gas rip-off Recent Comments

re: gas rip-off

2009-07-03 22:59:43

posted by: Old Jake.

outofrange Said:
Without having access to OPIS, several things may be going on.

First, Fargo is traditionally an absolutely cut throat market. Nearly always less than the surrounding towns including others on the pipeline. That just comes down to some aggressive retailers refusing to lose the price battle.

Second, Fargo is essentially at the end of some pipelines (Cenex from the west and I think Magellan from the SE). Since the fuel HAS to come out at the end of the line, Fargo will get often get discounts from the refiners in order to push sales. Discounts are not reflected in the posted "wholesale" prices. Think of the listed wholesale price as the equivalent to the invoice price on a vehicle. Just as auto makers have hidden discounts to auto retailers, refiners will grant a "discount" below wholesale at the terminal.

As far as Sams, they may have lowered prices for a day to try to drive store traffic. Sam's is precisely the type of store that would use fuel as a loss leader. If they sell gas at 14-cents under cost (the swing in their pricing) and the average fill up is 10 gallons, it's only $1.40 that they are out, that is an insanely cheap promotion.

Thanks for the info. I have a little better understanding of the process now. I knew that Fargo had some pipelines into the market and the competition there was fierce. The thing that I had trouble understanding was the "wholesale pricing".

re: gas rip-off

2009-07-03 21:18:25

posted by: catmechanic. can't we all just get along? mind my french, but holy shit. everybody is in the business to make money, you, me, all of us. what i don't understand is how town A can sell gas at 2.39 a gallon, and town B who ships gas to town A sells gas for 2.69 a gallon. they are pretty much holding a gun to the head of the consumers. and what choice do they have. none.

re: gas rip-off

2009-07-03 20:40:24

posted by: outofrange. Without having access to OPIS, several things may be going on.

First, Fargo is traditionally an absolutely cut throat market. Nearly always less than the surrounding towns including others on the pipeline. That just comes down to some aggressive retailers refusing to lose the price battle.

Second, Fargo is essentially at the end of some pipelines (Cenex from the west and I think Magellan from the SE). Since the fuel HAS to come out at the end of the line, Fargo will get often get discounts from the refiners in order to push sales. Discounts are not reflected in the posted "wholesale" prices. Think of the listed wholesale price as the equivalent to the invoice price on a vehicle. Just as auto makers have hidden discounts to auto retailers, refiners will grant a "discount" below wholesale at the terminal.

As far as Sams, they may have lowered prices for a day to try to drive store traffic. Sam's is precisely the type of store that would use fuel as a loss leader. If they sell gas at 14-cents under cost (the swing in their pricing) and the average fill up is 10 gallons, it's only $1.40 that they are out, that is an insanely cheap promotion.

re: gas rip-off

2009-07-03 14:01:55

posted by: Old Jake. Outofrange, Since you have experience in the business, could you explain something to me? If as the article in the Tribune stated, that the wholesale price in Fargo is more than in Bismarck and Fargo is selling gas 25 cents less a gallon than Bismarck, are the stations in Fargo selling for cost or less? Are the stations actually making that much of a profit in Bismarck and other western ND cities? I don't have any quarrel with someone making a profit but it would seem that some entitys are taking advantage of the consumer because we have so little competiition here. As I stated in my previous post, Sams in Bismarck dropped their price from 2.66 to 2.52 one day. The next day it was back up to 2.64 so it would seems to me they were still making money but chose to raise the price cause non of the other stations in town lowered their price. It appears that gas prices do not necessarily always follow the laws of supply and demand.

re: gas rip-off

2009-07-03 08:35:18

posted by: Little Elvis. i dont know if you guys are talking about the same charge as i am...the credit card company get 1.5-2.5% of EACH purchase that is made with their card....if you are saying the credit card company is getting 8.2% that is crazy i have never heard of such things

re: gas rip-off

2009-07-02 21:16:18

posted by: outofrange. Then it sounds like you should open your own gas station marksman. You are full of anecdotal observations that I just have a hard time (because of my experience) taking as fact. It seems you have a bit of knowledge about the industry, yet still are unable to understand the actual economics of the business, merely throwing random numbers (stations averaging 10-cent/gallon profits) to support your argument.

How much profit should be acceptable? Are you a socialist... I tend to believe in free markets.

As far as gouging Joe/Patty Public, I am done trying to fix stupid over the internet. The tinfoil hat patrol should meet over in the Obama birth certificate thread.

re: gas rip-off

2009-07-02 20:25:11

posted by: marksman. Kenmare has their own semi and tanker yet CHS does their trucking. The only time the tanker moves is if Mr. Farmer orders a tanker load. Farstad oil is one of the biggest gas,diesel delivery services,really small con=mpared to Cenex, Yet all of the gas in the Minot area comes from the Cenex terminal. Last winter there were 6 different diesel suppliers that got fuel out of the Cenex terminal and the fuel plugged fuel filters Sure cenexwould replace the filters but what about time,effert to change the filters,and inconveince. Cenex chose the easy way out and the cheapest by replacing filters.

There are no rules in the fuel supply industry. Just say demand is up and supply is short and start price gouging Joe/Patty Public.

If a convience store sells a tanker load a day 8500 gallons/day at only 10 cents profit
That seems like a lot of profit just off the gas. Everything is always higher ,soda,chips etc. Just how much profit should be acceptable.

Ask any station that you fill up at "is this place for sale" you already know the answer.

Just google petro stations for sale in N.D

re: gas rip-off

2009-07-02 19:12:18

posted by: outofrange. Actually, depending on the per swipe fee, the 8.2% might be in the ball park.

re: gas rip-off

2009-07-02 18:56:27

posted by: outofrange. Why does it matter where ND crude is going? $10 lower than $69 is better than $10 lower than $40...right? High oil prices, even if discounted, still do ND good.

"Farstad hauls fuel for 5 cents per gallon per tanker for the first 50 miles and another 5 cents per gallon per tanker up to 100 miles, So why do you think CHS does alot of the trucking, look at the porfit. Don't tell us about insurance because I also have a million dollar policy and my yearly preminum is 1677.00 per year."

So that's 10-cents for 100 miles... roughly how much do you think freight would be for 200 miles. This is for Farstad, one of the biggest (if not THE biggest) jobber in the tri-state area (MT, SD, ND). Of course CHS hauls as much as they can, it only makes sense that with their fleet they can do it more efficiently than paying someone else to do it. BTW, local coops often own their own tankers, it's not like their forced to use CHS transportation.

Kum and Go's (now Zip Trips) are generally corporate owned Cenex stores, those decisions are not made by a local manager, hence a phone call. Are you angry that they call the same time every day or that they follow regional and national trends with their pricing?

How fast did the price go down last fall summer? From $4.00 to sub-$2.00. Your observation of the directionality influenced speed of price changes are completely anecdotal with no factual basis.

8.2%? Holy hockey sticks. Either you have bad info or someone should be fired.

re: gas rip-off

2009-07-02 18:28:44

posted by: marksman. Marksimon get your facts straight In Rolla the credit card charge is as of today 8.2% for the processing fee at the station.