Panic at the Gas Pump
As Hurricane Ike approached the Gulf, and refineries shut down, I guessed that gas prices would rise, but as I heard reports of $5.00 for a gallon of gas, long lines, and shortages even before the storm hit, I was taken aback by how rapidly the situation descended into panic.
…Oh, and I needed to buy gas. I plan poorly too.
Here are some takes on gas around the Lowcountry.
Eric shares how things got started.
It didn’t start with much here in Charleston. A few local gas stations posted signs asking customers to limit fuel purchases to 10 gallons.But it started a short-lived panic Thursday, with talk of $5 gas by late afternoon.
The rationale sounded good, anyway. Fuel suppliers were watching as Hurricane Ike hunted for a spot along the Texas coast to hit, and some refineries shut down in anticipation. Offshore rigs were hanging out in the Gulf with all kinds of potential for damage, and things were just plain uncertain.
It’s when times are uncertain that rumors really grow legs. In this case, word went out via phone calls, text messages, email, and mouth to ear.
Janet notes how rumors can send us into a frenzy.
When Larry first saw photos of $5/gal gas, he thought it was a hoax.
Who’s profiting from all of this?
Steve says it’s the wholesalers.
By and large, there’s actually no profit in selling gasoline. Believe it or not, gas stations don’t make their profits on the gas itself. They make their money overcharging you for chips and soda. There’s on average less than 10 cents per gallon profit in fuel sales. And since most of us pay with credit cards, the card processing fees eat into that by a good 50% too. Really, we can’t blame the bulk of gas stations for the exorbitant pricing. Their prices just reflect about a ten cent profit on top of taxes and the raw cost of the fuel from pirates in the wholesale end of it. Wholesalers will blame everything and anything…for a reason to spike the costs up.
JT explains that gas stations set prices based on their future costs.
No matter who’s to blame or profiting, prices are up, and there are shortages.
The Cosmopolitan Charlestonian took at look at gas prices while walking about downtown.
Chip questions the wisdom of driving around to find the best gas prices during a temporary shortage.