CBS News ran a story on Friday about an issue many motorists have noted time after time the price of oil fluctuates.
They notice that when the price-per-barrel of oil goes up, the price of gas jumps immediately. Yet when the price goes down, the price at the pump doesn’t drop right away.
When oil prices rise, gas station owners have long explained, they must increase the price per gallon at their stations because the next shipment of gas they buy will cost them more; by raising the price right away, they claim, they offset a huge loss they’d otherwise suffer, which they would have to pass along to the consumer.
Even though the gasoline being pumped from their tanks at that moment is the pre-hike gas, which they paid less for.
So they’re making an extra profit that they say they’ll use to cover the price hike they’ll face when the next tanker comes in.
But in this story from CBS, a gas station owner explained that the reason gas prices at the pump don’t drop right away is that the prices the stations are charged for the next shipment of gas won’t drop right away, either. So they have to keep the price higher to offset the cost.
But wait a second here. These gas stations are trying to eat their cake and have it, too: if they’re going to charge us more to cover a bill they haven’t even received, then they shouldn’t be able to continue to charge us more when they know lower prices are on the way.
It could be argued, of course, that those savings aren’t guaranteed, since the price of gas could go right back up before that next shipment arrives. Unfortunately for sellers, the same can be said when gas prices shoot up: by the time their next order of gasoline arrives, the price could just have easily have dropped that much more, lowering the price of gas more than they expect. If you can’t predict one, you can’t predict the other.
I know that many people hate the thought of government regulations stepping in, but a situation like this screams for some kind of controls to protect the consumers. It’s clear that gas stations aren’t looking to do that.