Tuesday, April 20, 2010

Gasoline Pricing

Gasoline prices appear to be heading up slightly once more, and may go higher with potential inflation, as the U.S. deficit is mounting.

Gasoline stations earn between 10 and 15 cents on a gallon, on average. When prices climb, gas stations see their profit margins shrink in order to remain competitive. So they earn less per gallon.

Further, their credit card fees are about 2 ½% of all purchases. That is always a significant factor affecting their margins.

Moreover, gasoline prices go up faster than they go down. That is the way supply and demand normally influence wholesale and retail gas pricing.

A fact for which gas station operators usually are blamed when high gas prices occur.

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