[Mgs] new question

[Paul Root]

Recently, one of the TV investigating reporters did a story on
how Super America manipulates any market they are in with
yo-yo pricing of gas. This summer it would jump up 15 cents
a gallon over night, and 4 days later drop 10 cents.

The study compared to markets that were about the same size,
Minneapolis/St. Paul and Cincinnati (I think).  MSP having  
SuperAmerica (Speedway),
and Cincinnati not having them. Over all, the long term,
the average price was the about the same, but while Cincinnati prices  
did small increases
or decreases, as the market actually bares, MSP had huge swings in  
prices.

Wisconsin State law allows only 1 price change a day for gas. I've  
seen the SA near us have
4 different prices in one day. Just seeing what they can get the  
competitors around them to
swallow.



On Sep 23, 2007, at 11:32 AM, David Breneman wrote:

> --- Paul Hunt <paul.hunt1 at blueyonder.co.uk> wrote:
>
>> There is no direct connection between wholesale oil price and
>> domestic
>> prices charged for energy.  Like a dog licking its privates (it
>> does because
>> it can), while the energy companies can charge more for the latter
>> on a falling market for the former, they will.
>
>
> As would anyone in their position.  People seek their maximum
> utility.  Just as gasoline sellers want to keep the price high,
> gasoline purchasers want to keep it low.  The market is always
> seeking an equilibrium between these two forces.  As long as
> there isn't collusion in groups of sellers (cartels) or buyers
> ("windfall profits" taxes) the market will find that equilibrium.
> If the sellers push the price too high, they'll be stuck with
> tank farms full of unsold gasoline.  If the buyers push it
> too low, they'll be faced with shortages as the price falls
> below the cost of production.  Look at an analogy from your
> own life - suppose your boss called you in and told you the
> company was having a hard time finding new employes so he
> was going to give you a raise as an incentive to stay on.
> Would you say, "Oh heaven's no!  I'm already charging too
> much as it is, and I'm sure you resent paying so much for me!
> I simply cannot accept the money, even though my MG needs
> a transmission rebuild and my kids need braces, I just
> can't accept another dime!"  The chance of that scenario
> playing itself out would be... ?
>
>
> David Breneman         david_breneman at yahoo.com
>
>
>
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Paul Root
ptrmgb at gmail.com
77 MGB
99 OBS