The Wal-Mart Weekly: No rollback on gas prices

You are being unduly harsh about Wal-Mart. In my town Wal-Mart had the lowest gas prices since Thursday, September 11th. If you want to talk about gouging, a local oil company that owns five stations went from $3.799 per gallon on Thursday and Friday a.m., to $4.999 by Friday midday and continuing through Sunday a.m., then went to $4.299 and remains at that price at present.

Market pricing is not nonsense. When demand spikes for a product, the price should rise for several reasons, all of which benefit everyone. First of all, one problem with rising demand is that the existing supplies of the product will be exhausted too quickly, causing a shortage. I understand that you only want what's best for consumers, but how happy do you think they will be when they arrive at the pumps and find out there is no gas left to buy because of your proposal of keeping the price down in spite of high demand? Also, higher prices will bring more product more quickly if competing stations are able to order more supplies at a higher price. This is a basic economic concept: Price ceilings cause shortages. If it's possible to make money without running out of gasoline, the stations across the street could simply beat them by a few cents and get a large portion of their business. There is no need to impose fines and laws, the market does this with precision on its own. Besides these reasons, the article also points to lower oil prices as a reason the price at the pump should be lower, ignoring the fact that 20% of the country's refining capacity was in danger of being harmed by a hurricane. This caused an increase in the price of wholesale gasoline.

The way I understood it was that companies that sell gas like the station down the block cannot raise or drop these selling price until the next truck load arrives. I guess I was wrong and there are a lot of towel heads out there making a killing in more ways than one...

Raising prices when demand goes up is gouging? Gas stations need to have enough cash to buy the *next* delivery. It doesn't matter what they paid for the gas they already have.

If you restrict their ability to raise prices, and they ring up their supplier to find that they can't pay the going rate, then they'll have to buy less gas, and that means gasoline shortages. If I'm fleeing a hurricane, I'll pay $10 per gallon if I have to. I'll pay whatever it takes to make sure there is *plenty of gas in the storage tank* when I'm ready to fill up.

Not Funny......since their gas is being delivered
at approx. $2.60 a gallon.

Mr. White here speaks against the market and for government intervention. Never mind that the only true "gouging" comes from government. Another point to make here is that the appropriately higher prices also ask the consumers to conserve resources.

listen you fools, if you think you can make a profit at a lower price, THEN DO IT!!

I wonder why competitors don't lower their price and put the greedy, gouging wal-mart out of business? Oh, because they have economic sense and understand basic supply/demand.

in most states a station can only raise a price 1 time during the course of a day, usually that time being prior to the station opening or 8am (for 24 hr stations and automated stations)

if a station raises their prices more than twice in a day they can be fined by the company that owns the station as well as be investigated by weights and measures as well as other state/federal oversight groups

Where did you get your facts about Wal-Mart's current gas prices?

Nationwide, Murphy Oil is only one of several Wal-Mart and Sams gas surpliers and these companies' prices allow Wal-Mart and Sams to deliver the lowest prices in most parts of the U.S. day in and day out.

I've driven about 500,000 miles in the last 10 years in all of the lower 48 and I watch gas prices like a hawk. For the past three weeks I've been in Arizona.

I've read most of your Wal-Mart comments
during the last year and a half and you see something in a Wal-Mart store you visit and rationalized that represents all Wal-Mart stores.

Wise up.

Joe Boyle
Cheyenne WY

Gas is delivered to gas stations at approximately $2:50 to $2:60 per gallon. The 'friendly' station on the corner then jacks it up to provide them with maximum profit. Don't be a fool and believe the $0.05 cent profit we are being fed by the industry. Since when did they ever tell the truth? Gasoline profits for the retailer have never been higher but the lazy parasitic liars cry, piss and moan that they aren't making enough. Greed has taken over every aspect of American business encouraged by Wall St. The new watchword is 'screw everybody' and let's rake in maximum profit.

9-15-2008 @ 9:06PM

andrew said...
I wonder why competitors don't lower their price and put the greedy, gouging wal-mart out of business? Oh, because they have economic sense and understand basic supply/demand...................
LOL. Supply and demand regulating the price of gas ? What planet are you talking about Andrew ?

Gasoline price is not directly connected to crude oil price. Shortly before the hurricane hit, most of the refineries in the area were being shut down to minimize any damage.

Walmart doesn't sell a drop of gas other than what it sells at Sam's Club. Gas at it's stores is sold by Murphy USA, an independent lessee of the space they occupy. Also, many states have rules that prevent chains from selling fuel below wholesale cost, as an attempt to prevent them from bullying smaller players out of the market.