Re:Commodities Are Crashing Like It's 2008 All Over Again
by Cshelton on Thursday August 06, 2015 @04:30PM
(#10019209)
Gas stations and airline fuel charges have always been first to rise, last to fall. It is confusing when you see oil drop like it has then see the price across the street go up 5 cents tomorrow. Could it be fixed, yes, do they have much incentive to do it...no.
Re:Commodities Are Crashing Like It's 2008 All Over Again
by r-n on Thursday August 06, 2015 @04:39PM
(#10019281)
As far as gas stations go - they make most of their money by lagging behind the fall in oil prices. They make an extremely small profit most of the time and a larger profit when oil prices fall.
Gas stations usually operate with the gas almost as a loss leader for the attached convenience store.
The markets go down on tumbling oil prices. I mean I see why oil companies go down. It's lower profits and, worse, as oil becomes harder to find the technical cost of extraction goes up. There are I'm sure many fields where the technical extraction cost is pushing if not exceeding $50/barrel.
Yet this is actually good for pretty much everyone else. Oil is one of those things that's an input cost into almost everything.
So why aren't the markets talking about how this is going to be better for particularly high oil consumption industries? Airlines spring to mind.
Actually, side rant: the so-called "fuel surcharge" airlines charge is such a joke. I wish it were illegal. There is no "fuel surcharge". It just costs more than it used to. Put it into the ticket price and be done with it.
Because you know the fuel surcharge isn't going away when oil prices drop.