How gas stations price their product

Gasoline and Diesel are priced by rack though out the country.  I suggest googling “Gasoline Rack Prices” for more information. Companies such as OPIS make a business out of monitoring and reporting wholesale rack prices at 200+ racks across the country. For a price any one can access this information including the local gas station owner.

 

Refining/Transportation companies price the racks in an array by location based on their cost to supply. Their power in the market place (perception of quality XOM vs. Sinclair), the retailer relationship with the supplier (i.e. are they carrying a branded flag and what volumes are they allowed to pull), etc.  The pricing is dynamic to avoid runs on inventory by retailers who see a price discontinuity, etc.

What happens at the retail level after the fuel is purchased at the bulk wholesale rack is usually driven by local issues and may have less transparency. However fast is the local gas station turning over inventory, where do they make their money (Beer, Twinkies, car wash, etc), are they branded, location, etc.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: