Gas Prices

Why are gas prices so high? I have heard this a lot. Especially since gas stations prices seem to increase overnight at their whim, not in relation to when the tanker pulls in. Well here are my thoughts.

First, gas stations do not make money selling gas. Or to be more precise, they don't make much money. They're like movie theatres. Movie theatres send most of their gross to the film companies and make their real money on concessions. Gas stations generally make a lot more money off their convenience stores or, back in the day, service center mechanics than they do actually sell gas.

So why do the prices change so much and so suddenly? Well I believe the answer is that the gas stations are not selling their gas for the price they paid for it on the last tanker truck. They are selling the gas for what it will cost them to replace it on the next tanker truck. Otherwise they would be effectively taking a loss when the price of gas is on a steady increase like it has been for years. It is a speculation thing.