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To: Blood of Tyrants

There's another thread around here somewhere (I'm looking for it now) that claims most retailers take gas from their suppliers COD at spot market rates -- the idea being that they could instantly react to market conditions, instead of waiting until their supplies were depleted (which in theory, means that the prices should fall as quickly as they rise when the scales tip the other way)

MJ


27 posted on 09/01/2005 5:56:38 AM PDT by mjustice
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To: mjustice

Everyone seems to forget that the retailer has to replace the gas that is being pumped or there will be no more to pump. And as you point out, they have to pay the price that is prevailing at that moment, not the price when it was produced or when it was put in the ground at the service station. And it's not only gas, but everything that has to be replaced when its supply gets low. A retailer who does not collect enough for a product that is currently in stock won't be able to pay the new price to replace the stock and will soon be out of business.

When you buy a can of corn, a gallon of gas, a loaf of bread, etc. that's the end of the money line as far as you are concerned, but not for the person who sold it to you.


135 posted on 09/01/2005 6:45:50 AM PDT by jwpjr
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