Okay, so here’s one I’ve never been able to understand and finally got around to pursuing. If you drive (or at least if you’re the one filling the tank!), this topic is near and dear to you. Hopefully, this quick and dirty explanation will at least give you a framework for understanding what is happening — as for motives, well, I’ll reserve judgement on that front!
Over and over again, we see a news story indicating a rise in crude oil prices and it seems (heck, seems nothing, this happens!!) like your fill up station down the block jumps their prices. This has always absolutely baffled me — and doubly so since we never see the reciprocal effect when the price of crude goes down (and least not in such a timely manner).
So, here’s the deal as I understand it (though I’ll readily confess that veering into economics territory is not exactly my strong suit…). Franchised stations do their current pricing based on the futures market rather than physical inventory. So in very layman terms, when crude goes up, sometime in the not too distant future, the stock physically on hand at the station will have cost more when delivered. And you know, I suppose I could live with that if it went down as far and as fast when the futures market points that way. Guess that one will need to just stay on the wish list.
Here’s the analogy .. we know that grocery prices will go up as fuel costs go up. Note .. “will” go up. I still haven’t seen the folks down at the Piggly Wiggly repricing the lettuce an hour after that latest price on a barrel of crude is announced.
The fix? Well, not a fix, but here’s a tip that sometimes pays off. The truly independent stations tend not to operate like this. The pump price is based on the price they paid on whatever is in their storage tanks. While not a universal rule, probably worth knowing who the independent local folks are .. they might just have a real deal for you when the big guys are running up their prices.