Quote:
Originally Posted by CU Tiger
Regardless if you buy it at 3.099...why sell it at 3.15 if you find it reasonable to sell it at 3.55 two weeks later.
You have no carrying cost, your lost revenue is minimal and on a couple thousand gallons .40 adds up
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Your lost of revenue is not minimal. The functions of gas stations at Cstores is not to sell gas, it's to get people to go inside and make impulse buys (A pack of smokes, a bottle of Arizona Iced Tea, a candy bar, lottery tickets, etc.) and to get people to come to that store to make regular Cstore purchases (since you provide them with two things they need, not just one). If you shut your pumps off (giving your customers only one thing they need), you are turning away a sizeable portion of your instore profit (since now they go down the street and get both gas and Cstore items somewhere else). It's the same reason stores like Best Buy will sell certain items, like CDs, at a lose. They take a high demand product, sell it for close to cost or even at a lose, to get people to go into the store and buy something else (that provides a high return).
Even if gas prices were to increase 40 cents in 2 weeks, which would be an incrediblly astronomical amount in that short of a time frame, he probably still loses more instore profit in those two weeks they are off (plus some profit in the weeks after since some of his regulars get used to going elsewhere) than he makes by playing speculation with gas prices and "hitting it big", which in your example, would give $400 per thousand gallons sold. If he has a 10k gallon tank, and he manages to sell it all in that one week, that's a $4000 return on an very improbable rise in gas prices, and I bet he loses more than $4k in profit in those two weeks from lose of instore business.
And that doesn't include the PR hit he'll take as the guy who let his pumps sit empty for 2 weeks while everyone else was able to keep up with demand.