[Winona Online Democracy] I would differ with you. There is more competition than ever. And some of it like the religious group that was selling below cost (which in petroleum does not include any expenses other than cost of product) in Anoka have motives that are hard to understand. They do however put small family businesses at risk of going broke, because of their loss leader pricing.
We have seen all retail demand more efficiency to get a share of the consumers dollar. There fore I submit that all business is more competitive today than ever before in time. Tom Severson Severson Oil Co. P.O. Box 736 Winona, Mn. 55987 507 452 3402 ext 214 -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of terri hyle Sent: Tuesday, August 30, 2005 2:23 PM To: [email protected] Subject: RE: [Winona] Re: Winona Digest, Vol 20, Issue 22 [Winona Online Democracy] QUOTE (TMSCHMIDT): 2) remaining competitive with the guy down the street, Unfortunately, there is precious little competition left in the retail gasoline market, not only in Winona, but throughout the portions of the midwest I just drove through. Differences exist between states, and between major cities vs more out of the way stations, yes, but actual competition? Nah. Terri Hyle <BLOCKQUOTE style='PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #A0C6E5 2px solid; MARGIN-RIGHT: 0px'><font style='FONT-SIZE:11px;FONT-FAMILY:tahoma,sans-serif'><hr color=#A0C6E5 size=1> From: <i>"Schmidt, Tania M" <[EMAIL PROTECTED]></i><br>To: <i>"C. E. Woodford" <[EMAIL PROTECTED]>, <[email protected]></i><br>Subject: <i>RE: [Winona] Re: Winona Digest, Vol 20, Issue 22</i><br>Date: <i>Tue, 30 Aug 2005 13:39:38 -0500</i><br>>[Winona Online Democracy]<br>><br>>Fuel pricing at the retail level is a very tricky thing. Retailers must<br>>strive for that perfect balance between 1) cash flow needs, 2) remaining<br>>competitive with the guy down the street, 3) actually making a profit.<br>>In today's market, the average retailer may only be making 8-12 cents<br>>per gallon. On a percentage basis at today's average retail price of<br>>about $2.70, that's a gross profit % of a whole 3-5%. If any other<br>>businessman were to price his #1 selling item at that margin, they would<br>>go out of business - or their accounting firm would tell them to wise up<br>>and start selling the product they sell the most of for at least a<br>>20-25% margin.<br>><br>>Yes, the price moves up sometimes at just the hint of oil/fuel supply<br>>issues. That's because they need more cash to pay for the more<br>>expensive fuel. True, it does not come down as fast as others think it<br>>should.<br>>However, on the way up, retailers frequently earn less because their<br>>cash flow doesn't always enable them to keep their tanks full. On the<br>>way down, they try to make up for some of that lost profit.<br>><br>>In the end, it is a game of supply and demand. The price may be near $3<br>>per gallon, an increase of about 100% over the past 2 years. But, has<br>>the demand decreased by anywhere near that amount? Absolutely not -<br>>domestic demand for oil and refined product continues to climb. Why<br>>should be price NOT increase when demand continues to increase?<br>><br>> >From the refiners' vantage point, they are FINALLY making the returns<br>>that their billions upon billions of dollars in investment and potential<br>>risks/liabilities dictate they should be getting. Much of our pipeline<br>>system dates back to WWII. Many of our tank farms are old. We haven't<br>>built a refinery since Mobil's Joliet Refinery opened in the 70's. With<br>>some cash in the bank, oil-related industries can actually start<br>>reinvesting and replacing these antiquated facilities.<br>><br>>When the rest of the US consumer base was making money hand-over-fist in<br>>the '90's stock market boom - just by trading paper and not producing<br>>anything - the oil industry was busy restructuring, cutting costs,<br>>becoming more efficient. Now they're reaping some of those rewards -<br>>just like any other business would expect to do.<br>><br>>The Oil Industry is always picked on when prices are high. Did they<br>>receive any letters of 'Thank You' when they were selling fuel at $0.99<br>>per gallon just a few years ago? If you take a look at what gasoline<br>>should be costing, based on the rate of inflation since about 1970, it<br>>should be nearer the $5.50 mark. Everything else went up in price - as<br>>did sales volumes of all those consumer goods. Why not fuel?<br>><br>>In today's regulatory environment, refiners are producing no less than<br>>51 different types of fuel around the country. It's not just 87, 89,<br>>and 91 Octane. It's Summer Fuel with 15% Methanol, it's Winter Blend<br>>with only 5%, it's Orange County with it's requirements or Cook County<br>>with it's own.<br>>Local governments, over the past 10-15 years, have taken it upon<br>>themselves to become experts in not only the business of cleaner air,<br>>but portend to be able to tell refiners what to sell and how it should<br>>be produced. Producing that many is one logistical challenge, but<br>>shipping different fuels to different locations in the same pipeline<br>>present a whole other challenge.<br>><br>>Tania Schmidt<br>><br>>-----Original Message-----<br>>From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On<br>>Behalf Of C. E. Woodford<br>>Sent: Tuesday, August 30, 2005 12:23 PM<br>>To: [email protected]<br>>Subject: [Winona] Re: Winona Digest, Vol 20, Issue 22<br>><br>>[Winona Online Democracy]<br>><br>>_______________________________________________<br >>This message was posted to Winona Online Democracy<br>>All messages must be signed by the senders actual name.<br>>No commercial solicitations are allowed on this list.<br>>To manage your subscription or view the message archives, please visit<br>>http://mapnp.mnforum.org/mailman/listinfo/winona<br>>Any problems or suggestions can be directed to<br>>mailto:[EMAIL PROTECTED]<br>>If you want help on how to contact elected officials, go to the Contact page at<br>> http://www.winonaonlinedemocracy.org<br></font></BLOCKQUOTE> _______________________________________________ This message was posted to Winona Online Democracy All messages must be signed by the senders actual name. No commercial solicitations are allowed on this list. To manage your subscription or view the message archives, please visit http://mapnp.mnforum.org/mailman/listinfo/winona Any problems or suggestions can be directed to mailto:[EMAIL PROTECTED] If you want help on how to contact elected officials, go to the Contact page at http://www.winonaonlinedemocracy.org _______________________________________________ This message was posted to Winona Online Democracy All messages must be signed by the senders actual name. No commercial solicitations are allowed on this list. To manage your subscription or view the message archives, please visit http://mapnp.mnforum.org/mailman/listinfo/winona Any problems or suggestions can be directed to mailto:[EMAIL PROTECTED] If you want help on how to contact elected officials, go to the Contact page at http://www.winonaonlinedemocracy.org
