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For what it's worth, I have been in the gasoline business in Texas and Louisana for over 30 years. I am a fair sized distributor for several major brands and have a chain of convenience stores. Sell about 11 million gallons a month. All this is sort of like admitting I have leprosy these days. Frankly, it is a crappy business. I am in several other businesses (metal recycling, shopping center development) and all are better than the gas business. I haven't built a new store in years and don't plan to build anymore. Just a poor investment return. Someone on this thread indicated there is price fixing. Over the years I have been to hundreds of oil seminars. Those guys can't agree on what kind of sandwiches to have for lunch much less get together to fix prices. Remember, it would take everybody, if just one does not, he gets all the business. For about 20 years, I pooled about 10 cents a gallon retail. During the year, I may pool 20 cents for a while, then 5 cents for a while but wound up around 10. Last year I actually pooled 15 cents and my net was less because of credit card fees. So far this year, I am around 16.7 cents pool. But if you come in and fill up on your American Express the credit card fee is around 15 cents a gallon. Try operating on that margin! A lot more to it than this, you couldn't explain all there is to raising pheasants in one post. Still, not a great business to be in.
Every time the wind changes direction the prices jump..Pipe line in Alaska has a crack in it...prices jump..Flood in South Texas...prices jump...Hurricane in South Louisiana...prices jump...oops another hurricane in South Louisiana...prices jump...earth quake in California...prices jump.
Steve,You are right, I can't tell you price fixing does not happen. I can tell you I have never seen it happen. As far as how prices react quick, I can tell you how we do it. I own 41 convenience stores. Each store has three key competitors we identify. If any of these key competitors drop the price we match immediately. Going up is slightly different, we wait until two go up then we go up also and give the third one 48 hours, if he does not go up we drop back down to meet his price.