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July 30, 2009



Gas stations were getting creamed last summer. They make more money selling you candy bars. They weren't selling candy bars because the price of gasoline was too high. A friend of mine that sells candy bars to stations said he was getting creamed.

You can drive down the street and price shop without getting out of your car. Most gas stations are small business owners and thus have zero cartel ability.

Refiners were getting the crap kicked out of them last summer too. Look at their quarterlies. That is why Exxon has been selling their refinery operations and a lot of their company owned gas stations.

Next time global GDP is growing 5% you will see oil right back over $125 when summer driving and refinery overtime season rolls around. Granted that might take a decade.


Indeed, this discrepancy has caused me much frustration. IF you compare the graphs of the price of crude to gasoline, you will see they are pretty much perfectly correlated. Prices at the pump look like they should be at least 15 cents a gallon lower. I don't know how retailers get away with this crap that they need to raise prices on what they have in their tanks now to account for the increased cost of future deliveries.

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