"How do convenience stores decide when to change the price of gasoline?" a passenger in the NewsCutMobile asked this afternoon.
Easy enough. When the price of crude rises, the employees run out to change the sign. When the price of crude drops, they walk.
There was a lot of running going on today. Crude oil prices skyrocketed in the last couple of days, to near $139 a barrel, after dropping to about $122 earlier this week. The average price of gasoline in these parts dropped to near $3.72 (How do you like that feeling when you see $3.72 posted and figure, "Wow, at these prices I should fill up!"?)
The only thing that was preventing prices from increasing at the gas station where our friend pictured above works, was the wind. She kept trying to put the numbers up for the higher price, but the wind kept blowing them off her price-raising tool, momentarily frustrating her but -- also momentarily -- becoming the motorist's best friend.
Ingenuity won out, as it usually does, and within a few minutes she had successfully raised the price of a gallon of gasoline from $3.72 to $3.89.
A barrel of crude, by the way, is now projected to hit $189 within a year. You know, at these prices ...
Having worked in the Gas Station / Convenience Store business (one of many careers) I can tell you the barrel price is about 4-8 weeks from the pump price. The article you link to touches on it. The barrel price is futures, so you need to take delivery time into account.
Not really all that different than corn or wheat futures really.
The Gas business is really competitive though and that is why we see such great changes in price from station to station and hour to hour some days.
Yeah I know. I prefer to think we're paying for the gas that hasn't even been refined yet, tho.
Interesting this week, go across the Hastings Bridge -- if you've got an hour to kill -- and gas was $3.92. Five miles in any direction? $3.78.
I wonder how competitive the business actually is. First of all, around here, there seem to be on three companies... BP, SuperAmerica and Holiday. I would think that if one raises the price, the store across the street would say, "cool!" And raise the price too.
Raising prices is just like you said. Back 10 years ago SA was the "Price raiser" in town. Generally the price rises once every week, no set day despite what internet says.
Then in the day or so after everyone else starts to drop. They do it gain market share. Now I think things have changed a bit since my time at the pumps but not much, today I think Holiday is the local market price raiser.
We would see our "inside" sales drop if we were to high on gas price. Gas was not a big profit center, candy bars were.
filled up today. First time in ages I got a full tank.
$50 + for an itty bitty subaru. And that is a bargain?
Definitely need to get my bike legs back
Call me a cynic, but the price out here in Shoreview jumped from 3.78 to 3.90 (give or take a tenth of a gallon) in the time it took me to go downtown and back today. Somehow it does seem to correlate with the proce of crude....
The only good thing about the high price of gas is that I am exercising more and eating less. That means weight loss!