So, why aren't gas prices at the pump coming down?

Question

Every time the stock market has some fun with oil prices and they skyrocket, we always see the prices at the pump follow along the very same day.

Well I see today that prices are down to $115 a barrel, yet we are still paying the same price at the pump as when they were $130 a barrel. So, my question is, why is it when stock market prices drop we don't see the price at the pumps drop the same day like when they go up?

Answer 1

They are dropping slowly - the reasoning depends on who you ask.

Some will insist that it's politically motivated & gas prices will be dependent on the election in November.

Some will say that it has to do with when the gas is delivered & since many reduced their driving with gas as high, station owners still have the very expensive gas in their tanks & therefore cannot lower the prices until that gas is mostly gone.

Others will scream that it's gouging & that the station owners are making a killing on the gas.

There are even a few who insist we are being 'conditioned' by big oil to accept $3.50 or higher as low so that the prices can be eased up to stay.

Depends....

Answer 2

Actually, they're about 40 cents lower.  

Answer 3

I'm sure tired of the high gas prices. Someone told me about this site which gives away free gift cards for gas. I can really recommend it.

Answer 4

wholesale gasoline contract is 71 cents per gallon off of the highs

they may be slow in taking it down at the pump, because they bought it wholesale higher

heeeeeeey, wait a minute - wholesale increases showed up at the pump the next day

why those greedy ba>>>>ds

Answer 5

They are coming down.  I paid almost fifty cents per gallon less today than I did two weeks ago.

Answer 6

My gas price is down 20-25 cents from a few weeks ago.

Answer 7

The price reductions you see are for oil futures-it generally takes several weeks for prices to trickle down to the retail market.

Enjoy it while you can because it will not last-The US needs to start drilling now because unless we do we are at the mercy of the major oil powers many of whom hate this country

Answer 8

simple capitalist greed

Answer 9

The trickle down effect takes 10 to 14 days.  You will see some big drops in a week or so.

Answer 10

they wont be coming down much, it is wallstreets intent to keep prices  high no matter what, even if means going to war to do it.

Answer 11

The gas companies are out to make money and as long as we're willing to pay for it they'll keep the prices as high as they want.

Answer 12

because oil companies can. if the price for a barrel goes up, we see it the next day. if it goes down, it takes 1-2 weeks for us to see a significant drop. the demand isn't changing and the supply is so we suffer, it sucks but there's not that much we can do.  

Answer 13

This answer is stolen from brian_hanger on a previous question.  It is the most accurate answer for why prices drop slowly.

It is just a function of inventory that causes the prices to rise fast and drop slow.

Lets suppose you are a gas station owner and you sell 1,000 gallons per day of unleaded at $1.00 per gallon. Now lets suppose today you notice that you have 2,000 gallons left in your underground storage tank. You paid 90 cents a gallon for that 2,000 gallons. Now you order another load. A load is 10,000 gallons. Lets say that this new 10,000 gallon load will cost you $1.10 per gallon (that is 20 cents more than what you paid for the last load). If you want, you can go ahead raise your price at the pump and make extra money on the remaining 2000 gallons. Hence the quick rise.

Now, if the example were the other way around and your new load was 20 cents lower (70 cents per gallon) , you wouldn't want to lower your price until the old fuel was sold at a the higher price. If you didn't wait you would lose money.