Unfortunately, independently owned gas stations cannot afford to operate at a loss, unlike the federal government. Still wondering why the elected Republicans do not offer legislation requiring Biden to give up his fossil fueled travel, especially for his weekends off, as well as for his staff and appointed officials, till 87 gas goes below $3.00 a gallon. Unless they want to pay for it themselves
Joe Biden Demands Gas Stations Lower Prices: ‘Do It Now’
President Joe Biden demanded Wednesday that gas stations start lowering their prices, in his latest attempt to address record-high prices this summer.
“To the companies running gas stations and setting those prices at the pump, this is a time of war, global peril, Ukraine,” he said.
The president spoke about the record high gas prices occurring during his administration during a speech on his imitation White House set across the street.
“These are not normal times. Bring down the price you are charging at the pump to reflect the cost you are paying for the product,” Biden said. “Do it now. Do it today.”
So, make zero profit? That totally makes sense, right? Does Brandon understand that most of those stations are not owned by the gas companies, but, are licensed, much like most fast food places are franchises, not owned by companies like Burger King and Subway?
Do the major oil companies own all the service stations in this country?
No. According to the latest information, the refiners own less than 5% of the 145,000 retail stations. When a station bears a particular refiner’s brand, it does not mean that the refiner owns or operates the station. The vast majority of branded stations are owned and operated by independent retailers licensed to represent that brand. According to the National Association of Convenience Stores (NACS), more than 60% of the retail stations in the US are owned by an individual or family that owns a single store. Through various branding agreements, approximately 36% of the retail stations in the US sell fuel under API members’ brands. See U.S. Service Station Outlets Summary.
That’s the reality
Biden griped that the price of oil had fallen slightly, but the price of gas had not.
“Some haven’t reduced prices at all,” he complained.
Biden called for congress to pass a federal gas tax holiday and urged states to do so as well, noting that it could help reduce prices.
“I’m doing my part,” he said defensively. “I want the congress, states, the industry to do their part as well.”
Doing his part? Asking Congress to waive 18.4 cents a gallon? While taking a lot of fossil fueled travel on the taxpayer dime? How much fuel is used to helicopter Joe to Delaware? That’s like putting Flex Tape on a leaking car radiator. Gas stations make about 10 cents per gallon. States make way more than that. How about declaring that the federal government will fast track new, next gen refineries? It’d be funny as hell if the gas stations near Joe’s Delaware beach house refused to sell gas to him for his large convoy.
Price controls are next. For career politicians the only solution they know for their own corruption and interference is more corruption and interference.
Some Democratic party activists are already proposing going full Venezuela and nationalizing the oil industry. Because that worked out so well in Venezuela. … But they did it wrong. Our elites are smarter and went to better schools. We can pull it off and have a managed society.
Oil companies are quite happy with current prices
Why would they do anything different that might lower profits?
Our esteemed host wrote:
What most people don’t know is that the suppliers send out instructions to all of these independent dealers, telling them what to charge, on a daily basis. They are not charging based on what they had to pay for the last tanker of fuel, but on the projections of what the next tanker of fuel will cost.
And it’s a tight squeeze: gas stations see a roughly 1.4% profit margin on fuel sales. They make their money on charging higher prices for coffee, snacks, and the other stuff these convenience stores sell.
This is why grocery stores have to jack their prices quickly, to keep up with inflation, because their profit margins are so small. Gasoline stations and grocery stores can operate on such low margins because they are inelastic demand selling businesses: people need food every day, and people need fuel to get to work five and six days a week. (Before I retired, I worked more Saturdays than not, and I was hardly the only one.)
Dana, Good into to gas station economics. I worked in a gas station in ’76 and saw it there too, even the officious jerks from state of California govt investigating gas stations to see if they were “making too much money” and forcing some to sell at a loss to “give back what they took”.
We have done all of this before. The older people remember. I’m constantly amazed how so many people should know better by now and don’t. The young can be forgiven their ignorance. They didn’t see the 100 Million people killed by communism. Heck, most of them don’t even get to WW2 in history classes any more. But everyone over 30 should remember the collapse of Venezuela after they “voted” for communism. This isn’t rocket science.
Even if a sensible Republican is elected in 2024 — from my keyboard to God’s monitor screen! — he’ll still have only four guaranteed years to reverse policy.
Even with the likes of Al Gore in the Democratic Party, most Democrats were still sensible enough to realize that we need fossil fuels, now, even if we can eventually transition to different forms of energy production in the future.
But now, the boneheadedly stupid left have taken over the party, and even Joe Biden, who was supposedly more moderate than Alexandria Ocasio-Castro and Bernie Sanders, went right ahead and took immediate action which lowered our production and refining capabilities, actions which were hostile to an industry which produces a product that Americans use every single day. Now the oil industry has to worry that, during any four-year interval, stupidity can reign in a way which seriously hurts their industry. How can the oil industry make any sane and meaningful long-term investments when they can be destroyed by someone like the dummkopf from Delaware with the stroke of a pen?
Dana, you’ve laid it out as I learned to understand the service station business. My grandfather started his first station in the early 1920’s and it was connected to a garage. The next was built with the 20’s version of a convenience store. After that, he moved into the garage, auto parts, and recycling business. The money isn’t in gas, gas is the convenience at the convenience store.
Commenter: took immediate action which lowered our production and refining capabilities
Oil production has been increasing since the early 2020 nadir. Refineries were taken offline in response to the decreased demand during the pandemic.
How is Brandon forcing our board fossil fuel companies to make record breaking profits.
Is his reelection campaign being funded by them? Sleepy Joe!!! Stop forcing them to make obscene profits.
Hairy you narrow minded ignorant bitch when prices go up so do profits. Or, the business goes OUT of business. That’s why inflation is so dangerous. It literally causes more inflation.
Your ability to live this long while absorbing zero wisdom should be studied by Harvard.
FJB
Don’t expect John to understand simple economics. By the way, John-why aren’t unreliables making record profits? Do they suck, or what?
By Hahvahd’s mostest famousest student, David Hogg.