At 07:26 AM 5/30/01 -0400 Gary Nunn wrote:
>1. Consistently, gas prices go up $0.20 to $0.30 per gallon right before the
>weekend, usually on Thursday. Then they slowly fall by a few cents a day
>until the next weekend. This trend skipped a weekend right before Memorial
>Day, but on the Thursday evening before Memorial Day weekend, the prices
>went up here locally from $1.53 to $1.89 a gallon, and now the weekend is
>over, they have fallen to about $1.69 a gallon.
Amazing, demand goes up, supply remains constant - prices go up! You'd
think that Adam Smith was born yesterday.
The same principle applies to a college graduate. If you get one offer,
you usually take it. If you get multiple offers, most people parlay them
into the highest possible compensation package. Supply and Demand.
>2. Gas prices at the same franchises within 5 miles of each other can vary
>by as much as $0.35 per gallon. If they are the same franchise (BP,
>Marathon, Speedway) then I bet that they are getting gas from the same
>supply truck. I could understand an independent station charging a higher
>price (due to lack of bulk purchasing) but the same franchise stations
>within a few miles of each other?
Yes.
First of all, you have no idea if the station is a true franchisee or is
simply an independant operator leasing the brand name.
Secondly, you don't know what the internal structure of the company is.
Integrated oil companies typically have franchised locations over a large
area. Those locations have to be grouped *somehow*, and that may well
entail internal divisions between stations that are mere miles apart. For
example, if a company has 20 stations in downtown San Francisco, and a
single truck can only supply 10 stations, two relatively nearby stations
may very well have different suppliers.
Thirdly, integrated oil companies typically do not give "breaks" to its
subsidiaries. In other words, the refining division of the company sets
its price for refined oil by selling that oil on the open market, and then
sells the refined oil at that price to the retail stations.
Occasionally, the retailing division will buy its gasoline from a refiner
*other* than the refining division of their own company.
Retail divisions, *do*, however, offer a number of different incentives to
their stores. For example, in Liverpool N.Y., where I used to live, there
was one Sunoco Station that always had a price below anybody else for miles
around. Why? Well, that store had an absolutely terrible location on a
particularly forlorn corner of a very busy intersection. Getting in and
out was very difficult. In order to stay in business, he had to give
consumers an incentive to put in the extra effort of navigating traffic
into the store, so he undercut the competition. He made up the difference
of the below-market price by acquiring a hefty volume discount from the
distributor.
__________________________________________________________
John D. Giorgis - [EMAIL PROTECTED] - ICQ #3527685
"The point of living in a Republic after all, is that we do not live by
majority rule. We live by laws and a variety of institutions designed
to check each other." -Andrew Sullivan 01/29/01
