Is It Really Gouging?
Recently I had to drive to a nearby large metro area for business. Now traveling across the USA frequently I am well aware of the disparity of gasoline prices at the pump based not just on state and town but even the stations location to major arteries or it’s corporate affiliation. That being said I was completely shocked when driving 79 miles from my home gas went down 30 cents a gallon!
I can understand a fluctuation of 10 cents for distribution costs but what 30 cents amounts to in my mind is gouging. If you are moving a fuel truck 80 miles with 9,000 gallons of gas (the average load) an additional 10 cents per gallon is $900 per load and with diesel at $4.00 per gallon that equates to 225 gallons of fuel. At 6 miles per gallon that is a driving range of 1,350 miles but we only need less than 200. My point is this is the math with a 10 cent premium. If we have a 30 cent premium as I saw yesterday then the company pockets over $2500 extra revenue in every shipment of 9,000 gallons of gas delivered to the pumps.
What is really bad is that this is not going in the pocket of my local store owner. The retailer makes on average after paying credit card fees about 5 cents per gallon and has to prepay for his fuel. Just one drive off who steals a tank full of gas from his pumps and he loses profit from maybe half the shipment he may have received (rarely does a station take all 9,000 gallons from a tanker at once, rather they keep there tanks at the optimal level of not empty!) So just where does this extra money go? If crude has dropped but in certain zones the price of fuel has not dropped to reflect it yet who gets the landfall?
Well I can’t answer that question but to me it just sounds like plain old corporate gouging! What about you?
