Premium gas hits $5.02 a gallon in Toronto

Oops! Forgot to mention; The world price for crude is what it was 2 weeks ago, about $69/barrel while gas then was $3.98/gal. I wonder where that extra dollar came from??

"Bittorrents are REFUNDS for all the BAD movie products Hollywood never gave us refunds for in the past"

I think it's closer to $4.69/USG in $US. ((1.49/l x 3.78l/USG) / 1.2) or if we still sold gas by the gallon (imperial) it would be $6.76 CDN. Now that's the scary part.

The issue is twofold...You've got to first get that oil to the refinery. My understanding is that a number of refineries are still shut down. Incidentally, the US refining capacity was already operating at near

100%. You lose 1 or 2 refineries and it can cause pretty large price spikes and supply disruptions. You've also got to get the gasoline after it's refined to the markets that need it. The shipping terminals, roads, and some pipelines were negatively impacted by the storm. Have gasoline sitting in vast tanks at the refinery isn't going to help the supply on the street so it won't help prices until it can be distributed. My understanding is that approximately 10% of US refining capacity was affected. That's going to cause a much larger than 10% baloon in prices until the supply and refining system is back online and can make up the difference. For now, some oil companies are importing refined gas which is substantially more expensive than importing crude and refining it locally.

Cheers,

We all know how increased scarcity drives up prices, but the companies have already paid a certain price for what they have "in the pipe" or in storage and they are making a huge profit on these increases. They used to tell us that when crude prices fell, it took 2-3 months for those to "trickle down" to the pumps. So why do gas prices rise a DAY after crude prices do?'

-Rich

Why don't you write a letter to the CEO of each major refiner and ask them? I don't set policy at refineries or at the major oil companies. I'm just telling you how it is. Let me know if anyone responds to your letters.

Cheers,

Rich wrote

The price at the pump relates directly to the cost of the replacement fuel. NOT the cost of what's IN the underground tanks. Which in turn reflects the refinery price to the Distributor for the next deliveries... usually a day or so lag/lead there

That is why it goes up immediately and isnt related to the presence of the tanker truck.

As far as the decline, do you really pay attention? Where I live, Speedway/Marathon sells the bulk of the gas... And they refine their own!

So I see the decline work the same. When (WTI) crude goes down, so does the gas price... there are exceptions but that's a matter for local competition pressures.

People who want to speculate on fuel prices or who want to take advantage of short-term supply shocks might behave that way, but someone who just wants to earn their honest living bases their prices on their actual cost, not what they THINK prices will be tomorrow.

If you have the urge to speculate on fuel prices, you should hang up your dirty overalls and buy/sell gas and oil futures. Since you're such an expert on the subject and on commodity prices, you should have no trouble at all making a handsome profit for yourself. Do let me know how that works out for ya...

You have to be able to separate local, brief "price wars" from the normal price of fuel. They are not related.

-Rich

I'm just telling you how it's done.

If you opened a widget store and you already had a stock of widgets.. you would sell them based on what you paid for them.. but you are about to run out of stock so you order more, only to find the wholesale price has increased... now you MIGHT wait until you get that stock in to raise the price.. but sooner or later, you're going to realize it really doesnt matter.

As soon as you know YOUR cost for shelf replacement.. you will just mark them accordingly.

And you sure arent going to sell your old stock at the old price with the new stock higher!

Ritz wrote in news:ojZSe.45522$ snipped-for-privacy@fe10.lga:

I suggest you try some prep H

And it's not what they THINK the price is gonna be... it's what the distributor tells them it is at that time!

I'll take that as a concession.

So let's use your example....

Let's say I buy 10,000 gallons of gas today at US$1. So I add a 10% margin to that and charge customers US$1.10. Several days later, Hugo Chavez decides to stop selling oil to the US and the spot price of gas skyrockets. So out of curiosity, I call my distributor and ask what "my price" is on that day. He says "Well, if you buy it right now, it's US$1.50. I don't really need any gas for another 4 days, but according to you, I should start immediately charging customers US$1.50 + 10% = US$1.65. Wow, so now I'm making 65 cents on the same fuel I paid a dollar for. 4 days go by and the markets stabilise, Chavez falls off his horse and is killed, etc....and it's time to order gas. The price is back down to US$1.10. So I order 10,000 gallons and change the price to US$1.21 (1.10 + 10%). Personally, I'd rather just make my guaranteed

10% margin on every gallon I sell rather than gouge my customers based on pricing information mid-week that has zero bearing on my cost. But, hey, if that's something that YOU think you'd like to do, you can set up your own station around the corner and show us all how it's done.

Customers are a valuable asset and they're not stupid. If you "steal" from them, they'll eventually catch on and do business with a more honest establishment.

Cheers,