Re: Price Gougeing



I see no great mystery here.
- Gas is sometimes sold as a loss leader, particularly by stations attached to convenience stores, as the profit margins for convenience stores are relatively generous.
- A gas station owner with some cash to burn might well embark on a little price war, particularly when prices peak, to put some pressure on competitors.
- During a surge in gas prices, it may be profitable in the long run to sell gas at a loss in order to build customer loyalty.
These all boil down to the simple principle that it sometimes makes economic sense to sell a product at a loss for a short period. Happens all the time, and a "crisis" is an ideal time to do it, since you get free advertising from media attention and word of mouth.
--
Michael Wojcik snipped-for-privacy@microfocus.com

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writes:

Well, this station doesn't have a "Mobil on the Run", just a cash office that sells smokes, soda and gum.

Yesh, I've seen that at a nickel. But it being all the Mobils in this area, I wonder if Mobil home office is doing some subsidy.

Well, with all the small margins people have been quoting that gas stations have, that's just too big a loss for me to accept this as a reason.

See above comment.

This also leads me to think Mobil Corp may be behind the price hold of the Mobil stations. Just too many of them under different management to not be organized on a larger scale.
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Yup, appears to be coming from home office. Found a press release that confirms it.
http://tinyurl.com/agmxa
What I found to be the most relevant part of the release (in regards to this thread)...
" ExxonMobil is making branded fuel available to its independent retailers and distributors at wholesale prices below the spot market and NYMEX gasoline prices. The vast majority of Exxon and Mobil service stations are operated by individual dealers and distributors who purchase their fuel products from ExxonMobil and set their own retail prices.
"
It appears that many (at least here in my area) are going along with ExxonMobil's wishes.
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