GAS PRICES!!!!!!!!!!

As some of you know, I have an influence on gas prices in several states. In a nutshell, I develop and drive strategies in markets based on gallon and store sales (and profit).

I know what you are now thinking..... "your the asshole" lol yes... I am. I get threatening phone calls and I am sure I have hitmen after me in 7 states but like my wife always says... it is what it is.

My reason for this blog is just to vent some and explain what is happening a little. Retailers have no control over costs of crude oil or gas. We buy from the refineries at whatever they are charging and then go sell it. 95% of my retail moves are based on strategy moves not cost moves. So until recently, we were enjoying cost and retail drops like crazy and my cars only take 20 bucks to fill up instead of 70 (yes I pay for my own gas). Now that it seems to have hit bottom, our costs went up over 20 cents a gallon in Idaho and Utah and about 50 cents a gallon in Arizona and Nevada. Why???? beats the hell out of me.... its all about supply and demand. The only indicator that I have to try to forecast what is going to happen is what we call a crack spread. I know I know.... crack spread.... get your minds out of the gutter lol
Crack spread is our estimate between what the refineries pay for crude oil and what they sell the refined product to us for at the rack. Generally, the crack spread (estimated refinery profit) floats around 15 to 30 cents a gallon. Right now its about a penny. So if I had to guess, gas will go up another 20 cents a gallon pretty soon..... but really who knows. Its like throwing darts at a dart board.
"Why is cost and retails going up when crude oil is still cheap and even dropping"
My best guess for this is that all the refineries last year had to forecast and contract estimated crude oil they were going to use this year. When demand dropped so bad the refineries were swimming in product and had to sell it cheap and below their cost to blow it out. So as consumers, we enjoyed cheaper than the national average prices because of the refineries over ordering. Now that supply is getting back to normal, the refineries are bring cost back up to where they are making a profit and hence the big retail moves lately.

So after yesterdays retail moves I had to go have a few drinks with my beautiful wife and forget about work for a while. I didn't have enough to drink to drowned it out though dang it... although I gave it a gallant effort. I will have to try again Friday night lol


This is a picture of our brand new Prescott Arizona store. Way kewl