Most people are unaware of how gas pricing works, I am not going to give out all the secrets but the next time you look at gas prices I want you to think of what all goes into deciding on how much to charge for that gas.
1.It starts with the rigs that drill for that oil, the cost of the labor and employee benefits paid to those employees. That is going to determine the barrel cost.
2. Then the barrel has to be shipped to a refinery for further processing, so now you have more employees, employee benefits and now the cost of shipping the refined product to a distributor.
3. Once the gas hits the distributor, depending on the fuel you might have certain additives that must be added, then you get your rack price from there.
4. Now a fuel carrier must come and get the fuel to take it to all the local station to sell that fuel, so you now have a trucking company, with employees and employee benefits, truck costs and so on.
5. The product hits its final destination when it hits the gas station, you now have the rack price, plus the cost of shipping, stations are charged a per gallon shipped, not a per load shipped. It also depends on the product being shipped as to what the final cost will be and how far away from the distributor the stations are, the further away from the distributor, the higher the cost of that fuel.
6. Now that it is at the gas station, they have to set the margin that they need to pay for all of their expenses for bringing the gas to the consumer.
The margin on a typical gas station is very small, they do not make their money on gas, they make their money inside the store, just like a movie theater does not make its money on the tickets sales but more of the food and snack products offered inside. The same principal works for your gas stations, convenience stores.
Just a little food for thought.
No comments:
Post a Comment