Price of a barrel of oil compared to the price at the pump. When oil shot up - pump prices immediately?

followed up. When I asked why, I was told that the pump price reflected the price that they had to buy it at, not the price of the gas in the underground tank that they already bought and paid for at a much lower price. Well, if that is true, then why isn't the pump price falling immediately also? Is it so the oil companies can suck out as much profit as possible?Price of a barrel of oil compared to the price at the pump. When oil shot up - pump prices immediately?
The gas stations price their gas on the cost of their next tank fill, not the previous one.


If they didn't take in enough money on the current tank to fill up again, they would be out of business.





They are not setting the price. They are dealing with the fluctuations in cost the same as we are.Price of a barrel of oil compared to the price at the pump. When oil shot up - pump prices immediately?
I agree. I recently heard someone claim that the price remains high at the pump so the retailers can make back some of the money they lost when prices went high. That doesn't make much sense to me either..
It's easy to blame oil companies, but it goes deeper. It depends on what region of the country you are, how close is the nearest oil refinery, and even how many independant gas stations are owned in your town.





I've started to see the prices coming down, so I'm not sure where you live, but it keeps coming down in San Diego.
Yes, and we think this is called capitalism..and it is truly the way of this world..even the Chinese bow to the law of supply and demand..even Castro has to pay the fidler
The oil companies make the same profit margin percentage, regardless of the price. The price doesn't drop immediately because of speculation.
Excellent question. It's called ';sticky price.'; The retail price follows wholesale prices but lags by a week or more both on the way up and on the way down. Generally retailers' margins are squeezed on the way up and are made up on the way down.





There are many reasons for this but it's always been that way.





Retail gasoline prices don't automatically track crude prices, there are a lot of steps and factors in between - though for the last 4-5 years the rising price of crude is the primary factor in the rising price at the pump.
So you just figured out that gas companies are responsible for prices at the pump?





Wow...uh, welcome to reality. Glad to have you along.