Ramblings of Silver Blue


14 Oct

Explain to me something

We have three gas stations in question.

Station 1 is a Shell. 87 octane is $2.99. Diesel is $3.89.
One block down the street, same side is a BP where 87 octane is $2.89. Diesel is $3.19.
Half a mile down the street from that is another Shell. 87 octane is $2.79, Diesel is $2.99.

Hard to believe that two Shell stations, within half a mile of each other are 90 cents different in diesel, and 20 cents different in 87 octane. I can understand price fluxuations between independent gas providers, but for major chains? Seems to be a bit extreme to me. Almost to the point of gouging. After all, the first Shell station mentioned, whenever anyone says gas prices are going to rise, immediately jacks up their costs 20 cents or more per gallon. They were the first station over $3 here in the Hampton Roads area.

The Shell across from where I work (about 3 miles from the last Shell mentioned) is $2.66 for 87 octane, and $2.86 for Diesel.

3 Responses to “Explain to me something”

  1. 1
    Tig Says:

    According to my friend who owns a convenience store, the prices are set according to wholesale price at the time the delivery truck fills the tanks. At the current time, it seems the price jumps up and down on almost a daily basis. I suspect one of the Shell stations sells more diesel than the other, so may have a half a tank left from the delivery made right after Rita landed in the Gulf area.

  2. 2
    Silver Blue Says:

    Thanks Tig…that sort of makes sense — at least from a business standpoint.

    I just can’t help but feel that Mr. 3.89 a gallon is going to have to take a loss because with the BP being 3.19, and your nearest chain also being way cheaper, you’re going to be sitting on some very expensive Diesel for quite some time.

    I understand about shortages, etc, but I honestly believe that fuel cost increases can be attributed to two factors (not withstanding hurricanes):

    1. America’s “lack” of refineries. Even the President has expressed concerns that no new refineries have been built in almost 20 years. Whether or not he came to that conclusion on his own or if someone gave him the info, it needed to be said. We put our eggs in one basket, as it were, by bundling the refineries along the coast, where it’s easier (and cheaper) to offload the tankers.

    2. Blatant yellow journalism. Here in Hampton Roads, we had every news station running around going “gas prices may hit $5 a gallon!” and that simply drove people to the stations en masse depleting all sources of fuel and causing prices to “artificially” inflate. If people had conserved, not panicked, and kept their heads, the price spikes, IMHO, would not have been as severe.

  3. 3
    revog Says:

    As a former manager of a sugar creek chain store. Prices are set by a) cost of fuel when purchased by corporate b) prices in surrounding mile radius (ex. price wars between station across street) and c) if the store is owned by a franchisee or not.

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