Paul N

It is possible to transport fuel from SoCal to the bay area, but there is the cost of transport. If it is cost effective dealers will purchase outside the area. However, what happens is the cost of fuel is SoCal will increase due to the increased demand from the Bay area. Eventually the prices will equallize somewhat.<p>Paul

Sandy

I don't know, but they should be much cheaper since they don't have CARB regulations. Getting there will be the pricey part.

Jim Simone

:-)

Sean G

OK,<p>So it all boils down to supply and demand and the present value of the fuel regardless of original cost. To revisit your example, it seems clear that at least for the short term, station #1 realizes a significant windfall and extra profit as the result of an unfortunate event. This windfall only ends when station #1 is forced to by more fuel at the newly increased cost.<p>Economics at work whether we like it or not.<p>Thanks for the info.<p>BTW, just fueled up tonight at $1.79/gallon. Over $26 out the door. :-( What surprised me was that this price was at Chevron but at the ARCO across the street Premium was selling for $1.82/gallon. Normally, ARCO is cheaper.<p>Sean<br>97 1.8Tqm<p><ul><li><a href="http://www.seansa4page.com">Sean's A4 Page</a></li></ul>

Sean G

Re: Great Explanations...Thanks...Another question...

Mike Zamarocy

Sandy, I am sorry about the situation, but I am ticked off at all this cause part of my job IS to drive to all sorts of locations EVERY day! So this hits me REAL hard!!!<p>************************<br>Folks, this is kinda what I have been hoping for! So I HOPE we all can do this together! Perhaps THEN the oil companies won't treat us like SHEEP!<p>Kinda weird getting this tonight! Cause just last night the old movie "NETWORK" was on. Remember when Albert Finney wanted folks to open their windows and shout "I'm MAD as hell, and I'm NOT going to take it any more!!!" Well, this IS FOR REAL, and it is OUR time to say what we feel!<p>> -----Original Message-----<br>> From: P M [mailtom332@XXXXX.com] <br>> Sent: Friday, April 02, 1999 10:50 AM<br>><br>> Subject: Fwd: FW: Lets do it<br>> >Subject: FW: Lets do it<br>> >Date: Fri, 2 Apr 1999 07:24:35 -0800<br>> ><br>> ><br>> >THE GREAT "GAS OUT"<br>> >It's time we did something about the price of gasoline in America! We are > >all sick and tired of high prices when there are literally millions of <br>> >gallons in storage.<br>> >Know what I found out? If there was just ONE day when no one purchased <br>> >any gasoline, prices would drop drastically. The so-called oil cartel <br>> >has decided to slow production by some 2 million barrels per day to drive > >up the price. I have decided to see how many Americans we can get to NOT<br>> >BUY ANY GASOLINE on one particular day!<br>> >Let's have a GAS OUT! Do not buy any gasoline on APRIL 30, 1999!!!!!<br>> >Buy on Thursday before, or Saturday after. Do not buy any gasoline on<br>> >FRIDAY, APRIL 30, 1999.<br>> >Wanna help? Send this message to everyone you know. Ask them to do the<br>> >same. All we need is a few million to participate in order to make a<br>> >difference.<br>> >Thanks<br>

Paul N

Your statement that the windfall, i.e. extra profit, to station #1, is short-term and ends when they have to purchase fuel at the new price is correct. Yes, it is economics at work, whether we like it or not. Station owner #1 certainly likes it. <p>Lets follow what happens when cheaper supplies become available. Initially both stations purchased fuel at $1.50. Now station #2 just purchased a new supply at $1.40. Station #2 is still going to charge $1.50, or slightly lower to get the customers, and take advantage of the windfall. Not until he sees a supply truck show up at Station #1 will station #2 lower prices. <p>Of course, sometimes both stations decide not to make a price change, and keep the windfall. Ever notice that two stations on a corner charge the same price, but 1 mile way they are different? Sometimes it take time for competition to drive prices down. That is why I came up with the term sticky prices.<p>That's the end of today's economics 101 lesson.<p>Paul <p>P.S. I noticed that Arco seemed to be higher, when they are usually cheaper. <p><p>