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  • Re: Gas Prices

    I have a curiosity question. When crude goes down isn't there still gas left in the underground tanks at the gas station? Gas that was purchased by the independent station owner at a previously higher price?

    I suppose the reverse is true, too. When crude goes up, the station owners still have gas purchased at the lower price.

    Aren't the station owners impacted by crude prices as much as the customers? It seems to me that the oil companies are the only ones making money and that the station owners are affected as much, if not more, as their customers.

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    • Re: Gas Prices

      Originally posted by tutusue View Post
      I have a curiosity question. When crude goes down isn't there still gas left in the underground tanks at the gas station? Gas that was purchased by the independent station owner at a previously higher price?

      I suppose the reverse is true, too. When crude goes up, the station owners still have gas purchased at the lower price.
      .
      More truth than poetry in what you say Tutu. I don't know if you are familiar with the LIFO (Last In First Out), FIFO (First In First Out) accounting principles. At the service stations they tend to use LIFO principles when crude goes up (the last gas delivery at the higher price is what they charge for what is remaining in the underground tank). When crude goes down, they use FIFO principles (the last remaining amount in the underground tank at the higher price is what is charged for the whole tank even though recent deliveries have been at the lower price).

      This concept of mixing LIFO/FIFO accounting is not allowed when filling out IRS tax returns. It is a big NO-NO. You are required to use one or the other and stick with it during your accounting period.

      Tutu, welcome to the world of unregulated Capitalism.

      Repeal the tax breaks for the oil industry! Republicans and some Democrats are opposed to that.
      Peace, Love, and Local Grindz

      People who form FIRM opinions with so little knowledge only pretend to be open-minded. They select their facts like food from a buffet. David R. Dow

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      • Re: Gas Prices

        Originally posted by tutusue View Post
        Aren't the station owners impacted by crude prices as much as the customers? It seems to me that the oil companies are the only ones making money and that the station owners are affected as much, if not more, as their customers.
        The answer is no, they aren't affected. Service stations add on a certain percentage or cents per gallon to all their wholesale gasoline purchases. Their profit remains the same or goes up when the price of crude changes.
        Peace, Love, and Local Grindz

        People who form FIRM opinions with so little knowledge only pretend to be open-minded. They select their facts like food from a buffet. David R. Dow

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        • Re: Gas Prices

          Thx for the info, Matapule. I have an accountant for a reason!

          Comment


          • Re: Gas Prices

            The Headline in USA Today: Oil drops 15% in a week.

            Well I guess that means we should see a 50+ cents a gallon reduction in gasoline prices tomorrow at the pump! I'm waiting.......waiting.......waiting. Drums fingers on table. Lah-de-dah-de-dah-dah-dah. Heeeeello oil companies, anyone at home? I hear crickets!

            End the tax breaks for the oil industry!
            Peace, Love, and Local Grindz

            People who form FIRM opinions with so little knowledge only pretend to be open-minded. They select their facts like food from a buffet. David R. Dow

            Comment


            • Re: Gas Prices

              Originally posted by matapule View Post
              The Headline in USA Today: Oil drops 15% in a week.

              Well I guess that means we should see a 50+ cents a gallon reduction in gasoline prices tomorrow at the pump! I'm waiting.......waiting.......waiting. Drums fingers on table. Lah-de-dah-de-dah-dah-dah. Heeeeello oil companies, anyone at home? I hear crickets!

              End the tax breaks for the oil industry!

              Any minute now, for sure.
              Grab some goggles and answer to nobody.

              Comment


              • Re: Gas Prices

                Originally posted by matapule View Post
                The answer is no, they aren't affected. Service stations add on a certain percentage or cents per gallon to all their wholesale gasoline purchases. Their profit remains the same or goes up when the price of crude changes.
                This is only partially true. When gas prices go up, customers become more price sensitive. So when you have gas stations clustered together at a local intersection, it becomes a game of bluff on which station raises their price first. Even if the difference is a penny, the customer will go there. So it actually squeezes their profit margin as they take on higher wholesale prices and try to keep the retail price the same as long as they can, hoping to make it up with sales of goods in the convenience mart. So when oil prices do go down, they then hang on to the high prices as long as possible to try to make the most out of it. Of course, this scenario doesn't apply to all stations, especially for ones with no competition for blocks around.

                I don't know if you use Costco gas but if you do, ever notice when gas prices spike, the price difference between Costco and outside stations narrow significantly. This tends to support the idea that outside stations are trying to hold onto a given price as long as possible, eating into their margins. Costco, on the other hand, probably sells gas at break even, it brings in the membership fees and shoppers.

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                • Re: Gas Prices

                  Originally posted by joshuatree View Post
                  I don't know if you use Costco gas
                  I live in Cabo San Lucas, Mexico. We have Costco down the street, but they are not allowed to sell gas anywhere in Mexico. All the oil industry and service stations are owned by PEMEX, the nationalized oil company. I am currently paying $2.80 per gallon for 87 octane. My hybrid SUV gets an average of 35 mpg. I'm not complaing here.

                  Costco, on the other hand, probably sells gas at break even, it brings in the membership fees and shoppers.
                  Totally agree. Like their hotdogs (same price in Mexico as US) gasoline is a loss leader.
                  Peace, Love, and Local Grindz

                  People who form FIRM opinions with so little knowledge only pretend to be open-minded. They select their facts like food from a buffet. David R. Dow

                  Comment


                  • Re: Gas Prices

                    Hilo is at $4.57 per gallon. With my Kamaaina card I was able to slash 15-cents off per gallon, every Sunday. Wow, who would have ever thought about getting so giddy at $4.42 per gallon!
                    Life is what you make of it...so please read the instructions carefully.

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                    • Re: Gas Prices

                      Originally posted by craigwatanabe View Post
                      Who would have ever thought about getting so giddy at $4.42 per gallon!
                      Some say it's a main reason for higher prices, pretty soon you may be cheering $5 per. Support your National scam!
                      https://www.facebook.com/Bobby-Ingan...5875444640256/

                      Comment


                      • Re: Gas Prices

                        Here in Jokelahoma, it is just now hitting 3.80 a gallon and I am absolutely shocked to read this thread and see that the islands are only at 4. I would have thought for sure it would be in the 5 or 5 and a half range.
                        If anyone on Oahu is NOT happy , feel free to trade places with me.

                        Comment


                        • Re: Gas Prices

                          Hana, Maui saw $6 something recently, and it probably hasn't gone down much, if at all.
                          https://www.facebook.com/Bobby-Ingan...5875444640256/

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                          • Re: Gas Prices

                            Originally posted by memorylane View Post
                            Here in Jokelahoma, it is just now hitting 3.80 a gallon and I am absolutely shocked to read this thread and see that the islands are only at 4. I would have thought for sure it would be in the 5 or 5 and a half range.
                            In Californicate it is around $4.50 per. Haven't seen any price reductions since crude lost value.

                            I like your sense of humor about your home State.

                            Repeal the tax breaks for the oil industry.
                            Peace, Love, and Local Grindz

                            People who form FIRM opinions with so little knowledge only pretend to be open-minded. They select their facts like food from a buffet. David R. Dow

                            Comment


                            • Re: Gas Prices

                              Over the last couple of days, from the gas station I pass daily, I've seen prices go down a little (from 4.47 to 4.42, I think). This was expected, and I see it going down for a while longer, before going up and up again. But over the long haul, gas prices will keep going up. One step lower, two steps higher.

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                              • Re: Gas Prices

                                The last time I filled up, 82 was at 4.39. I'm waiting for that price before I fill up again! I'll check out Lex Brodie's tomorrow.

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