Just paid nearly $6.00 a gallon for regular. It's been rising steeply the last two weeks here in California. Good thing we've depleted our reserve
Gas went up $.90 in less than two weeks.
One thing that does piss me off about the gas stations is that they're pricing existing inventory at post-hurricane rates. The stuff bought last week didn't magically become $.50 more per gallon while it sat in the ground waiting to be pumped by a dropout Duck fan.
Once again, to maintain their necessary rate of return, the price of gas has to reflect the replacement cost. If I buy gas at $4 a gallon to sell at $4.40 a gallon, I'd get a $.40 profit and the $4 to buy the next gallon. If my replacement cost goes to $5 a gallon, then I need to sell my $4 a gallon of gas at $5.50 to get my 10% profit and have $5 to buy the next gallon. Now, I would show a $1.50 profit, but I need that profit to buy the next gallon. My actual retained cash flow is only the $.50. Plus, the price of $5.50 is the market clearing price, so if you go to the pump you can actually get your gallon of gas. Demanding price controls always results in shortages.
This is stuff that every high school senior should know about, let alone democrat politicians and every MSM alleged reporter.
Just paid nearly $6.00 a gallon for regular. It's been rising steeply the last two weeks here in California. Good thing we've depleted our reserve
Gas went up $.90 in less than two weeks.
One thing that does piss me off about the gas stations is that they're pricing existing inventory at post-hurricane rates. The stuff bought last week didn't magically become $.50 more per gallon while it sat in the ground waiting to be pumped by a dropout Duck fan.
Once again, to maintain their necessary rate of return, the price of gas has to reflect the replacement cost. If I buy gas at $4 a gallon to sell at $4.40 a gallon, I'd get a $.40 profit and the $4 to buy the next gallon. If my replacement cost goes to $5 a gallon, then I need to sell my $4 a gallon of gas at $5.50 to get my 10% profit and have $5 to buy the next gallon. Now, I would show a $1.50 profit, but I need that profit to buy the next gallon. My actual retained cash flow is only the $.50. Plus, the price of $5.50 is the market clearing price, so if you go to the pump you can actually get your gallon of gas. Demanding price controls always results in shortages.
This is stuff that every high school senior should know about, let alone democrat politicians and every MSM alleged reporter.
Good info. Is this because the gas and oil markets are much more volatile? I've been around other consumer products and pricing is determined by what they pay to get the product built or on the shelf. In the case of gas, I have actively noticed that prices always drop slower than they rise even if the correlating change in oil prices occur at the same rate.
I'm not paying attention to what's causing rising prices right now, but the hurricane seems like a bs excuse.
Just paid nearly $6.00 a gallon for regular. It's been rising steeply the last two weeks here in California. Good thing we've depleted our reserve
Gas went up $.90 in less than two weeks.
One thing that does piss me off about the gas stations is that they're pricing existing inventory at post-hurricane rates. The stuff bought last week didn't magically become $.50 more per gallon while it sat in the ground waiting to be pumped by a dropout Duck fan.
Once again, to maintain their necessary rate of return, the price of gas has to reflect the replacement cost. If I buy gas at $4 a gallon to sell at $4.40 a gallon, I'd get a $.40 profit and the $4 to buy the next gallon. If my replacement cost goes to $5 a gallon, then I need to sell my $4 a gallon of gas at $5.50 to get my 10% profit and have $5 to buy the next gallon. Now, I would show a $1.50 profit, but I need that profit to buy the next gallon. My actual retained cash flow is only the $.50. Plus, the price of $5.50 is the market clearing price, so if you go to the pump you can actually get your gallon of gas. Demanding price controls always results in shortages.
This is stuff that every high school senior should know about, let alone democrat politicians and every MSM alleged reporter.
Good info. Is this because the gas and oil markets are much more volatile? I've been around other consumer products and pricing is determined by what they pay to get the product built or on the shelf. In the case of gas, I have actively noticed that prices always drop slower than they rise even if the correlating change in oil prices occur at the same rate.
I'm not paying attention to what's causing rising prices right now, but the hurricane seems like a bs excuse.
Inelasticity of gas demand, which is due to lack of tradeoff options and forced urgency of purchase, also explains a lot of why it differs from consumer products in terms of pricing.
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I'm not paying attention to what's causing rising prices right now, but the hurricane seems like a bs excuse.
https://video.foxbusiness.com/v/6313021393112#sp=show-clips