Crude is going down, why are gas prices going UP?
As of yesterday (1/2/09) the price of oil went up by 4.3% to $46.34/bbl and the price of wholesale gasoline went up by 4.52% to $1.1105/gal. At those prices the refineries were making a profit of $0.007 (that’s 0.7¢) per gallon. This is an improvement from not long ago when the refineries were actually losing money and may need to cut back on production. I’m mentioning this because the price of oil and gasoline is a complicated affair. Added on to the wholesale price are Federal and State taxes, cost of transportation, and a gross profit for the retailer. If you are a retailer you do not want to buy expensive gas and have to sell it at a loss when prices in your area go down, so you keep your price as high as you can. If prices are going up, you need to raise prices right away so that you can pay for your next delivery of gas. And if you personally want to have a convenient gas station you do not want it operating at a loss. On the other hand most people are like you and are very aware
