Posted by: Cartoon Pig Dog | July 3, 2008

Honest advertising? I don’t think so.

(For those who don’t already know me, all towns mentioned below are in Pennsylvania, not that it matters, it would be the same all across the country.)

 

I really don’t have anything important to say here, just thought I’d share this with you because it kinda pissed me off yesterday.

I went to Wilkes Barre yesterday to pick up a few things for a camping trip this weekend and stopped in West Nanticoke on my way home to fill up my gas tank. Like most people these days, I watched the little signs by the road looking for the lowest price between Wilkes Barre and Shickshinny. The prices I passed ranged from $3.97 to $4.05 (lowest grade, of course). Then I saw a sign at a station in West Nanticoke that said $3.93, still extremely high, but that’s how it is for now, we are being robbed blind by the richest men in the world.

So anyway, I pulled in and stuck my little piece of plastic in the card reader slot and pressed the select button for the cheapest grade and then the little numbers on the price immediately changed from $3.93 to $4.01, an eight cent increase in less than a second. I thought for a second that in my constant state of confusion I must have pressed the wrong grade (not realizing that the next grade was $4.03 not $4.01) so I hung the nozzle up and started over, and it happened again, the $3.93 once again changed to $4.01. That’s when I looked over to the other island and noticed a little sign sitting on top of the pumps: ” $3.93 per gallon Cash, $4.01 per gallon on cards”

Ok, so giving people a break in price for paying cash can at times be a good idea. But you should make that clear to the customers BEFORE they pull in and start pumping. It also then occurred to me that if they can still make their profits at $3.93, then why charge over four bucks for anyone, cash or charge? They still get their money either way.

So now, while I still blame the oil companies and their record profits every quarter for gouging us on oil and gas prices, I now see that even the individual stations are doing their own bit of gouging too. If that station can still make profits at $3.93, then so can the others. So they are gouging us by at least eight cents at almost all of them. And most of us can’t afford it even at the lowest prices you can find out there today.

Remember when your car was considered a major investment and once you paid the big money to own it you had years of fun ahead of you with it without making any more major purchases to enjoy it. Now the monthly payments on some cars are less than what it takes to fill it up one time. My car costs right at fifty bucks to fill, but I have a fairly small tank. It’s not at all unusual to see a pickup pull in and cost over a hundred and fifty bucks to fill. That’s a very large chunk out of anyone’s weekly paycheck.

They can keep on blaming the cost per barrel (at $140.00 today) for the high prices, but considering the amount of gasoline made from each barrel (28 gallons from a 42 gallon barrel of oil) they make back $112.00 per barrel at $4.00 a gallon for gas (this is a low estimate, as $4.00 is more like the National low rather than the National average, many areas are already over $5.00 per gallon). Actually, this amount would be closer to $120.00 because diesel is more expensive and of that 28 gallons 19 is regular gas and 9 is diesel. Then they make 4 gallons of jet fuel which retails at about $8.00 a gallon, which makes back another $32.00. Then they make 2 gallons of heating oil, two gallons of heavy fuel oil, two gallons of liquefied petroleum (LPG gas), and 7 1/2 gallons of it goes into the production of many other items such as tar, asphalt, tires, kerosene, and even color crayons. By the time you figure out how much goes into each item (I went through it, but there’s way too many numbers involved to go through each separate item and their amounts and prices on here) and the profits made from each gallon of crude involved, you end up with just over $300.00 made back from each barrel of crude, that’s over a 100% profit from each and every barrel, and most of that profit goes right into the pockets of the oil business executives. At the retail level, the individual dealers make less than a  7% profit from their oil products.

Ok, now for those of you who are good at math and noticed that my breakdown of products adds up to more than the original 42 gallons of crude oil. This is another one of the benefits of the refining process. Without having to actually add anything to the oil, it just naturally expands during the refining processes, giving you more total gallons of the finished products than the amount of crude you started with. Think along the lines of making popcorn, it puffs up when it’s popped.

Somewhere here I got off track from my original post. Which is, why are stations allowed to advertise one price by the road, then once you are lured into it, drop the condition on you that you have to pay cash to get that price?

If anyone knows the answer to that question, I’d love to hear it, because I think it’s very unfair to the consumers who may fill their tanks before they notice the price change.

As for myself, I just went and took the money out of the ATM and payed cash. What would you have done?

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Responses

  1. It’s actually pretty simple. You are correct that the retailer makes a small margin on the sale of gasoline. What you may not be aware of is that the retailer pays the credit card company/transaction processor approximately 2% on all credit card purchases. This probably doesn’t lessen your frustration over not knowing the advertised price of $3.93 was only for cash purchase ahead of time, but this is where the 8 cents comes in.

  2. Thanks totals, I totally forgot about the credit card charge that the stores pay, I knew that, just didn’t think about it (mind doesn’t always click right when you’re pissed). Of course that kinda pisses me off at them, too, because they already make a fortune off of us with their interest rates, some cards charge as much as 23% interest on time payments which is why I try to pay all of my cards off every month, can’t always do it, but it makes a hell of a difference in interest charges when you do.
    Then last night I got to thinking about that 140 dollar a barrel oil and the profits made back from it, and then I realized that their profits are actually much higher because they don’t have to pay that amount for every barrel, just the ones they buy from other countries. We are still one of the top five oil producing countries in the world and our own reserves contain enough to last several years without pumping any more at all and yet we still pump roughly 5,102,000 barrels per day, and that already belongs to the oil companies here and the cost of pumping is minimal compared to the amount pumped.
    The other day I saw a guy on TV that was representing one of the big oil companies and he was asked to justify the overwhelming record profits they have been been recording every quarter the past couple years. After a few seconds of ho-humming, he started mumbling something about their costs in shipping and refining etc. BULLSHIT, costs like that are a part of every business, but profits are what you make AFTER all of those costs are covered, so he sat their and lied by saying they needed those profits to cover their costs. They needed those profits in order to continue making sure that all of their executives remain billionaires.

  3. And now I just got a bit more pissed off at the banks, they charge retailers for processing the cards they already make a fortune off of, and they don’t actually process any of them, that’s all done by computers and servers online without any help from people, so there is no labor involved (other than server maintainance). Go to your bank and ask for your account balance, there’s not a single person there that can tell you, because none of them figured out your balances, they have to ask their computer first.
    The only honest business there is in this country is the change machines at laundry mats and car washes, you put in a dollar and you get a dollar back. I used to picture the owner of one of those machines counting what’s in there at the end of the day and saying “Wow, I broke even!” (of course they get paid by the owner of the laundry or whatever for the use of the machine)

  4. Hello.
    Unconventional good sturf here. I normzlly don’t find notghing but junk but when I get something I know my people wlil like I link back. This is good stuff and I hope yuo doon’t mind if I add a link back to you from my website


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