Quote:
Originally Posted by Sashi
And you believe their malarkey? I just drive down the street and and look at the gas prices. The majors all go up the same amount at the same time. A refinery in the states does some maintenance, our prices go up, the American prices remain constant. But if you wish to bury your head in the sand and say all is well then , so be it.
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You need to understand the inter connectedness of a global and north American commodity price and supply chain. Lots of details on the net.
I will try to summarize.
Gasoline is a commodity like soyabeans, lentils, gold, silver, wheat, corn etc.
Then there are costs to move stuff around that is factored into the commodity markets. When one area doesn't have enough product or there is a shortage in manufacturing there is a ripple across the market. Just because corn is grown next door doesn't mean the buyer next door buys it cheaper than the commodity price set by supply and demand.
Yes you can blame deregulation on this impact however you can't blame companies themselves.
Companies are not making money hand over fist. For their size they make modest profits when they can and eek out more if possible to cover the down turns. Oil and gas is not an easy upstream business. Downstream has some challenges as well with trying to guess what is the right mix of products to make in order to make the most money. They have fewer risks however. As a business...they all need to make money to survive.
Now...as for collusion. There is nothing secret about gasoline prices. They have a giant sign that states their price right in front of the station.
Any competing gas station can look out and see the competitors price. They can based upon this visual do anything they want to their price. Lower it, keep it the same or raise it. In the absence of any change in the wholesale cost of the gasoline in their tanks they can sell it at what ever price they want to try and make as much money as they can. As a consumer you can feel they should give it to you as cheap as possible. Don't blame you. I want everything cheap also. Seriously. We all do as consumers.
This is where consumers as mentioned by others can impact the prices. Shop the cheapest when ever possible. Stations need business. Raise to much...people move. Too low...impacts profitability.
For collusion to occur...two businesses need to get together and say...I will raise my price if you raise yours. That my friend is a huge no no and rightly should end in fines and even jail time.