President Joe Biden Tweets out an order to the forces that control the price of gas at the pump to drop it…”and do it NOW!” But what President Bossy-Pants doesn’t know about the retail gasoline business can hurt you, and kill the Mom-and-Pop operations that run most fuel stations. Right Angle schools the amateur autocrat in the basic economics of the business.
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38 replies on “What Bossy-Pants Biden Doesn’t Know about Gas Prices Can Hurt You and Kill Mom-and-Pop”
This is hilarious after hearing for months from the Marxist apologists that presidents don’t control oil prices.
Just a minor but relevant point: the gas station should NOT sell gas for the price they paid (plus taxes and overhead) – they should sell it for the price they anticipate having to pay to re-stock their supply. The only situation in which they can afford to sell for what they paid is when prices are falling.
If a station filled its tanks at $3.00 a gallon and sells it at that price (plus overhead and taxes) and the supply truck shows up to replenish the tanks at $4.00 a gallon, the station can only buy 75% as much gas for its customers to draw upon. If the next time the supply truck arrives it charges $5.00 a gallon, the station can only re-stock 80% of the 75% (or 60% of capacity) which they had in storage. Before very many cycles of this their storage tanks are effectively empty
About 25-30 years ago, I often went by an intersection with a gas station on each corner. All but one had a convenience store, and that one had a service bay for four cars. That one died first. That is, it stopped selling gas and expanded to a bay servicing 6 cars. Then the one across the street going east died. Smallest convenience store. Then the one across the street from that died. Fairly small store, and was hard to get out of given only one road entrance and traffic flow. One is left. Biggest store, had access to both streets and on the corner that the main traffic flow went meant turning right into it, and right going out of it. Secondary road (but busy) going east, and right from there led to a main east west road and that lead to an interstate going north and south. Location, location, location.
In Wisconsin we have a minimum markup law that says anything sold has to be marked up a certain percentage, that I think changes based on what is being sold.
The law is from the 1920s or 30s, I’ve forgotten again, and isn’t terribly popular but for some reason whenever it would make a lot of really good sense to do so, no one ever seems to get a bill written up to repeal it. General suspicion is that some lobby groups for grocers or others are behind it staying around.
On the topic of kinds of gas station ownership, I wonder where chains fall on the percentage chart. We have a lot of Kwik Trip stations around that are not franchises, they are owned by the company but since it isn’t a gas company they would buy the fuel from someone else. I suppose they might fall into the “Walmart/Kroger/Costco” group even though they have 7 or 800 stores. Some have changing and shower facilities for truckers and they all have a small selection of fresh fruit and vegetables, hot sandwiches and other decent food. I wonder if the food isn’t what brings people there more than the gas.
Big oil and Bigass, the Kardashians are involved in this?
This will be a repost from a while ago, but with all the new members, it needs to be posted again. In light of this Right Angle’s topic….
“If I wanted America to fail” (I’d begin with energy)
https://youtu.be/CZ-4gnNz0vc
From Free Market America, waaaaay back in 2012 (Who was VP during that time, again???)
Yes, these guys had funding from the energy companies. I don’t care.
The text of this SHORT VIDEO make sense more now then in 2012. Just took the progressives 10 more years to initiate it.
Short video . In fact, I learned about this video in 2012 from…..Bill Whittle, Steve Green and Scott Ott on ‘that other network’ who shall not be named….
“I’d make cheap energy expensive, so that expensive energy would seem cheap”.
Gone are the days when the line was “energy will be so cheap, only the wealthy will use candles.”
So if we’re at war, Biden just provided proof that he’s committing treason by giving the SPR to his son’s business:
https://www.theepochtimes.com/bidens-selling-of-oil-from-reserve-to-hunter-biden-tied-chinese-firm-impeachable-republicans_4586682.html?utm_source=ai&utm_medium=search
HOW LONG must a person bat 1.000 against America’s interests before he’s recognized as being the T-R-A-I-T-O-R that he (it?) is?? I defy anybody to name a single thing Beijing Biden has done that benefitted America. The musical\ 1776 depicts a scene debating whether to include Thomas Jefferson’s description of King George as a “tyrant.” Jefferson’s refusal to strike the word ends with, “King George IS a tyrant. We might as well say so.” This principle directly applies to BB.
In economic discussions with Leftists, I’m usually forced to ask, “Have you ever taken an economics course?” The typical answer is, “Yes.” I then ask, “Did you PASS it?” Again, the typical answer is, “Yes.” I then advise them to “DEMAND A REFUND.”
that economics course likely never mentions Thomas sowell, or any other economist we might tout, so it is not really a course in economics as much as an indoctrination program.
True that. It’s not economics. It’s sophistry. Or as my Aussie ex-wife would put it …
Mutton done up as lamb.
Inflation is much more likely due to Biden’s Federal policies than anything else. Shutting off the spigots of energy in the USA is the biggie. Outsourcing industry, an attempt to make things cheaper at the expense of industry lost at home, is a huge reason, given that so many places are on lock-down for Covid-19. But Biden’s boogie-man is Putin.
Pretty sure that Putin is not the reason for companies not being able to find electricians, plumbers, construction workers, etc. Pretty sure that Putin is no the reason for prices at Home Depot, Kroger, etc are often >40% higher. Is the war in Ukraine a factor? Yep. But it is not the prominent issue.
In plain language, the only way to make a small fortune in a democrat controlled world is the begin with a large fortune.
Not true. The reliable way to be successful in a Democrat controlled world is exactly the same as in any other totalitarian system:
Suck up to those in power. Make them decide they like you, that you’re useful, or (better yet) both.
haha Ok Sam, I stand corrected.
I play poker, not professionally just recreationally. Still, I play and in my lifetime I’ve played literally thousands of hands of poker. I learned something from that game that applies to a lot of other areas in life.
That particular thing is that everyone has a thing called a “tell”. If you play enough poker you learn to spot a “tell” when you see it. It’s something that the other players do subconsciously that indicates when they’re bluffing. Another word for “bluffing” is “lying”. Bluffing is an intentional deception meant to get you to do something you would not otherwise choose to do.
“Tells” can be very subtle. I once had a girlfriend who was a pathological liar. When she would lie her upper lip would sweat. Moisture below her nose and above her mouth was an obvious (to me) indication that she was not telling the truth and it was not something she could control. She never knew she was doing it and I never let her know that she had an obvious “tell”.
Joe Biden has a “tell”. When he changes the pitch of his voice, especially when he drops down to that phoney stage whisper he’s so fond of … He’s lying.
Joe Biden is a pathological liar too. When you see that “tell” you know he’s lying to whoever he’s speaking to. It’s an ingrained habit developed over years of application, it’s unlikely he knows he’s doing it and even if he did it’s unlikely that he could stop.
It’s interesting to note that when he lies, his speech becomes much more intelligible. He rarely if ever mumbles or stutters when he’s lying. This is because he’s actually concentrating on what he is saying because he KNOWS he’s lying.
You’re right that Biden has never had to produce anything. But he’s a master at leveraging his influence to allow his kid to generate massive income which then gets funneled into his personal assets for his benefit. He is a classic example of the stereotypical corrupt politician in every sense.
Let’s bring back this type of gas pump sign. But add some categories.
Someone send this to Joe.
(I think the last part of the chart is over-stated. Probably more like 3%)
The chart got it right. It says 7% markup but in fine print at the bottom it says the profit per gallon is between 3 and 7 cents after overhead.
The “average” size underground storage tank for a gas station is 10,000 gallons. Generally there are at least 4 of these tanks, one for each of three grades of gasoline and one for diesel. In some instances there may be multiples of one grade of gasoline so for instance two 10,000 tanks of regular and one tank each of premium and super octane grades.
At the pump price of $4.09 in your chart it would cost $3.81 per gallon at wholesale with mandatory costs calculated in for the gas station owner.
The “overhead” for the gas is the infrastructure cost of the tanks, lines, pumps, wiring, electrical service, lighting, calibration and inspection, insurance (both for the damage and for environmental clean-up costs if the tank leaks) plus repairs and damages caused by accidents. Like people driving away with the fuel pump hose still in their car tank filler port.
If you look carefully at the pump while you’re standing there putting fuel in your vehicle, somewhere obvious will be displayed a sticker telling the date that pump was last checked, calibrated and certified as accurate. If you don’t see that sticker you should drive away and not buy gas there. Those stickers and the process that earns them is not free either. In Virginia the state Office of Weights and Measures in the VA Dept. of Agriculture and Consumer Services is in charge of that and that is paid for by the State Tax on gasoline and other fuels. Pumps are optimally inspected and certified every 18 months. In reality that figure may vary somewhat due to labor availability and other factors.
So, out of every 10,000 storage tank of fuel @ a retail price of $4.09 per gallon the actual profit for the station is somewhere between $300 and $700 according to the figures in your chart. Profit after costs and overhead is the only wiggle room a gas station has to work with. Even lowering the price to a break-even point only takes 3 to 7 cents off the price of a gallon of gas. Which of course does not allow budgeting for replacing aging infrastructure.
Of course aging tanks and lines create an environmental hazard due to the probability of leaks being directly proportionate to the aging of the equipment. Insurance for leak mitigation and cleanup go up accordingly as the infrastructure ages.
Then there’s also the fact that as prices increase anywhere along the supply chain marginal gas station business operations will be forced to close and fewer stations means higher demand. Which will also drive up the price of fuel.
The point of all this is that even if gas stations unilaterally across the board all dropped their pump prices to the break even point it would not significantly lower the price of fuel to the consumer. The main effect it would have is to present an increasing threat to the environment due to leaks.
So if I know, and can prove, all this then there is no reason at all why the President of the United States of America would be ignorant on this topic. It would have take a minor staff flunky about the same time it took me to look all of this up and do the math. Which only leaves one conclusion …
Joe Biden does know all this, he cannot possibly avoid knowing it. He’s intentionally lying while being willing to risk environmental damage all for political reasons that are obviously deceptive and dangerous. Not only that but he thinks his lies will be effective because we’re all too stupid to dig up the information I just presented above. If there’s anyone here that’s stupid, it is the people who think such an obvious deception will work in their favor.
Wow! Superlative exposition! Thanks.
You are very welcome.
Nicejob with the thorough explanation. I didn’t have the time today to do more than post the chart.
To the point Scott made about family owned stations. I had a gent working for me as a designer/drafters. He was an immigrant from India and he and his wife had a side hustle with a pretzel franchise at the mall.
They used those profits and purchased a 7-11 near a local college that had a few pumps. It was also near a highway entrance. But as he clocked his clientele, he noticed that the commuters who stopped for gas did not come in the mini mart, while the students with the munchies rarely bought gas. So he shut the pumps and had them pulled out, sold them second hand, which made more room for vehicle traffic and easier for foot traffic.
His profits of course went up. He told a couple of friends who also owned similar marts, and they pulled their pumps, too.
Their new loss leader is cigarettes. Which is foot traffic and generally includes the purchase of something else. But something with high profit, like a soft drink or such.
Soon, only Wal-Mart and Kroger and sheetz, which clearly allows for no margin on fuel, will provide fuel centers.
At this rate if we continue on this curve for 2 1/2 more years … Driving will phase from necessity to a hobby only the very rich can afford.
For several years now I’ve been planning on getting a 250-500 gallon fuel tank on the property here so that I could top it off when prices are low and use from it when they go up. Plus it would be very convenient for the generators in weather emergencies.
Now I’m really, really wishing I hadn’t taken a “I’ll buy one when I find one really cheap” attitude and just bought one a couple years or so ago. They sell around here on auctions all the time, the problem is getting one home and set up. Now even if I bought one, I couldn’t afford to fill it up.
Even if I bought farm gas, which doesn’t have road taxes, it’s $4.319 a gallon from my local route fuel delivery provider. That’s well over $2,000.00 for a fill up on a 500 gallon tank.
That tells me the gas station here with a population of 298 makes more profit off the food and other products it sells than the gas. Right?
Absolutely. Gas is just a bait to pull cars in hoping the driver/occupants will come in and buy something more profitable. Or you could, being as you live in a small town, also consider the gas sales a courtesy provided to the community. In your case with a population of 298 much more likely the latter than the former.
Your local gas station is exactly the tier of operator Biden has dead in his sights to eliminate.
Think what it would be like for you, and small towns all across America, if the local gas station has to close due to not their own mismanagement or poor business practices but an unimaginable, irresistible foe the size of the Federal government.
That HAS to be the plan because as I explained above, what Biden says is an outright, easily exposed lie. Why lie? Seems to me one of the major repercussions of that lie is to destroy small fuel station operators.
“He’s intentionally lying while being willing to risk environmental damage all for political reasons…”
The most obvious being that he wants as many gas stations as possible to go out of business.
Yup, that’s the point I made to Barb in reply to her comment above.
If you live in a more rural area and you can’t buy gas because all the Mom & Pop gas stations stopped selling fuel … Even if you can’t afford an electric vehicle or some such pollyanna-ish solution you’ll still drive a lot less and plan your driving to bring you as close as possible to whatever fueling stations remain.
I stand by what I have said for about a year now. They have made clear what they want. They want us:
In other words, they want us to be… Shanghai.
https://www.youtube.com/watch?v=5LouYOdroKs
I agree with you for the most part and I’ve been saying the same thing for DECADES now.
However, what the Left wants and what they get, what they can actually achieve, are two completely different things.
Of course they want all of that. I mean, I’m not trying to be impertinent or belittle you but … Duh. Those things are past obvious.
The only way to get the power they lust after is to achieve those goals. They’re no different in that than millennia of power seeking wannabe tyrants that precede them. The lot of humanity has always been thus, this is nothing new at all.
Our system is intentionally constructed to resist letting them achieve those goals. There is no other political system in the world, or indeed ever achieved in the history of mankind, that has the capacity our system does to resist that kind of tyranny.
THAT is what The Great American Experiment is all about — Can The People rule themselves peacefully and wisely without voluntarily giving themselves over to tyranny?
We are in a position geographically, politically and resource-wise that makes it nearly impossible for a foreign invader to overcome us by the military might of an invading army. If America falls, it must collapse from within. The foes of America have no other viable avenue of attack.
It goes without saying that lacking any other hope of success, the enemies of The Republic would seize upon the single form of attack that has any chance of working. Which they certainly have done.
So, yeah, of course those things are the goals of the Left.
When Benjamin Franklin was asked by a contemporary woman after the ratification of the U.S. Constitution “What kind of government have you given us, Mr. Franklin?”
Ben replied, “A Republic, Madame, if you can keep it.”
He wasn’t joking. The Founders all knew the perils and fragility of this unprecedented new form of self rule. They spoke and wrote about those perils many, many times.
Nothing has materially changed over the intervening two centuries and significant fraction of the third. Nearly a quarter of a millennium is a very long time for a political system to stand.
The foes of our system have been doing their best to bring it down every minute of every day of every year of that time.
I think the Founding Fathers would be surprised this system has lasted as long as it has.
All of that said, there are still quite a few obstacles in the way of the Left achieving their goals. We must fight now as hard as we ever have. But the fight isn’t over by a long shot. Even if we prevail and America comes back to its senses, the fight will continue long past our time. The enemies of our Republic will just find another avenue of attack and press their war upon us in another fashion.
All of this and more are what I’ve been saying for decades. I agree with you but your points are limited in scope. This fight will never be over, until and unless the Prince of Peace intercedes to end it. Mankind has not and will never achieve utopia. Anyone who thinks that is as vulnerable to the foes of America as those currently duped by the Left. No matter which side of the political aisle they claim to support.
In fact, as we witness the Left collapsing under the weight of its own lies, there is significant danger that the next chosen avenue of attack will come from the Right. Everyone on our side, by virtue of being on our side, is not as pure as the driven snow either. Benito Mussolini and many South and Central American failed governments are prime historical examples of the truth in that.
The U.S. Constitution is constructed to militate against extremes. Because the Founding Fathers knew the danger inherent in extremes. If we follow their road map we will mitigate the threat no matter what quarter it attacks from — but the threat will always exist.
When John Philpot Curran in 1790 spoke the words …
“The condition upon which God hath given liberty to man is eternal vigilance …”
Those words were not only true up until he said that, they are as true today as they have ever been. Today we (mis)quote Thomas Jefferson in a semantically similar saying with …
“… eternal vigilance is the price of liberty …”
Which is still an absolute truth. (Even though first recorded and attributed to General James Jackson in 1809, not Thomas Jefferson. Jackson was just repeating a very popular truism that likely preceded his day.)
So if you’ve been saying “for about a year now …” then Bravo, welcome aboard and glad to have you. We could have used your help before that but better late than never.
We have one of those refurbished old theaters near us. They only show first run if they know it is going to do well as the main theater is quite nice and actually looks a feels like a theater.
It is where we saw TG: Maverick.
Their concessions are not too terrible, but they got their license to sell beer and wine. This is what keeps them in business. So they can show old movies for free once a month on Saturday, but make money on wine sales.
In November they are showing North by Northwest. And even though we have seen it many times, I have never seen it on the big screen. So we will go and have a Cabernet and some Goobers while watching Cary Grant and James Mason. Oh, and Eva Marie Saint.
When I was in HS, I worked at a local “service station”. This was a privately owned station that had two sets of pumps; 1 self-serve and 1 full-serve (me!) and also had 2 service bays. No mini-mart. This was before that.
One afternoon, the gasoline delivery truck was late so I was there after school when he delivered. The owner’s price had gone up a nickel per gallon. He was talking to Donnie (the other mechanic) and they decided they had to raise the prices this time as they didn’t the last time. Part of the discussion was where the other guys around us were priced.
Asking about it later, I got my first education about “loss-leaders” and profits. The purpose of selling gasoline was to get people to come in to buy gas so that they would come in for oil changes (not much profit). The purpose of getting them to come in for oil changes was so that they would also come there when something worse happened and they could make money on the service.
The markup on gas probably didn’t even cover my wages, but for that they didn’t have to clean up the grease in the bays, cut the grass, or dig out the space in the back for the new boiler to go. The 16 year old did all that for minimum wage.
Who wrote that tweet?
This guy:
I say “guy”… I’m not a biologist.
It’s not exactly black or white, is it. 🙂
Back in the days of Barry O I threw out the term “Economically illiterate” quite a bit. I stopped that a few years ago and came up with “Brother Bob’s Razor” –
Never attribute to political stupidity that which can be explained by pure malice.
How many times and ways do the extremists who’ve seized the Democratic Party, media, entertainment, etc. have to tell us that their intention is to destroy America before we believe them?
Amen!