Re: Questions on Diesel vs Gasoline Prices

Posted by john in la on January 13, 2005 at 18:08:54 from (67.35.235.16):

In Reply to: Re: Questions on Diesel vs Gasoline Prices posted by Alberta Mike on January 13, 2005 at 12:58:47:

First there are those that do not own the store. Lets say it is a Exxon station. Exxon owns the land; tanks; pumps; building; ever thing. The owner only rents the place. Exxon puts its fuel in the tank and the owner pays for it as it is pumped per gross gallon.

Then there is the guy that owns every thing but the tanks. He contracts with a local supplier that puts his tanks in the ground. The fuel is paid for as it is pumped. That way if the tank gets a leak it is the tank owners problem and not the small town mom and pop that own the store. They buy in gross gallons.

Then there is the small local store owner that owns every thing including the tanks. He buys his fuel from a local jobber or bulk plant owner. He pays for his fuel when it is put into the ground. He buys in gross gallons.

Then there is the big user. (owns several stores; is a jobber; ect) He deals in several truck loads a day and has a account set up with the supplier to have his stuff loaded at a loading rack. He pays for the fuel the second the driver pulls his loading card from the rack computer. It is automatically deducted from his bank account. He buys in net gallons.

Then there is the supplier. This is usually the refiner but can be some one that buys fuel on the stock market in very large blocks.
They do not have to have a loading rack in every town because they work on a exchange basis. Say you and I were suppliers. I have a loading rack in my town and you have one in your town. I would let people buy from you and load here if you would do the same for me. At the end of the month it works out that we are about even and owe each other nothing.

Like I said you can write a book on the subject. This is NOT every possibility but shows you how some work.

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