaribou.jpg)
(http://i192.photobucket.com/albums/z128/bhmason_album/Northslopebearsatplay.jpg)
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^
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Those are the pics the Envirolibs do not want you to see. :noid
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First ones a photoshop.
Dunno about the second one.
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First ones a photoshop.
Dunno about the second one.
Why do you say the first one is a photoshop?
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First ones a photoshop.
Dunno about the second one.
Yah, thought occurred to me as well...but it's pretty farn funny anyhow! The ones lower, nearer the front look such
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1st pic is not a photoshop at all but it is also not ANWR, It's Prudhoe Bay it is, like ANWR in the north to northeastern coastal part of the state
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They grow caribou out of the ground up around there?
Is it a nuclear power plant in disguise?
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The photo has been enlarged that is why it looks awful... http://www.msunderestimated.com/CaribouNoImpact.jpg That is a better quality shot, there is a little uneven terrain and several of the caribou are lying down. This same photo was on CNN 2 days ago and they assured the audience that it was not a photoshopped item.
Another shot: http://www.alaskanenergyresources.com/Content-Public/Photos/Caribou-in-Prudhoe-Bay/Caribou-in-Prudhoe-Bay-4.jpg
And another: http://www.geocities.com/TheTropics/Shores/1100/PrudhoePics/caribou.jpg
Last: http://www.accentalaska.com/permenant/prudhoe/MedRez/042_065.jpg
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Charon,
You're saying that a station owner makes $0.40 on a 20 gallon sale of $4.00/gal gasoline after 2% cc merchant fee? That doesn't seem right.
Five hundred customers per day (one customer every 3 minutes, 24 hours per day) at 20 gallons, $4.00/gal each is:
Total sales: $40,000
Oil distributor and gasoline taxes: ($39,000)
Dealer gross sales: $1,000
cc merchant fee @ 2%: ($800)
Operating gross: $200
Dealer daily operating gross sales of $200 before wages, facility rental/mortgage, equipment, utilities, insurance, taxes? And that is a mega station with 500 customers per day.
Are you sure about that?
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On a separate note, It's nice to see the Prudhoe Bay wells and pumping stations are still working after more than 25 years... :)
I designed all of the extreme temperature high voltage switches, cast coil transformers and substations used throughout the entire project.
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I know a few station owners.. they say they make a lot of money on gas.
lazs
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Impressive, Rolex! Lazs, my family owns 3 gas stations, typical mark-up is about 8/10ths of a cent per gallon. The better the location, the more you can mark it up though.
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You're saying that a station owner makes $0.40 on a 20 gallon sale of $4.00/gal gasoline after 2% cc merchant fee? That doesn't seem right.
2-4 cents would be a good net profit estimate per gallon depending upon their volume/contracts or if they are a marketer (distributor) as well as retailer, etc. There can be exceptions to the rule, but the market is generally very competitive and you try to match the lowest price in a specific market to keep your volume up.
There will be periods where perhaps you can get a few more cents for a few more days, but having those signs with the big price numbers clearly in view makes retail gasoline pricing perhaps the most transparent of any industry leading to little opportunity to manipulate the local market. Might a bunch of stations decide to keep retail prices higher after wholesale prices drop (not formally in an FTC antitrust sense but through "I won't drop until so and so drops") -- sure. But, there is always a "so and so" with a better wholesale deal who decides to drop and pull your customers away so they can get more volume at their sites and in the stores where the real profits are. Riding the "high" prices usuall lasts only days -- maybe a week or two -- and the "gouging" would still likely be less than a typical profit margin on just about anything else you buy.
Similarly, when some pipeline gets disrupted etc. and wholesale rack prices shoot through the roof you have to keep your retail prices down as best you can to match whoever happens to be sitting on a better supply deal at the time and decides to break even at the pump and get volume through the consumer sticker shock that follows where people become even more price sensitive.
Now, in the store you can make 30+ percent margin on your shelf goods. You get some of the ATM fee. You get a good margin on the Car Wash and foodservice/coffee/beverage program. Lottery tickets, etc. When gas was at $2 per gallon you made more on gasoline. Not as much as the 1990s, but enough to be useful.
Gasoline is largely the one-stop-shop volume generator -- get them on the site and hope they go into the store. Make some money when you can, and try to match you competitor making as much margin as you can without losing volume. There are price modeling companies that can allow a retailer to perhaps charge a few more cents than the lowest in the market without losing volume depending upon such things as the side of the street, time of day and other offers you have at the site. Maybe 3-4 cents above the lowest price. For a while major brand loyalty allowed that as well -- Shell, BP, Chevron, etc. But, price is king in petroleum and the transparency assures the consumer that there will usually be a high degree of competition.
I know a few station owners.. they say they make a lot of money on gas.
I'd like to talk to them. E-mail me their contact info. I know a few hundred who collectively own tens of thousands of stations who don't. Gasoline has moved from being a primary profit center to a volume generator and that has been the case for about a decade or so now. Gasoline still is a primary source of revenue, but not profits. The goal is to not lose money, and perhaps make a few cents most of the time.
I know some larger distributors who earn a very good living moving gasoline to retailers, not at a huge profit margin even there but we're talking millions of gallons and without the CC fees, of course. One actually races a modified Sea Fury and has a few AT-6s (as well as kids flying in the Air Force). Still not a ticket to mint money realtive to other areas.
Charon
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I'd like to talk to them. E-mail me their contact info. I know a few hundred who collectively own tens of thousands of stations who don't. Gasoline has moved from being a primary profit center to a volume generator and that has been the case for about a decade or so now. Gasoline still is a primary source of revenue, but not profits. The goal is to not lose money, and perhaps make a few cents most of the time.
Charon
Why does it matter? What lazs posts is the truth. He's often cited as an expert witness in court. From patent cases to civil suites, even divorce!
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Why does it matter? What lazs posts is the truth. He's often cited as an expert witness in court. From patent cases to civil suits, even divorce!
Lazs is WAY better than E. F. Hutton.
;)
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charon.. I know a few.. maybe they are not telling me the truth. 2-4 cents a gallon.. how many gallons a month are the station owners you know selling?
lazs
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charon.. I know a few.. maybe they are not telling me the truth. 2-4 cents a gallon.. how many gallons a month are the station owners you know selling?
That's all over the place. Some might do 200,000 per year, others a million and others like a Costco maybe 6 million or more per year. An average might be 600,000 to 1 million or so today. And 2-4 cents is considered to be a fairly good margin today. In fact, I may still be caught somewhat in the $3 per gallon mindset and not the $4 per gallon reality of the past few months. 2 cents might be generous today, since I tend to trend towards being conservative in my estimates. But, you do have cash customers and debit in the mix that eliminate the credit fees (though handling cash has costs and debit does have fees of its own). As an average gasoline represents about 70 percent of a store's revenues but only about 30 percent of its profit. Some will be on the upside of that average and some on the downside. You will have sites within an single multi-unit company that are on all sides of the equation.
I know all the people in this article personally, and they will survive. It's tough for them but they have economy of scale and profit diversification. In fact most of the people I know will survive since they tend to be larger operators who have done most of the right things in the past 10 years or so.
http://www.msnbc.msn.com/id/23904590/
I don't know any of these people, but there are more than a few like them:
http://www.jsonline.com/story/index.aspx?id=610122
The repair shops are a dying bastion of the single site direct dealer. They can generate a good living in good times. The same for the smaller mom and pop c-store retailers, in good times, or in rural markets lacking much direct competition.
The reality is probably somewhere in between both articles. Which is the point I made to the WSJ, CNN and AP reporters (which went ignored :)) Times are tough. The industry has been forced to be efficient before now. Most should survive, since the least competitive exited in the late 1990s. We haven't seen a dramatic drop in station count this year. However, if $4 per gallon continues more of the marginal opators will be exiting and 2009 might show more dramatic losses.
Charon
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I'm sorry, Charon, but you are creating confusion because of the terms you are using. In business, margin and profit and net profit are all different. The information in your earliest post conflicts with your later posts and gives a completely different image. If you mixed these terms with the media as you did here, I can understand why they reported it as more dire than you meant. I'm not criticizing your data, but suggesting you proofread your terms more carefully.
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In my first post I used the term net instead of gross. Simple typo. Of course, I am more careful when I'm not rushing out a post on a game BBS where such errors have no real consquence.
And, as I think I noted, margin was not the area where there was "confusion." It was if the current environment is causing an accelerated number of closings. Is the loss of 3000 stations this year all that diffferent from previous years back to 1998? Not really. Will next year show a bigger bump? Hard to say but it certainly would not be surprising. BTW, I also sent them historial data back 10 years relative to the drop in station count which is about as clear as you can get. Not rocket science. WSJ even made a chart out of it, I believe.
But, they tended to lead with "3000 stations closed!" Yeah, well so what's new there? Typical considering how news stories are assigned and the need to have some drama and punch in the reporting.