Gas price fixing

[SpaceSquad]

Look at the difference between Ottawa and Montreal...despite being 1.5 hrs away from each other. Provincial taxes factor in, though...

 

[Canadian Tech]

I too live in Ontario Canada and I'm not sure about price fixing but it is odd that the cost per barrel of oil is down and the cost per litre of gas has gone up. I do know that the cost of gas always goes up just before summer or a long weekend. Today I just filled up at a cost of $1.17 a litre which is approximately 4 litres per gallon for a total of $4.68 a gallon. Either way there isn't anything we can do about it other then drive less.

 

[Markverhyden]

Yep, state and local taxes can make a huge difference. Used to go down to Groton, CT to Electric Boat on a regular basis. Gas prices there were some 30 cents/gal higher than in Taxachusetts.

 

[gadgetfixup]

I used to believe that information about gas stations in the States only making 5-15 cents a gallon on gas until we had 3 stations engage in a price war a couple years ago. In less than an hour they hammer each other down over 50 cents a gallon until they hit what I believe was cost. They had cars lined up for over a mile and I know they weren't selling all their fuel for a lost, especially pumping that much fuel an hour. By the end of the day all 3 stations had empty tanks. Another reason I suspect it's much more than 5-15 cents a gallon is because around our area we don't have any ugly gas stations left. These owners are making so much money they don't know how to spend it all. One station that as old and nasty 20 years ago, has been rebuilt and expanded 3 times and the last figure was at over 1.5 million for the last upgrade. All the stations in our area are either brand new or top condition. With everyone using less fuel these guys have a ton more money to invest? Yeah that's not how it works. I estimate they are banking about 40-50 cents a gallon and what they sell on the inside is just icing on the cake and not their money maker as they claim.

 

[brandonkick]

I used to believe that information about gas stations in the States only making 5-15 cents a gallon on gas until we had 3 stations engage in a price war a couple years ago. In less than an hour they hammer each other down over 50 cents a gallon until they hit what I believe was cost. They had cars lined up for over a mile and I know they weren't selling all their fuel for a lost, especially pumping that much fuel an hour. By the end of the day all 3 stations had empty tanks. Another reason I suspect it's much more than 5-15 cents a gallon is because around our area we don't have any ugly gas stations left. These owners are making so much money they don't know how to spend it all. One station that as old and nasty 20 years ago, has been rebuilt and expanded 3 times and the last figure was at over 1.5 million for the last upgrade. All the stations in our area are either brand new or top condition. With everyone using less fuel these guys have a ton more money to invest? Yeah that's not how it works. I estimate they are banking about 40-50 cents a gallon and what they sell on the inside is just icing on the cake and not their money maker as they claim.

5-15 cents per gallon isn't actually too bad if you consider the volume sold. I live in a VERY small town with not that much traffic and I can easily imagine them selling 1500-2000 gallons of gas per day. 2000 gallons a day @ 15c per gallon works out to over 100K per year in gas profit. I would bet that as a gas station owner, it doesn't do you any good to start a price war. When people do go through price wars, you can imagine that even after that crazy big drop they are at least breaking even, but most likely still making money on every gallon sold.

I'd be willing to bet that most gas stations make exponentially more money on the stuff they sell in side then what they make off of gas.
For example, most gas stations sell bottled water for at least $1 per bottle. You can buy 40 bottles of water at samsclub for $4 which works out to a whole 10 cents per bottle. I can imagine most gas stations can get it for at least this price, if not cheaper. The larger gas station chains can probably get it much cheaper. Let's just go with 10 cents per bottle for arguments sake with a sales price of $1. That's 90 cents of gross profit for each bottle sold, an insane margin. Most other drinks in that cooler are probably in a very similar realm. I know around here we have a gas station chain called sheetz, and I can tell you this... they make money hand over fist. It's the convenience, their open 24 hours a day and if you want to pick up some eggs and hamburger buns at 3 AM you can, but you'll pay $3 for that dozen of eggs and $2 for that pack of hamburger buns. $5 for what you could have got at a regular supermarket for less than $3. That "convince" tax can add up realllll fast.

 

[Markverhyden]

My ex worked at Exxon-Mobil and managed a bunch of stations so I obtained some insight on this. At what I call face value, kind of like list price, stations do not make much off of gasoline sales. Back then, late 80's, they made something like 3 cents a gallon, face value, but that was when gas was around $1/gallon. So that is a 3% margin. But there are also lots of games going on we do not see. Like volume contracts. And it depends on where they buy the gas. And that depends on where the wholesaler buys the gas. Remember that gasoline is a commodity so margins are going to be low.

The reason there are so few independents these days is they cannot compete, price wise, with the chains. In my area there is a local chain, Al Prime. Part of their business model is to go to local independents that have a repair business and has pumps. They take over the pumps and the original owner keeps the repair business. The sites that they own directly are all convenience stores. As @brandonkick mentioned they make a killing on those sales and this enables them to do well. Take fountain drinks. The most expensive part of that sale is the cup, then comes the lid, straw and ice. The beverage cost itself is maybe 5% of the total price.

 

[frase]

We are going into a long weekend, what do ya know - fuel prices increase. Wish I could do that whenever MS release a new OS

 

[Galdorf]

No price wars here all gas prices are EXACTLY the same there are about 5 different companies even the independent ones in city have same prices they use to be cheaper but i have a feeling they made an agreement to post same prices.