Fuel prices, Octane and how it is sold

[bmbsqd]

I have a question and I figured someone on here would have some experience with the selling of fuel, maybe even some current/former station owners.

When we go to the gas pump we are typically offered three choices in octane: 87, 89 and then something usually around 92/93.

Like most people (I think), I usually choose 87 Octane for all the obvious reasons. On long trips, and occasionally for various reasons I will fill up with a higher grade. But typically it is 87.

I believe most people do this also, which leaves the higher octane fuels in greater abundance. So, when the gas prices change, and considering that as much 89 or 92/93 octane has not been used....why do those ALSO go up?

I do realize that when a station takes delivery they likely do not fill the higher octane storage tanks as full as the 87 octane since they are not used as much (I think). But still, eventually we have to be paying last today's prices for last month's higher octane fuels considering the rate regular octane is going up. But it would seem that with the higher prices, a large percentage of those who use higher octane on a regular basis would start using more regular octane...which would mean a greater supply of higher octanes laying around in tankers.

Ok, I apologize if I did not make myself clear. Hope someone can give some light to this.

[Horned Toad]

As I understand it say they by 10,000 gallon of 93 octane at X price. Like you said they don’t use as much but every time the gas goes up the price of 93 goes up. So yes that is all pure profit. In the town I live in all the stations are owned by maybe 3 outfits and they got spanked for raising prices twice in one day, which I am told is illegal in AZ. Also what a scam unless you could prove you bought bulk fuel that day. To me its just greed and maybe in the big scheme of things the profit off those gallons is not a lot for the owner, but they already have a profit margin for gas figured in their business plan and that extra profit is above and beyond that.

[Brianj]

I'm not in the gas business. But ask any station owner (I think there are several here), and they'll tell you just how low their margins are on fuel. A couple of pennies per gallon, maybe...I recently read somewhere that profit per pump averages less that $100 a day, and that's at current prices. And as I understand it, if you ain't selling the Red Bull and Slim Jim's inside at the counter, you're in trouble.

Low margins at the pump is the biggest reason that prices at almost all stations are pretty much uniform. There's always someone willing to give up margin to steal your business. But you don't see many "Gary's Discount Gas" locations offering 20 or 30 cents cheaper than the competition, because nobody has that kind of margin to give...

[Matchanu]

Dude, just put some acetone in it.

[GPC]

Dude, just put some acetone in it.

Your joking I hope.;)

[0699]

Dude, just put some acetone in it.

:D :D :D