Gas prices
Starting the stampede. Gas price .99
Forum Discussion
While I'm not disputing your basic facts, I have to ask have you every run a small business.
Were you successful, profitable, charging less than 100% above wholesale costs for the products you sold?
There are at least two additional levels of the gasoline/ diesel supply chain you have missed. Most stations are supplied by either a company owned distribution center for large chains like Loves and P/FJ. Everyone else gets truck load shipments from a local or regional distribution center.
Once worked for a fellow who had a small fleet station near downtown Dallas. He purchased 6,500 gallon truckloads two or three times a week.
His wholesale cost was near $1.000 per gallon. He could receive the fuel for 85 cents, if he picked it up at the distribution center with his own tanker trucks.
Ever seen the paperwork and regulations for hazardous materials carriers? You need a 3/4 ton pickup to carry it all.
At the time, the gasoline refinery costs was near 56 cents. That is the same as the gasoline futures price you mentioned, which is two to three months in the future.
And that price is at the refinery.
The wholesaler had to pay transportation costs, usually a combination of pipeline and trucking. Some places in the nation have rail delivery costs. Plus the costs of maintaining the storage infrastructure.
He was selling the fuel for about $1.65 per gallon, and not making a killing after he paid staff, taxes, inspections fees, etc.
Also, a retailer cannot sell the truck load of fuel for what they paid for it. That is a fast way to go broke in rising prices. He must sell the fuel for a costs that will leave him enough money to pay for the next full load.
It is also very hard to tell if the place local branded location selling fuel is corporate owned or a franchisee.
Many fuel locations make more profit on the store and retail snacks and such than on the fuel they sell.
I'm not denying that some price gouging occurs. And some corporate locations sell enough fuel per day to make a very nice income.
But a lot of mom and pop locations still exist, and they are getting by basically because they provide their own labor for 'free'.
Were you successful, profitable, charging less than 100% above wholesale costs for the products you sold?
There are at least two additional levels of the gasoline/ diesel supply chain you have missed. Most stations are supplied by either a company owned distribution center for large chains like Loves and P/FJ. Everyone else gets truck load shipments from a local or regional distribution center.
Once worked for a fellow who had a small fleet station near downtown Dallas. He purchased 6,500 gallon truckloads two or three times a week.
His wholesale cost was near $1.000 per gallon. He could receive the fuel for 85 cents, if he picked it up at the distribution center with his own tanker trucks.
Ever seen the paperwork and regulations for hazardous materials carriers? You need a 3/4 ton pickup to carry it all.
At the time, the gasoline refinery costs was near 56 cents. That is the same as the gasoline futures price you mentioned, which is two to three months in the future.
And that price is at the refinery.
The wholesaler had to pay transportation costs, usually a combination of pipeline and trucking. Some places in the nation have rail delivery costs. Plus the costs of maintaining the storage infrastructure.
He was selling the fuel for about $1.65 per gallon, and not making a killing after he paid staff, taxes, inspections fees, etc.
Also, a retailer cannot sell the truck load of fuel for what they paid for it. That is a fast way to go broke in rising prices. He must sell the fuel for a costs that will leave him enough money to pay for the next full load.
It is also very hard to tell if the place local branded location selling fuel is corporate owned or a franchisee.
Many fuel locations make more profit on the store and retail snacks and such than on the fuel they sell.
I'm not denying that some price gouging occurs. And some corporate locations sell enough fuel per day to make a very nice income.
But a lot of mom and pop locations still exist, and they are getting by basically because they provide their own labor for 'free'.
