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Post by pjohns1873 on Nov 28, 2013 17:42:44 GMT
Now that the Christmas season is approaching, retailers are slashing prices.
But over the Thanksgiving week, gasoline prices are soaring.
In other words, retailers of general merchandise tend to lower prices when they anticipate greater-than-usual sales; but sellers of gasoline tend to raise prices whenever they anticipate greater-than-usual sales (including both the summer driving season and those holidays that prompt many Americans to drive a lot, in order to come together with the rest of their respective families).
Does anyone else see an inconsistency here? |
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Post by ShivaTD on Jan 31, 2014 7:53:46 GMT
Now that the Christmas season is approaching, retailers are slashing prices.
But over the Thanksgiving week, gasoline prices are soaring.
In other words, retailers of general merchandise tend to lower prices when they anticipate greater-than-usual sales; but sellers of gasoline tend to raise prices whenever they anticipate greater-than-usual sales (including both the summer driving season and those holidays that prompt many Americans to drive a lot, in order to come together with the rest of their respective families).
Does anyone else see an inconsistency here?
An older post that I missed but another great issue to be addressed. I can only guess that the following reason is behind the differnce.
Merchandise can be stock-piled by a retailer but fuel basically cannot. A gas station has a very limited storage capacity and our refining capabilities and storage facilities for fuel are basically very limited. The "Oil Industry" doesn't have the capacity to store an excess so an immediate demand creates a shortage but retail outlets do have the capacity to store far more than they typically sell even during special "sales" days like the Friday after Thanksgiving.
Of course there's the opposite argument that the Oil Industry simply chooses to exploit the consumers because "fuel" isn't really a voluntary purchase for many of our needs. We don't need to purchase that special "do-hickey" from Walmart or Macy's but we need to fill up our gas tanks to get to work or to go on vacation. There is actually a lot of evidence to support this second proposition because the US oil industry exports low cost US crude oil to profit from the sale on the international markets and then re-imports crude oil at international market prices where the oil traders make a second "commission" on the crude oil. The following illustrates how this is done and it would be illegal under US law but because it uses international markets it avoids the anti-trust laws of the United States.
www.bloomberg.com/news/2013-09-17/the-american-myth-of-cheap-oil-and-gas.html?cmpid=yhoo
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