Maybe it's time to Nationalize Oil (China, Mexico: buy, income, upkeep)

[K-Luv]

Originally Posted by Coaster

look at prices on one block or in one small town and see collusion and coercion. I see the market in action -- sure if some new station tries to undercut the established stations, the old-timers will respond. Would you expect them not to? And over time the newcomer and the established places will either reach a price equilibrium or someone will be driven out of business and an equilibrium will be reached anyway.

I'm sorry, but it's basic economics.

There is a state mandate for the lowest possible price per gallon that a gas station can sell for. Of course they can go over that amount by as much as they please, but if they go below it, they risk a fine. Most gas stations barely break even and the ones that do turn a profit are the 'mega' store type or ones that are located right off the highway (and 5 to 10 cents more a gallon).

[K-Luv]

Originally Posted by Coaster

So are you saying that Shell, Exxon, and Irving all get their gasoline from the same distributor? That's the only way one source could control all the prices, and the last time I checked, that just wasn't so.

No, they have their hands into their own corner of the supply. Just like the airline industry.

By the way, Citgo is a Venezuelan company, and they helped Mainers with either free heating oil or a low cost plan for it. Gotta love it.

[Acadianlion]

I think the conspiracy theorists regarding the price of a gallon of gasoline are not completely on the mark. It is surprising that there isn't a small store owner posting here, so that the actual process of buying and paying for gasoline can be presented, rather than just speculation about what causes gas prices to rise and fall.

Here in this part of Maine, I believe that ALL the gasoline sold comes from the Irving Terminal in Searsport.

Yesterday, I drove from the Ellsworth area to Belfast. I had to fill "The Old Gray Mare" with regular gas, and stopped at the little store just before the junction of Route 3 and 1 outside of Searsport. As it turns out, gas was four cents per gallon less there than at either the much larger Irving or Mobil branded stations in Searsport.

In Ellsworth there are two stations that are always less expensive than either Irving or Mobil. They are both independently owned, and one gets its gas from independent suppliers....mostly J&S Oil, and the other is a convenience store that is actually down Route 3 in Trenton. Then the Trenton General Store is priced with its "competition", and those are Exxon pumps. The difference is sometimes five or six cents per gallon, but most often, it is less than that.

Where does that gasoline come from? Well, since it ALL arrives by truck, I am going to assume that it all comes from the nearest shipping port, and that would be Searsport. And before that, I am sure it all came from a larger terminal, probably Boston. The cost of running a diesel engine powered tanker truck is the same for any one gallon of gasoline, and I doubt that Mobil dealers or Citgo dealers or unbranded dealers have any magic method of buying and paying for their gasoline. I'll bet that the convenience store operator who has unbranded pumps charges just exactly as much as he possibly can charge for a gallon of gasoline, consurate with the price of a gallon at the Exxon station one mile, ten miles, or fifteen miles down the road, and if the guy who owns the Exxon station wants to "buy" customers for his donut machine by selling gas at ten cents a gallon less to get them into the door, he will....as long as he can stay in business.

I think it is also pretty important to remember how much of the dollar price of a gallon of gasoline is state and federal taxes. There has been some talk on this thread about buying a diesel or diesel hybrid engined car. That really needs to be examined closely, since diesel fuel in Maine is taxed so high that in order for a diesel engined anything to be worth the dollar cost, the number of miles driven must be really exceptionally high. I LOVE diesels, but owning a diesel is generally going to be more expensive than another car of the same type that has a gasoline engine. If diesel fuel is ten cents per gallon more than regular gasoline, the number of miles at high mile per gallon rates is much higher than most people drive over the life of their vehicle ownership.

[kellysmith]

Bydand,
I think what you and I see is the case here in the County. Seeing is believing and I see price collusion throughout the county.

[flycessna]

I had an aquaintance once that owned a gas station/store.......He got into the business fairly young and ultimately loss everything because he was involved in something that got him into trouble with the feds. He was buying the gas from his distributer...and selling it for less and not paying the distributer......anyways whatever he was doing with the money I do not know......but he used to tell me every day how he would get threatening calls from other gas stations where they would call him up and yell at him telling him he's cutting their throats ect.........i've seen the same thing occure with the few Lobster shacks in the area too. And I am sure it's commen. To the naked eye it only looked as though he was selling his gas 10-12 cents cheaper then the competition.....and he tons of business because of it....

***I've since interacted with the new owner of the station and he was the one the filled me in on how what was going on and how that previous owner was able to sell his gas so cheap.....he also stated that normally distributers will NOT deliver any more fuel until your last bill has been paid.

IMO......I do not think the gas stations make all that much money on fuel......unless you have something else to support the business like a store/ car shop ect.

But I bet they do make the most money when prices are fluctuating back and forth like they have been for the last several years......It's easier to add 5 10 cents here and there......I try and fill up at BJ's but time isn't always on my side

[7th generation]

Originally Posted by Acadianlion

I think the conspiracy theorists regarding the price of a gallon of gasoline are not completely on the mark. It is surprising that there isn't a small store owner posting here, so that the actual process of buying and paying for gasoline can be presented, rather than just speculation about what causes gas prices to rise and fall.

We are in the business of making a profit, whether it's selling a gallon of gas or a cup of joe. Every time the price of fuel goes up or down, we receive a call from the supplier. It's a crap shoot at best. I received a load on the 23rd of February and paid $3.14 per gallon. Six miles down the road, a chain store was selling a gallon for $3.17.
Last year I lost money on two loads, to the tune of $5,000.
Anyone that believes there is collusion between dealers is mistaken.

[knightjohannes]

I was speaking to one of the "Mom and Pop" shops owners over superbowl weekend about how she prices gas. She's very up front about it. She gets a load of gas at $x.xx and sells it for that much plus whatever she needs for expenses and a profit. She remains at the price until the load is 'gone' (yes, there's always some in the tanks that remains and isn't completely priced at the same it was purchased). When she gets the new load of gas, she changes the price accordingly. That is how she does it. She even will tell customers who ask what she paid for the gas.


So, she isn't subject to the whim of the nearby Blue Canoe or whatever. There isn't one for miles. She's also unbranded.

That's what one store does.

As far as my local corner store that has pumps, well, somebody smacked one with a truck bringing down their last working pump. They stopped selling a couple weeks ago and I'm not sure if they're going to add the pumps back.

[Coaster]

Originally Posted by K-Luv

There is a state mandate for the lowest possible price per gallon that a gas station can sell for. Of course they can go over that amount by as much as they please, but if they go below it, they risk a fine. Most gas stations barely break even and the ones that do turn a profit are the 'mega' store type or ones that are located right off the highway (and 5 to 10 cents more a gallon).

Now this is news to me. I know the Maine Milk Commission sets a floor price for milk, or used to, but I have never heard that gasoline has a similar rule. Nor have I seen a single news story or legislative bill concerning the floor price for gasoline. Got a link?

[Maineah]

Gas dealers are paying for the next load with what they currently have in the ground. That's why they have to stay on top of any rise in the price of crude. It's also why they don't lower the price quite so quickly if oil starts to drop.

[Dwatted Wabbit]

Nationalizing anything is an idiot's response to any problem.

If you think it's bad now, wait until a bunch of invisible unaccountable career bureaucrats are in charge.

Be careful what you wish for. Nationalizing is a pure stupid idea.