I have hard reactions to the higher gas prices range from resignation to outrage. On the outrage side, some people seem to believe that greedy oil companies are in total control and have decided to screw us all or that greedy local station owners are in total control and out to get us all.
I can't address the oil company question, though what reading I've done of comments by industry observers tells me the prices we see at the pump are the result of a complex series of influences. But I have a little insight into the local market.
I once did some research into the business on a local level, and one station owner told me something interesting: he makes more money when gas is $2 a gallon than at $4 a gallon.
The reason? There are three.
Higher prices mean people buy less gas. Simple.
Higher prices don't mean bigger profits per gallon. His margins are about the same. That means when people buy less gas because of higher prices, he makes less money.
Higher prices mean people make different choices on how they spend their money, and they tend to decide at the pump to pay for gas but not to go inside the convenience for a treat.
I was surprised when the gas station owner told me he hates higher gas prices. But his reasons make sense.
FOX 17 Home
I can't address the oil company question, though what reading I've done of comments by industry observers tells me the prices we see at the pump are the result of a complex series of influences. But I have a little insight into the local market.
I once did some research into the business on a local level, and one station owner told me something interesting: he makes more money when gas is $2 a gallon than at $4 a gallon.
The reason? There are three.
Higher prices mean people buy less gas. Simple.
Higher prices don't mean bigger profits per gallon. His margins are about the same. That means when people buy less gas because of higher prices, he makes less money.
Higher prices mean people make different choices on how they spend their money, and they tend to decide at the pump to pay for gas but not to go inside the convenience for a treat.
I was surprised when the gas station owner told me he hates higher gas prices. But his reasons make sense.
FOX 17 Home
