HEARING ON "GOUGED AT THE GAS STATION: BIG OIL AND AMERICA'S PAIN AT THE PUMP

[2naSalit]

3. It's all very similar product...

what makes the difference is what the market price at the moment the product is sold to the distributor who dispenses the product to the gas stations. Each gas station owner buys the gas at the price is sells at the moment the transaction takes place.

The whole market on a local basis, say southern California, there are many refineries and tank farms holding numerous products. When a gas station owner calls for and order, that is the transaction moment for the gas station and the price is set by the global and local markets at that moment.

There is often a middleman too, the transport operation who brings the gas to the gas station, that's the kind of operation I worked at for a spell as a driver and dispatcher where I learned all this. The gas station calls the carrier who goes to the dispensing facilities and buys the gas then resells it to the gas station... all of this sets the price for each station on the base level, then the gas station owner decides how much they need to make off the gas and then sets the price from that formula of cost and expected profit. The gas station usually makes very little on gas sales in the end, they get their profits from the convenience store sales and anything else they offer as a service, the gas is what brings in the customers who end up buying other stuff.

It's a filthy business from start to finish and everywhere in between.