What stories would you like to see in Monday's business page?

You have been answered above. It' not a Cape/Jackson thing. Lays Chips come on the same truck too.

-- Posted by SEMO72 on Fri, Oct 24, 2008, 10:52 am CDT

The answer to this question is really quite simple. In fact you seem to be stepping over it in your answer, actually explaining it yourself. The reason the price in Jackson is different from the price in Cape, and the reason the price is different at a Kidds on Broadway from what it is on Kingshighway is the same reason the price is generally higher on the interstate. The price is what it is because you will pay it.
Since you know the price at one station is less than it is at another, don't go to the station with the higher price, you have the information so use it to your advantage. Isn't this the same situation with other prices. You know that prices for groceries at one location is lower than they are at another location and yet you still choose to shop at the place with the higher price. Why is that? If all decisions were based solely on price and nothing else, the grocery store with higher prices would go out of business because no one would shop there. However, we know this is not true. Have you ever been to a wholefoods, some would consider their prices to be ridiculous, and yet they are always busy.
So a gas station that charges higher prices does so because for what ever reason you will still get gas there; perhaps that station thinks it has a quality of products, other than gasoline, that will attract customers, even if their gas prices are higher. You, as the consumer get to make the decision for yourself. If everyone based their preference solely on the price of gas, then a gas station which sold only gasoline for cash at rock bottom prices would be the only stations in town. But that isn't the case, is it. Apparently the other stations offer something that the basic one does not, at any time you can drive by the basic station and a station with higher prices and people will be getting gas at either station. In fact, one gas station with a higher price can be directly across the street from a station with a lower price and both gas stations will have people getting gas. So obviously, the consumer has a reason that would make them go to the higher priced gas station, they think one offers something that they are willing to pay more for that the other does not. The reason cannot be a lack of knowledge about the other's price of gas, just look up, it is posted for all to see in numbers that are a couple of feet tall.
I do not understand why people are so suspicious of gas stations. People often lament about the rapidity with which prices rise relative to the price of oil, and how slow they fall relative to the price of oil. In order to understand, you must understand the concept of replacement costs. For example, a gas station has gasoline in its tanks for which it paid $1 a gallon, and it sells for $1.15. If the wholesale price of gasoline were to rise to $1.16 a gallon, the gas station could no longer sell a gallon of gas that it has in its tanks for $1.15, even though it only paid $1 for it. If it sold it at that price, the gas station would not have enough cash from the sale to replace that gallon of gasoline, it would be a penny shy. This is why the gas prices shoot up so quickly, the price charged for a gallon of gas has to be enough to be replaced with a gallon at the new price.
As for why it takes so long for the price of gas to come down, I don't think that is all that hard to figure out. It is the nature of business to get the best price for as long as you can. Show me another business that will voluntarily, without price competition, lower their price to reflect lower wholesale prices.
Also, I did not hear anyone complaining that gas prices should be higher when the wholesale price was $3.80 and the retail price was less than $4.00, keeping in mind that on top of that $3.80 was a Federal/State/Local fuel tax of $.35+-.

-- Posted by nils7 on Thu, Oct 23, 2008, 1:11 pm CDT

My theory on the prices are if you want higher prices because you benefit somehow, you raise them until people cannot stand it anymore. Then when you lower back to where you want them people don't complain because now they are "cheaper" so to speak. The consumer side gets a break and thinks this is better than before and the supplier knows this is better than before.

-- Posted by SAHD on Thu, Oct 23, 2008, 12:15 pm CDT

The fixed cost of operating a refinary do not fluctuate when oil goes up or down. The cost to deliver the fuel actually goes down when oil prices decrease.

So in my opinion and I don't know who to blame, producer, wholesaler or retailer but I think we all agree that prices go up a whole lot faster then they go down.

On top of that. Why do prices fluctuate so much between location in our area. Why is perryville cheaper than Jackson? Same retailer same wholesaler I must assume.

I believe that they prices don't come down since they want us used to high prices. Like those who right now are saying how cheap fuel is. Heck no, it's expensive. .65/gallon is cheap. $2.65/gallon is less expensive but still expensive.

On the same note. Remember all the surcharges the airlines created to compensate for fuel cost. Have any been removed or reduced? Even the post office raised their rates. Those won't come down anytime soon.

-- Posted by interesting on Thu, Oct 23, 2008, 11:30 am CDT

Dear rh3: I understand the fixed costs involved. I guess if they raised their cost to compensate for higher fuel a year ago, thier costs are still going to be the same. But lets set aside all those costs. I did not read where you are from, I assume locally. Cape and Jackson prices fluctuate like the nations, but a few months back Cape was actually cheaper. That being said back to fixed costs... lets start at the gas is in the truck and ready to deliver and we will put aside Interstate stations because we know why fuel is more expensive there. So the gas in the truck stops at station A and delivers and then goes to station B and delivers. Then you come by and these stations with in a few miles of one another are selling fuel at a 10 cent difference. I am sure everyone has heard the sob stories of owners saying they make only pennies on the gallon. This cannot be true.

-- Posted by SAHD on Thu, Oct 23, 2008, 10:43 am CDT

SAHD,
Sorry for not replying to your e-mail. It must have gotten lost in the mix. I will say I and some others have been trying to find that answer but have gotten nowhere. That's something that curious to us too.
As for the price of oil not matching with what should be current gas prices, I've been told that the price of oil posted today is 67 dollars while the wholesale price of gas is 1.57. Why is that not cheaper at the pump? There's about a 50 cent charge that's added onto the wholesale price, but petroleum executives have told me in previous articles that what the consumer pays now is from previous deliveries. As we can see, the price is going down at the pump every few days. I'll keep looking into it to see what I can find.

-- Posted by Brian_Blackwell on Thu, Oct 23, 2008, 9:14 am CDT

I have written this in an email already and no reply. I would like to know why there is so much difference in fuel prices at times in Cape and Jackson. It cannot be taxes as just a month ago there was cheaper gas in Cape over Jackson, something unheard of in years. Also, not including I-55 stations, I understand that, but why like last night, Kidds on Kings highway was 2.67 and Broadway was 2.65. I am just curious about these two things. I thought the gas came from the same truck. And yes I already know about supply and demand.

-- Posted by SAHD on Thu, Oct 23, 2008, 7:30 am CDT