Quote:
Originally Posted by jimh24444@gmail.com
Noticed gas on all 466A gas stations was 10 cents / gal cheaper than on 466. why would that be? 466 stations not treating people in that area right.
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The pricing of company stores is based on two factors - local competition (local being driving patterns) keeping tank farms from filling up.
Unless it is a small independent station, most company stations do not set their own prices. Most company stations today are convenience stores.
I worked driving a cash register at a national convenience store way back when we had just reached $4/gal for the first time. The manager had a specific route he had to drive to the station each morning. It was to get the posted prices of our station's direct competition. He would then send those prices to corporate and they would message back the prices they wanted us to sell at. That happened at least once per day, sometimes more often.
Most corporate stations do not make any significant money on gasoline sales. We often sold gas at a loss. It was our loss leader so to speak. We made our money on cigarettes and beer sales. We were a "smaller" station/store in a medium to lower-class neighborhood - and we did about $30,000/day in sales on cigarettes and beer.
In meetings with the manager and corporate representatives (the manager wanted me to go into management - so, I attended his meetings. I did want to go into management, it was not a career path for me, but the meetings were better than standing behind the cash register.
At these meetings, it was explained that the price we charged was based on two factors - competition and not letting the tank farm fill up. The tank farms act as a buffer between the refineries and the stations. Consumers' buying varies greatly based on lots of things. The goal was to keep the refinery running as close to 100% capacity as possible since that was the most cost-effective and efficient level. If sales would fall off and the tank farm started filling up they would drop prices to get more sales, and not allow the tank farm to get full.
As the tank farms start filling up, they will start raising prices until the level stops rising.
Global price variations in crude typically do not have an immediate impact on station gas pricing, because more refineries have bulk purchase agreements at a fixed price. Things like pipeline outages, wells giving out, supply chain slowdowns, etc. typical are more of a long-term impact.
Short-term variations have little to no impact. They have entire departments working to make sure the supply line does not impact the refinery. The more volatile the supply chain is (pandemic and Ukraine war) the more difficult it is to stabilize their refineries and maintain 100% production levels. Anything other than 100% cost the refinery LOTS of money