Quote:
Originally Posted by GGG
Are you willing to pay more for gas from a station that paid more for its gas? Because if your replacement barrel costs you more than the one you are currently selling you are in trouble and you can't make it up on the downside by charging more for your more expensive barrels.
You have to charge what it costs you to replace. So if the refineries raise their price the local station has to raise theirs to follow suit. If it were price fixed at the local level prices would never drop.
Is it price fixed at the refinery level? Maybe but it could just be that all companies have realized that competing on price will cost them all money (independently rather than colluding) so instead of competing on price they spend it on marketing.
Unless you can produce gasoline for dramatically less than your competition and supply their market share it makes no sense to try to compete on price
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You raise a good point, but if any of it was true, then we should see fluctuations in price per litre between stations. If the price of replacement was the only factor, then the price at the pump would vary between stations depending on their need to refill. But it never does. It's all 101.9 or 93.9 or 109.9 across the city, minus Centex and Gas Plus for a cent or two.
It's total BS. Nobody has ever given a legit explanation for why all stations raise their prices within an hour of each other, outside of the obvious collusion verdict. They all buy at varying prices, they all have different levels of supply on hand, but if Petro raises the price down the street, suddenly the gas in Shell's tanks also cost more, and now must charge more.