Reply #10: The should raise prices before they fill their tanks [View All]

[The Croquist]

Follow the argument before you flame:

Scenario A:
Prices go up 33 cents a gallon and the station has 10,000 gallons of gas. The station doesn't raise their prices. They give up $3,300 in revenue but make you happy.

Scenario B:
Prices go down 33 cents a gallon and the station has 10,000 gallons of gas. The station doesn't lower their prices. Everybody goes to the station across the street because his gas is 33 cents a gallon cheaper.

Real life:
Stations change their prices to reflect their competition. Sure some stations are slow to drop but they do.

Several years ago in Georgia we had a gas shortage because a Gulf hurricane shut down the refineries just before they were scheduled to deliver our "Boutique" gas. As a result the wholesaler's tanks were low. Prices skyrocketed and there wasn't enough gas to go around. As things settled down and prices started to drop, all the big stations were pumping gas but the mom and pop convenience stores still didn't have any gas. The reason was that the owners weren't willing to fill up with expensive gas that they would have to sell a few days later at a lower price. The stations that get refills everyday didn't have that issue.

Ok, feel free to flame.