smokindog

I was in the Akron, OH area yesterday morning for some work in one of our service trucks (2002 Sterling Acterra). While making my way back to the highway I noticed that the BP station nearby was offering a $.05 per gallon discount every Tuesday night from 1830 until 0030 the next morning. And the regional grocery store chain offers a $0.10 per gallon discount for every $50 purchase in the store. Unfortunately they only have gasoline other wise I would be fueling there. When I purchase $150 a week in groceries it equates to a $0.30 per gallon savings for my mom (I give her my receipts.) and she smiles for the entire week.

How can we not believe that the oil companies and even the local station owners are not colluting with each other when a set of marketing ploys like these are in place?

Oh yeah, I really believe that BP station only makes $.03-.04 per gallon all day Tuesday and then at 1830 when the discount goes into effect they are actually paying $.01-.02 per gallon to help fuel their customers vehicles.

And the grocery store? C'mon, how can they discount upwards of $0.30 per gallon ($150 grocery purchase)? They nailed you so hard on the groceries that they are going to soothe your behind by discounting your fuel purchase. Even if it is a marketing ploy to get you to buy at their store that is like robbing Peter to pay Paul.

Ok, I'm done now....

fschiola

There's a guy here that owns many stations in town. Awhile back in a newspaper interview he stated that at $0.15 per gal markup he can barely make it. He's the one that always goes up first (and of course everyone follows) and goes back down last. Even claimed that the other stations in a nearby city that are selling gas cheaper were run by the oil company's and got a better price. What a load. As for the grocery stores, they will in fact sell gas at a loss to get you to shop in the store. Someone like you is in fact making up the difference on your grocery purchases. It's just like the items that are on sale in the ads you get every week in your newspaper. They are used to get you in the store and while you're there you will pick up other items that are profitable for them. Been done that way for many years.

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smokindog

Yep, there wouldn't be any independently owned and operated fuel stations if the corporate stations were selling for less.

2500Ram

I totally agree with fschiola. Do you really think you can produce a gallon of milk for 3.29 or a loaf of bread for 1.29 or cheaper? It's a marketing thing to get you into the store for the impulse purchase. I never really thought about it until some friends from Iowa were talking about how expensive it was to collect, transport and prepare dairy products. Then in a marketing class in college they confirmed the theory. Lose money on milk and bread but you’ll buy that bag of snickers with a 50% markup.

Same for gas.

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fschiola

Right on the money. It's called a loss leader and has been done for years.

crobtex

One of the business reports the other day said Exxon-Moibil has raised the next earnings prediction to 53%. I don't know when they released the numbers, but it was announced AFTER Katrina.

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fschiola

They may have worked those figures up some time before the hurricane though, just announced them after.

Fronty Owner

Its not unusal for stores to give discounts on fuel for inside purchase.
Most run a 20% mark up on inside merchandise. Fountain drinks are in the nighborhood of 200% mark up (that $1.00 big gulp cost about $.30 for cup, lid, straw, ice, and soda)

Boredexec

This is a true story, by the way.
When I was a kid in the 70's, my friends father was the guy who made all of the cars for disney. He made all of the special herbie cars and as a result made a lot of stuff in his garage. The guy tinkered all the time andd came up with a different type of carb that he put on a Rolls Royce taking it from 5 or 6 MPG (NOT A TYPO) to 38 MPG. He sold that little pice of hardware for 18 Million to Shell Oil CO. He moved to Oregon and I haven't seen them since.
My point to all of this is that there is currently better ways of extending the MPG rating of EVERY vehicle on the road, but the oil companies buy up the technology so that the consumer must buy more fuel. It is a corporate earnings no-brainer.
(His last name was Burnsworth for anyone interested in checking this out).
My point, once again, is that we are not in an oil crunch. We ARE in a price gouge. My 2 cents

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Boredexec

We raced in Venezuela in the annual Orinoco race. Fuel there is .20 a gallon. It is Citgo gas. We have Citgo gas here..... 3.12 a gallon. You can do the math.

BoostdCTD

They must not have a refinery shortage there like we do here... yea right!

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fschiola

Exactly, they have all the oil they can use, and all the refineries they need. Funny how that works.

infidel

Citgo gas sold in the US is refined in Venezuela and exported here.
For all the moaning about lack of refineries in the US why can't the refiners just use some of their windfall profits and build more refineries even if they cost more to meet environmental regs?
It's because there is no shortage of refineries, if there were we would be waiting in long lines for fuel and have rationing in place.

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batexp

Just because there is no shortage of blue-jeans here in the US does not mean that there no shortage of textile manufacturers. Friggin tree huggers, stiringent OSHA, EPA, EEOC regulations and whiney NIMBYS have all created such a hostile environment that no one wants to build any kind of manufacturing/processing facitily here. We have for a fact been importing in processed fuel for about 10 years to the tune of 10% because there has not been a new refinery built here since the early 80s.

Just as all US auto makers and so many other manufacturers have done, the oil industry has opted to build else where. This is due to environmental issues, cheaper labor, and that other countries welcome our technologies (and jobs) with big tax incentives and government partnerships. What better way to get past governmental regulations than to become partners with the ones that set the rules.

Most folks will not realize that Katrina only excellerated what was going to happen anyway. The EPA had slated new lower sulfer standards for gasoline to be in full effect by this October. The good news is that the refineries here had already spent the money to upgrade, but the majority of refineries elsewhere have not opted to upgrade. With 10% of the finished product comming from the elsewhere we were headed for a problem, soon.This is why one of the first things Bush did was to announce the relaxation of fuel standards after the hurricane. The standards will eventually go into effect and we will have shoratges because the fuel we import in will need to be scrubbed before we get to use it.

There is no shortage of crude oil, refined fuel or refineries in the world. The problem is that the oil companies/countries have always known how to manipulate the "supply and demand" factor in both products to boost profits.

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