| Point by point: Once that gas is in the tank in the ground, it has to sell, which means you and I have to buy it. If you and I go to Conoco instead, that tank takes that much longer to empty. Retailers do not suck slow selling gas out of ground tanks and sell it to other stations. You're right, the franchise owners and independant gas stations who buy from EM will suffer. These are not the people that really determine the price of gas though. The station owners (especially the independant ones) are already squeezed. The bulk of profit being made on gasoline is being made at the refining level. When people talk about the profits that big oil companies are making, they aren't talking about the guy who owns the gas station. It's the refineries and distributors that are making all of the money. Why would other retailers purchase gas from Exxon when they are making good money off their current wholesaler? Not to mention getting extra business from anti-exxon types. Other retailers will purchase gas from EM because the demand for their own gas has gone up. So they can raise their own prices to compensate--does that really serve your purpose?--or they can purchase gas from another company. Or more likely, both. I would imagine that companies probably buy and sell oil between each other already, but let's assume that right now EM only sells its gas to its franchise stations, and doesn't sell any to independent stations or other franchises. So people stop buying gas from EM stations. The gas at those stations is sitting in the ground rotting, but it has already been "bought" by the local franchise owner, so this doesn't hurt EM directly. But since the gas isn't going any where, EM has no one to supply with gas. This is a problem, so they offer the gas to another company--ConocoPhillips--at the same rate they offered it to their franchises. CP has seen an unexpected increase in demand and needs to get addditional gas to meet the new demand. They buy from EM. They probably raise the price that they charge the stations who buy from them too, so the price at the pump for CP-supplied stations goes up. So EM hasn't lost any significant money. CP hasn't lost any significant money. The local owners of EM stations are devastated. The local owners of CP stations are harassed by the public for raising gas prices. The public is paying more for gas. As the consumer you are cutting into the revenues that exxon gets from its franchise owners. You are interfering at the retail level. The franchise owners are buying less gas from wholesalers because they are selling at a slower rate, therefore they have less revenue for exxon to take their cut from. (When you own a gas station you are paying exxon a "cut" to have their sign , amongst other things, at your station) See the above example, but the franchise owners buy their gas from EM--usually they have a somewhat secured purchase rate, so that if oil prices vary wildly, the non-franchise stations that EM supplies will take the brunt of it and soften the blow for franchise stations--so you are directly hurting the franchise owners and only indirectly affecting EM itself. The true retail for EM is at the distribution level. EM sells it's gas to franchise owners and independent stations and even other oil companies. If it can't sell as much to one outlet but the over demand has not changed, then it will just sell more to the other outlets.
"The two seater is being joined in a few weeks by a larger two-plus-two model with a rear seat for munchkins." ~Jim Mateja, Chicago Tribune, in regards to the Z32.
Andrew Janeshek // jnshk@aol.com // 1992 NA 2+2 [Stage 2-ish]
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