Good point Jojapeach!
There is certainly going to be a price disparity depending on region specfic supply/demand. For example, the Dallas-Ft. Worth MSA (Metropolitan Statistical Area) may have been at $4.00 (rounded appx. price) a gallon during record highs. However, a town in a different state may have only been $3.00 a gallon during record highs. We can assume that the gas companies were making profits during record highs. We can also research online and determine that companies like Exxon-Mobil made record earnings during the 1/4 end financials at the time that oil was at it's record highs. So the question is what is different between the time that the barrel to gallon ratio was at it's peak vs. now? Let's go back to the original equation. Take whatever your gas price high was and divide that number by 145. Whatever number you get take that and multiply by 96. This is where your gas price should be assuming that the gas station hasn't changed anything on how they are making money (i.e. overheard, charge of food items, beer, etc).
AGDEE points out, we know that the role of weather and it's impact to the source is determinant in figuring volatility. But even when that's factored in we still quite a spread.
This is good stuff. Thanks everyone.
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Originally Posted by jojapeach
^^^ Same here. I paid as low as $3.47 in the Atlanta area. The price of a gallon of gas was dropping almost daily. However, I'm confident in saying that the price that we pay at the pump was dropping at a slower rate than the price of a barrel of crude oil.
I call price gouging because gas stations are making up for lost profits inside their stores. People starting using their money for gas only and would not go inside to buy overpriced candy, 20 ounce sodas, or sandwiches. I believe the stations are making small profits off the gasoline to make up for the drop in retail sales in the stores over the past several months.
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