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Re: Questions on Diesel vs Gasoline Prices
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Posted by Alberta Mike on January 13, 2005 at 06:59:26 from (64.42.242.24):
In Reply to: Re: Questions on Diesel vs Gasoline Prices posted by thejdman01 on January 12, 2005 at 19:39:00:
Service stations are just part of the whole "inventory" within the gasoline market when it comes to pricing. When a price goes up or down, before the change at the pumps, computer or gauge readings are taken at the station to determine how much gas is left (or has been sold) at the previous price. For example, if an operator had 2672 gallons left at yesterdays price and the oil company decided that a price change (up or down) was going to happen, then the "refinancing" of the remaining inventory would be done by the computer system. In other words, what the operator is paying for the gas remaining in his storage tanks can actually change up or down even though it is already in there. You are saying that 2672 gallons of fuel should be sold off first at the old price (which probably makes sense) but it doesn't work that way, even when prices drop. If there is a price increase, the operator owes more for what's left and if the price drops, he pays less.
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