Talking Points: Who Sets the Price of a Gallon of Gasoline?

[Woodmonkey]

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[Snowden]

Two questions about this

1. What earthly good will it do to not get gas one day of the week - you need so much gas. When you buy it isn't important - you will buy it. Does it matter to the oil companies whether you buy on Sunday or Monday? Not in the least, IMO. However, if everybody skips one day, it will make the lines at gas stations start up again. Do we, the consumers, want that? (It is too one question!)

2. If one person decides what the gas station proprietor is to charge, why is it cheaper here in Cambridge than 12 miles down the road? Why is it cheaper one place than another; presumably, if one person is setting the price, he is setting the buying price for the owner; in which case, the owner would be setting his selling price where he wants it.

I'd much rather know why gas wasn't supplied to the Texas areas where Rita has been heading for the past week so those people could leave when the order to evacuate was given. That's a crime - and the oil companies could well be committing murders by not making sure that area was fully supplied.

Who do we blame for that?

[Woodmonkey]

Originally Posted by Snowden

Two questions about this

1. What earthly good will it do to not get gas one day of the week - you need so much gas. When you buy it isn't important - you will buy it. Does it matter to the oil companies whether you buy on Sunday or Monday? Not in the least, IMO. However, if everybody skips one day, it will make the lines at gas stations start up again. Do we, the consumers, want that? (It is too one question!)

No, it's not one question!!! (Sorry, I just couldn't resist! )

Seriously, I agree. Not buying gas one day a week just hurts the little guys and not the big oil companies.

2. If one person decides what the gas station proprietor is to charge, why is it cheaper here in Cambridge than 12 miles down the road? Why is it cheaper one place than another; presumably, if one person is setting the price, he is setting the buying price for the owner; in which case, the owner would be setting his selling price where he wants it.

I'm glad that he asked that question. I think you will find that the differences in price from place to place comes down to the taxes that are added to the price of gas. Cities, counties, etc have their own taxes.

I'd much rather know why gas wasn't supplied to the Texas areas where Rita has been heading for the past week so those people could leave when the order to evacuate was given. That's a crime - and the oil companies could well be committing murders by not making sure that area was fully supplied.

Who do we blame for that?

That is the one thing that no one is to blame for IMO. The gas is there, many if not most of the oil refineries are in that part of the country so no one is keeping it from them. However, some gas stations are shutting down and evacuating too, so their gas is not available.

He raises a good point though. Someone sets the price. Why is that someone a secret? What is being hidden from the rest of us? Why is it being hidden?

[AT3Weins]

The 5 major oil companies tell their regions what to charge. The regions in turn tell the districts what to charge. The districts tell the gas stations in a particular zip code that they can charge between x and y amount per gallon for each grade of gas.

At least that is what I've been able to uncover. The author of that article is correct though, for gas to cost us $3+ a gallon it would be trading at $95+ per barrel.

We're being screwed over by the oil companies and we are either too stupid to see it, or too stupid to stop it. We need to lower the demand for crude oil and demand that the oil companies have a profit margin of no more than 15% annually. They don't need to have a higher percentage of profit...even a 5% profit would mean millions of dollars profit every year.