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Subject: TWL: Re: SF Bay Fuel Prices at 17 local fuel docks
From: Alex Hirsekorn (alexh@XXX.XXX)
Date: Tue Jan 29 2002 - 11:56:51 EST
----- Original Message -----
From: "Pisciotta, Peter P, BMSLS" <pisciotta@XXX.XXX>
.
>
> Interestingly, the places that were cheap a year ago are at near the top
of the price list now. Since fuel docks are now calling me when they lower
prices this site gets about 800 hits/month for fuel prices alone), I can
only surmise the "cheap" places have grown complacent and are reluctant to
reduce their prices.
Hi Peter,
Another possible explanation is that the "cheap" places discovered that they
were losing their tochuses and raised prices accordingly. There's a cartoon
that depicts a man laying in the gutter, unkempt, and dressed in rags: The
caption reads "I was the low bidder on everything!" I think that just about
everybody with the responsibility for setting competitive prices either has
seen it or will live it.
In the petroleum business (Actually it's probably true in any business) it
seems that there is always someone who wants to "buy" the market with low
prices. That strategy virtually always fails with the lucky operators being
the ones who realize what's going on before they're out of business.
Marine fuel dealers have a different set of calculations than a typical gas
station. In most cases their volume is very seasonal but their overhead
isn't. The survivors are the ones who figure out how to make enough profit
when they are busy to make up for the months when they stay open 8 to 10
hours a day for only a couple of customers.
None of that negates the value of a bit of price shopping. I merely point
out that higher prices aren't always the result of complacency or greed;
Sometimes it's a business necessity.
Sympathetically yours,
Alex
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