gasoline prices

[EE-BO]

Originally Posted by texas*princess

I've heard about it both on radio & the news... but I can't tell if it's affecting the gas stations that I go to. Can someone please explain how it works?

e.g. - I walk up to the pump, the little digital reads above the grade levels read 3.89, 3.99, 4.10 for regular, plus, premium. If I swipe my credit card, is the digial read supposed to change to say 3.99, 4.09, 4.20 if there is a credit surcharge? Or does it stay the same and my card is just charged more?

And can someone explain to me why convienence stores are adding this charge BY THE GALLON? That doesn't seem to make sense to me. I thought the CC-companies charged a flat rate to the store per transation for "using the CC service". Is that not how it works?

And if this is such a huge burden (I can see how it can be for small locally owned stored hence some places that say you can only use a credit card for purchases over $X), why don't they charge EVERY transaction the store makes (random soda/beer/candy/chip purchaces) and not just the gas expenses?

Credit card fees from a merchant to the credit card company are structured as a base transaction fee plus a percentage of the total sale. This is why many stores require a minimum purchase of a few dollars for you to use a credit card.

It varies by card, but generally speaking the basic fee is 29 cents per transaction plus 2.9% of the total charge. For volume sales- at levels that would apply for your average gas station- the fees go down, but not much. For moderate volume, 2.3-2.5% of the total charge is common with a 25-28 cent fee per transaction.

As for how the cash discount works- it is legal to offer a discount off advertised prices for certain forms of payment, but it is illegal to charge an additional fee for certain forms of payment. The end result is the same, but how you go about it is what matters.

If you want to charge $4.00 a gallon for gas and actually get that amount after fees on customers who use credit cards; it would be legal to charge $4.05 per gallon and offer a 5 cent discount per gallon for cash, but illegal to charge $4.00 per gallon and charge an extra 5 cents per gallon for credit card purchases.

As for the random soda etc. purchases you reference, that is not quite such an issue for a great number of reasons. Point being- the markup and real profit is in non-gas items. So credit card fees do not matter so much.

Think about it like this, when was the last time you saw a gas station that only sold gas and did not have a food mart or mechanical repair services? Gas-only stations don't exist anymore since there is not sustainable profit in selling only gasoline.

[luv n tpa]

Bush to lift symbolic offshore oil ban
Posted: 10:19 AM ET
WASHINGTON (CNN) — President Bush will announce Monday he is lifting an executive ban on offshore oil drilling, the White House said.The move is largely symbolic because there is also a federal law banning offshore oil drilling. Bush has been pushing Congress to repeal the law passed in 1981.
Bush’s father, President George H.W. Bush, signed the executive order in 1990.

[jon1856]

Originally Posted by luv n tpa

Bush to lift symbolic offshore oil ban
Posted: 10:19 AM ET
WASHINGTON (CNN) — President Bush will announce Monday he is lifting an executive ban on offshore oil drilling, the White House said.The move is largely symbolic because there is also a federal law banning offshore oil drilling. Bush has been pushing Congress to repeal the law passed in 1981.
Bush’s father, President George H.W. Bush, signed the executive order in 1990.

Besides the law, there is also a matter of production equipment.
Or lack of it.
The ships that are used, that are needed for deep sea exploration and drilling do not currently exist. The ones that do are in use and new ones are still in dock yards in China being built.

Than there is the matter of once the oil is found and drilled, where does it go?
Companies can sell it anywhere they wish to, just because it is found off of US does it mean that it will go to US market.

And where ever it does go, what about the refineries?

Are there any more of them being built?

List could go on further but as OP said, this is all rather largely symbolic.

FYI:
1958: Gas was .30
2008: Gas over $4.00
Per AutoWeek as part of their 50th anniversary issue.

[AGDee]

Originally Posted by jon1856

FYI:
1958: Gas was .30
2008: Gas over $4.00
Per AutoWeek.

Cool website: http://www.fiftiesweb.com/pop/prices-1958.htm

1958: Average Income: $4,650.00
2006 (most recent I could find): $48201.00

[texas*princess]

EE-BO, thanks for the explanation

Re: offshore drilling, Bush is a moron to think this is going to solve the problem. It's a temporary solution to a very permanent problem. All environmental reasons aside, it is just delaying the inevitable. This isn't going to decrease our dependance on oil and if he thinks oil is the only thing affecting the economy he's a lot dumber than I thought.

[TexasWSP]

Originally Posted by texas*princess

EE-BO, thanks for the explanation

Re: offshore drilling, Bush is a moron to think this is going to solve the problem. It's a temporary solution to a very permanent problem. All environmental reasons aside, it is just delaying the inevitable. This isn't going to decrease our dependance on oil and if he thinks oil is the only thing affecting the economy he's a lot dumber than I thought.

Nobody is looking at this as something that will be responsible for solving the problem. It's something that can and will help out. We will always have a dependence on oil so long as there are no viable alternatives. Thankfully, those are heavily in the works. In the meantime, being able to produce more domestic oil will alleviate some stress for many and absolutely alleviate some of our dependance on foreign crude. Lucky for us, this "temporary solution" is one that could be effective for many, many decades.

[texas*princess]

Originally Posted by TexasWSP

Nobody is looking at this as something that will be responsible for solving the problem. It's something that can and will help out. We will always have a dependence on oil so long as there are no viable alternatives. Thankfully, those are heavily in the works. In the meantime, being able to produce more domestic oil will alleviate some stress for many and absolutely alleviate some of our dependance on foreign crude. Lucky for us, this "temporary solution" is one that could be effective for many, many decades.

Even if they started "exploring" tomorrow, it would take anywhere from 3-5 YEARS for that to affect prices.

And even if this is something that does provide a solution for a few decades, what about after that? And what about the other ramifications this causes?

Considering you have told us on more than one occasion that you are in the oil industry, that doesn't exactly make you an unbiased person.... how much was it Exxon made in profits last year? 92-Billionish?

[texas*princess]

gas prices here down to about $3.94/reg