BTW, I've yet to hear an 'explanation' for the price increases over the past year.
China.
I posted similar questions in a thread a few months back. It was pointed out to me, politely, that I didn't get it. Having worked in the industry at one time, I didn't see how that would be so I decided to educate myself.
The raw materials aka barrel crude is a commodity. As such it is sold on the world market at auction. When there are more buyers than sellers, the price gets bid up. China, and more recently India (IIRC) have been buying everything that is offered. If we want to get our share we have to out bid them. This is a byproduct of all that "outsourcing" of manufacturing and tech support centers.
How does that relate to the individual stations?
Well, on the radio this morning, they said the wholesale market closed at $2.47 a gallon on Tuesday. The gas station I was driving by at the time I heard this had signs showing $2.54 a gallon. This varies from state to state, but in Indiana about 30 cents of the $2.54 is state and federal highway taxes. Looks like he's taking a loss right? How does he stay in business?
Well if it's a convenience store/gas station combo, the sales from snacks and sodas help some. But the store will survive on the cash reserves he built up when the wholesale price was lower.
It's sort of like when you see something on sale, or know the price is about to go up. You go out and stock up on it right? Well if you are the seller, the inverse is true.
