Remnant fuel stations

[flowmotion]

My question is how vertically integrated are these gasoline station chains?

Not as vertical as you'd think.  Most gas stations are owned by franchises, jobbers, and independents.  They buy gasoline and diesel from whichever refinery is convenient and add the corporate additives at the station.  That includes Chevron and any other name brand station out there.

I guess that's why I can't get into gas station branding anymore. When I was younger, I assumed it was global Fortune 500 corporations battling out for consumer loyalty. Knowing that it's just a bunch of small-timers going with the lowest bidder removes my interest.

[roadman65]

In Ida, LA on the SE corner of US 71 and the one traffic light before the AR State Line there is a current Exxon Station there with an old style Esso sign from years back when Exxon was Esso that was the kind that was not backlit like today, but most likely had a spotlight shining on both sides of it during its haydays.

[US71]

In Ida, LA on the SE corner of US 71 and the one traffic light before the AR State Line there is a current Exxon Station there with an old style Esso sign from years back when Exxon was Esso that was the kind that was not backlit like today, but most likely had a spotlight shining on both sides of it during its haydays.

[roadman65]

That is a cool photo.  They do not make signs like this anymore. 

[US71]

That is a cool photo.  They do not make signs like this anymore. 

Yeah, they're all squares with logos now. I guess it's so if a station re-brands itself, they just have to pop out the logos and not replace the signs.

[Desert Man]

When gas stations are not as plentiful than they used to, the price of gas increases when less competitors are present. In California abotu 20 years ago, the major oil companies lost many gas stations from the state's tighter "anti-smog" controls and thousands of "mom and pop" shop franchises closed when they're inable to upgrade the pumps to the new standards. The price of gas in the 2000's was a wild roller coaster with price spikes to nearly killed our national passion for cars and road travel, as well negatively impacted the commercial airline industry.

[kphoger]

When gas stations are not as plentiful than they used to, the price of gas increases when less competitors are present. In California abotu 20 years ago, the major oil companies lost many gas stations from the state's tighter "anti-smog" controls and thousands of "mom and pop" shop franchises closed when they're inable to upgrade the pumps to the new standards. The price of gas in the 2000's was a wild roller coaster with price spikes to nearly killed our national passion for cars and road travel, as well negatively impacted the commercial airline industry.

Though I'm certainly no expert, my first reaction is to doubt that increases in pump prices in America are at all due to lack of competition.  We have a zillion different chains here, and gas stations at nearly every major exit and neighborhood.  While lack of competition may drive up the price of gas in one particular location (say, an exit with nothing around for 40 miles in either direction), I would need some convincing to believe that that happens nationwide.

It also sounds like you're suggesting that the higher gas prices in the 2000s are also due to lack of competition.  Maybe there was a break between two separate thoughts there that I missed, as it was a struggle to follow your post grammatically.  I do agree that it has affected the way we think about cars (though not necessarily our passion for them) and the commercial airline industry.  For our family of four, flying is pretty much a non-option due to the price of airline tickets.  But, were I still single, it would still be a viable option.  I'd be interested to hear people's take on how gas prices have affected the long-distance bus industry.

[StogieGuy7]

I find it fascinating how the price of gas always goes up in 10 to 25 cent per gallon increments, but drops penny by penny! 

And, upon rising, the price is magically the same at every single gas station within a 20 mile radius.   I've always found both things to be very suspicious. 

[kphoger]

I find it fascinating how the price of gas always goes up in 10 to 25 cent per gallon increments, but drops penny by penny! 

And, upon rising, the price is magically the same at every single gas station within a 20 mile radius.   I've always found both things to be very suspicious. 

If I ran a gas station and had the freedom to set my own price, I doubt I would do either of those two things any differently.  With an increase in market price, I would be eager to raise the price to match; with a decrease in market price, I would be hesitant to drop the price too much in case it's just a short dip.  If the other 19 stations around me were jumping to a certain price, I would be hesitant to raise mine by much less than they were, assuming there's a reason for their big jump.

[formulanone]

That's because they buy the refined crude oil on the open market, so they raise prices in anticipation of future prices. Basically, the station (or group of stations) already bought the quantity of fuel already at a certain price. There's all sorts of investors and strategies that essentially decide on that -- I won't pretend to even halfway understand that -- essentially predicting potential shortages based on a fairly level but a very-slightly sloping demand curve.

In order to keep happy medium of fuel storage, the price can also be volatile; it's a commodity like many others on the open trading market. On one hand, the station does not want to run dry (lost business), but they can't just keep extra supplies "in the back room" (depends on how much underground storage you can fill, and that's it). If the station has now bought "overvalued" (overpriced, to us) fuel, they still want to make a profit, but they have to essentially make a bit of a stand off with the local stations in order to be competitive. But if it's an area with lots of gas stations, or the only site for some distance, the prices can vary a bit based on scarcity or convenience. If they bought lots of "cheap" gas, they're making you pay more for the expectation of future gas prices, since now they have to buy it at a greater rate with the next shipment.

That's how I understand it, basically. This "stand off" scenario plays out due to a lack of complete regulatory control (outside of local, state, and federal taxes), for better or for worse. On the other hand, I haven't taken in account whether the fuel supplier has forced pricing contracts, et cetera. I'm not much of an insider or economist, either.

But I've also heard that the big profit maker is the convenience store inside; the gas pumps are the kind of guarantee that you'll be back and will hopefully pick up some milk or chips or beer, and don't want to make the extra trip to the grocery store just for one item. Without the pumps, there's usually less demand for the items in the store, unless you're also the only grocer for some distance.

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Saw this just south of Walker, Iowa...not really a remnant (too many competitors in one place!), but still neat looking:

[Road Hog]

I find it fascinating how the price of gas always goes up in 10 to 25 cent per gallon increments, but drops penny by penny! 

And, upon rising, the price is magically the same at every single gas station within a 20 mile radius.   I've always found both things to be very suspicious.

I've ID'd a few stations in my area that tend to "lag" whenever the price spikes, and I go there to fill up immediately.

[msubulldog]

Sinclair is still here and there -- saw one this summer in a tiny town in Idaho -- but used to be much bigger. 

There are a couple in Northeast Mississippi:  West Point, Houston, and Pontotoc. There used to be one in Eupora as well.