Like Wal-Mart, watch for falling prices
Tuesday 17 Jul 2007 | Posted By Ed Aboufadel | Predictions
Comment on Saturday’s prediction: Prices did just that, with $3.19 in a number of different places in town on this afternoon. CORRECT.
Tuesday, July 17, 2007, 2:13 PM: Whoo hoo! Lower prices, here we come. New York wholesale prices have dropped 18 cents in a week, and Chicago wholesale prices have dropped 45 cents! That has to put the 0-cent margin price below $3, so look forward to continued price drops as the week goes on, and shun those stations that are still above $3.30. I don’t see any sign of a price hike this week.
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Times like this when prices either quickly rise or quickly fall, it makes it impossilbe to figure out what your actual cost of gas in the ground is, or what price you should be selling at. From 7-11 to 7-19 wholesale prices have dropped 58 cents.
That puts today’s cost at $2.75. That doesn’t mean that stations selling gas for $3.19+ are “gouging” customers. It is very possible for a lot of stations to have an inventory cost 30-50 cents higher than today’s cost.
An average station turns their inventory in 3-5 days, there are some high volume stations that get a delivery almost every day, and there are smaller stores that might only get 1 delivery per week. In reality the Meijer, and Sam’s club stores selling gas at $3.159 are probabally “gouging” people by making over 38 cents per gallon, and the stores selling at $3.369 might only be making 10 cents.
Unless wholesale prices start going up again for some reason, I would expect the majority of the State to have retail prices under $3 next week.