Gas went up almost 60 cents a gallon in 2 days here

Discussion in 'Community Forum' started by Strutter, Aug 2, 2012.

  1. High Rack

    High Rack 12 pointer

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    in the hills
    The unrest and continued possibility of more war in the middle east has had the desired effect on the oil futures market along with current inventories and the everyday rise and fall of the dolla against all other currencies which has basic control over what you pay at the pump.

    This current jump is related to the Syrian hiccup......Now that O has given the CIA a golden ticket, add the fact the Russia has now sent a couple of loaded ships full of Russian marines to protect it's Syrian base, it gets people nervous, and the Saudis get a better payday, the longs get fat and the shorts get crushed..........we are the shorts.
     
  2. EKUgrad

    EKUgrad 10 pointer

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    Lexington
    Yep. What a mess.
     
  3. B Hicks

    B Hicks 12 pointer

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    Lancaster, KY
    I was in Frankfort yesterday and stopped and paid 3.69 close to the interstate. I was going to Owenton to pick up a Craigslist bargain, and before I got 1 mile from the interstate, gas was 3.39 in Frankfort closer to downtown....
     
  4. raktrakr

    raktrakr Cyber-Hunter

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    central ky
    I figured it was because of the drought and corn prices, gotta pay for that 10% ethynol
     
  5. High Rack

    High Rack 12 pointer

    5,825
    3,219
    Dec 21, 2009
    in the hills
    That will play a bigger role in the coming months once the "announced" numbers get in.........One thing about the oil price, they about got a lock on what causes the rise.....Anything.
     
  6. barney

    barney 12 pointer

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    Ta heck with gas, what are we gonna do about the the price of Doritos skyrocketing???
     
  7. pentail

    pentail Bacon Staff Member

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    Savoring the smoke
    or bacon???????
     
  8. barney

    barney 12 pointer

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    Don't worry about the bacon, I know a guy that keeps a stockpile of the stuff.
     
  9. FOWLER2671

    FOWLER2671 12 pointer

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    Evicted from Aintry'
    It always pisses me off when I go to Tn and buy gas for as much as fifty cents a gallon cheaper when they have MORE taxes on gas.

    I paid $2.89 a gallon in Union City only to turn around and pay $3.39 in Paducah two days later about a month ago.
     
  10. Pay no attention to this! Pentail has been brain washed by the government and it's being passed on to us....
     
  11. Our corporation has stores in both markets you just mentioned - Union City and Paducah - as well as multiple other locations in northwest TN and western Kentucky. Gas is ALWAYS cheaper in the TN markets, because unless I'm wrong or haven't been paying attention all these years, TN actually has around 8-9 cents less gasoline tax than KY.
     
  12. ky_bull

    ky_bull 12 pointer

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    Jul 3, 2005
    Washington County
    I've seen it be 20-30 cents difference 10 miles apart.
     
  13. I believe I have given my take before on this board about the reasoning for huges retail spikes in gas, and the reasons you occasionally have radical differences in prices that sometimes occur then rapidly disappear and come back in line over a 1-2 day period, where you have gas with 10, 20 or even 30 cent differences in the same town. There is more than one variable that determines most stations' retail price, relative to the current cost of gas/diesel.

    Gas futures and thus the wholesale cost of gas/diesel are changing hour to hour and even minute to minute. So, unless every station in town is buying exactly the same number of gallons at the exact same time, from the same wholesaler and paying the wholesaler exactly the same price delivered and selling exactly the same number of gallons between said delivery, then nobody's gas cost the same. To further complicate matters, my station and the other big boys are receiving multiple deliveries daily. I mean, we don't run the tank empty, fill it back up for one price, wait til it is dry, then fill it again. Nope, what is in the ground is a mix of multiple wholesale costs. About the only logical way to sell your gas when you receive multiple deliveries is to base your retail price solely on the current replacement price for gas. That is one reason why we buy several small loads daily. I mean, let's say our tank holds 8000 gallons of regular 87 octane and we buy 8000 gallons and fill the tank up at 8 am. What happens when gas futures drop 8-10 cents by noon on some report that current gas inventories are 15% greater than anticipated? I'll tell you, our largest competitor bought 2000 gallons at 8 am, then 2000 more at 10 am at a lower cost, then maybe 3000 or 4000 more gallons at noon for an even lower cost. Now, there average price paid is still more than the current cost, but less than what we paid. So when they lower the price of gas, it won't be by as much as what Joe consumer thinks it should be, because their average cost per gallon is still MORE than the current wholesale price. They are still better off than my store wound be, since I bought it all that morning at the highest price. So when you gripe that it never seems to decrease as fast as it increases, relative to the wholesale price, you are correct. It doesn't and hopefully that helps explain why a little, even if it is of no comfort to you.

    So, what that all means is that when the wholesale cost of gas is dropping, we are losing money and whomever has the lowest cost mix in the ground is losing the least and we will continue to lose until the cost stabilizes somewhat where we can decrease the average cost of our gas/diesel mix in the tanks -- usually a day or two. Conversely, when wholesale gas jumps 30 or 40 cents, like it has the past several days, we get a chance to recoup some or all that we lost during the drop and so reactionary pricing during the rise is definitely quicker than during the fall. It pizzes everybody off I know, but the goal of any corporation is to provide a ROI for its owners. I guess if you consider trying to just turn a little profit gouging people, then maybe you need to scream at all the "for profit" businesses you frequent. It's no different. I believe turning a profit is what we are aiming for in Capitalism.

    Now, to get to the reason for the temporary spreads of around 30 cents, usually lasting no more than 24 hours, before stabilizing with most of the contenders together on their price. You have some stations that march to their own beat and don't follow the same protocol as us players do. I'm talking about your little mom and pop stations or the ones that have been bought up by the Indians. They typically buy a load of gas for a certain price, tack on a nominal profit and that is that till the tank is nearly gone, then they buy another and adjust prices accordingly. Also, smaller gas retail corporations like mine react more quickly to wholesale cost than say Murphy's, who you know pays less for their gas than we do, strictly due to the sheer number of gallons they purchase. When you have over 1100 retail units, like Murphy's, versus less than 20, like my company, you know who's catching a break and rightly so. They can also afford to hold out longer before jacking up prices when wholesale gas cost spikes. Most times, when we are needing a retail increase to offset our losses, they won't make the first move. We or one of the other small local chains will make the first move and all us small guys will move together. Murphy's however is famous for staying put an extra day and then we all wind up going back down and trying again tomorrow. The market was all jacked up in Murray a couple days ago, with prices one particular day this past week varying between $3.27 and $3.55. The next day most all the players were at $3.54.

    I apologize for that long winded post, but man, I have heard us called crooks and cheats so much this week that I thought I'd try to explain a little of what is going on on our end. If we had to rely on gasoline profits, the doors would have been closed years ago. Nope, the gas is simply a driver to get you to the store and hopefully you will come in and buy a cold soda water or a carton of Newports with your baby mama's check or a bag of Funyons or some other item with a known, somewhat set in stone margin. If any of us had $50,000+ in gas and diesel in the ground that was being pumped into somebody else's tank and leaving the lot, never to return, we would be all over it like white on rice. It isn't a conspiracy, I promise. It's just Capitalism.
     
  14. Luckybuck

    Luckybuck 10 pointer

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    May 29, 2006
    N. KY
    Most people have been or are on vacation right now so they do not care if the prices go up. Tourism got its cut, now its back to gouging us at the pumps since school is right around the corner.
     
  15. EKUgrad

    EKUgrad 10 pointer

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    Nov 9, 2004
    Lexington
    Excellent post, drake.
     

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