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Gas prices
July 16, 2008 - 2:56pm — BPARS
We have all watched the price of gas continue to climb and cause many changes in our way of life. We have all grumbled and complained. I personally don't like it and am watching how much I drive. This is the way it is for now and we have to live with it. What I don't like is how the local gas stations deal with it. I don't have a problem with a station raising their price if their tanker load comes in higher; but I don't understand why when one station raises, they all do. A week or so ago, the price of oil went up about $10-$12 over a few days -- the price of gas went up all over town. The last couple days the price of oil has dropped about $10 -- the price of gas hasn't changed. Can anyone explain how this works???????? |
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Good question. There is...
Back to page topGood question. There is this characteristic of pricing called stickiness -- kind of like the sap that fell onto my rain jacket -- easy to apply but very difficult to remove. Prices go up easier than they go down; that is where stickiness applies. It's probably a simple fact of human nature: maximize mine is more compelling than yours.
I needed a fill-up a week ago and noticed that the Freedom and BP stations on "Times Square" had already gone to 4.09.9; Holiday was at 3.99.9. I made one stop and headed to Holiday. It was up to the "market price" by the time I got there ten minutes later. To me, the amazing thing isn't how slowly prices come down, it's how evenly they go up. Imagine if all the grocery stores in Minnesota were moving their milk prices up and down in perfect unison. At some point, the Attorney General would be charging them with a price fixing conspiracy. In the American gasocracy, one industry seems exempt.
Because I am stupidly living the pre-Iraq war lifestyle, I found that my gas expenses for the last month were over $450. And that's with vehicles that get 30 miles per gallon. Go figure.
Up like a rocket, down like...
Back to page topUp like a rocket, down like a feather.
Nothing has fundamentally changed with gas pricing (or any other end product of a volatile commodity). You simply notice it more with gasoline since it is uncommonly expensive as of late.
Gas stations do not make much on a gallon of gas, especially after a credit card is swiped. They are a business after all, so keeping prices the same for a few days after a drop is beneficial to their bottom line.
If there is any price fixing going on, it is not at the gas station level of the oil industry. What you are seeing, relating to price fluctuations between gas stations, is what we capitalists like to call free market competition.
Just came back from out of...
Back to page topJust came back from out of town. Was surprised? to see gas at $4.09 here. Bemidji was at $3.89 and Detroit Lakes was at $3.80 (as of yesterday). There was one gas station outside of Bemidji, on Hwy 71, that was at $4.69...not a long line waiting there!
I was told by an owner of a...
Back to page topI was told by an owner of a local service station that the prices are dictated by a locally owned oil company. What gets me tho is that at the gas stations their tanks are filled at one price and a few days later that same gas goes up according to the predictions on what a barrel of oil is going up. I don't see how a gallon of gas can cost sometimes 18 to 20 cents more to have it delivered to the Falls and it Orr it's the 18 -20 cents less. We're at the end of the line and they got us with no place else to go. What also gets me is how it goes up just before the week-end when all the tourists are supposedly coming knowing they don't want to pay the prices for Canadian gas.