Gunpowder Chronicle posted on October 12, 2008 5:40 PM | Rating:
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I know that I am starting to sound like a broken record here, pointing out the fact that Jihad Joe Albero, the Pusillanimous Perjurer and Plagiarist, is a bright and shining dumbass when it comes to understand gasoline pricing, but his latest post taking Sam's Club to task for price differentials between Dover and Salisbury is just downright dumb.
Let's take a look at things that can affect the price of gasoline differences between cities and states (since Dover is in Delaware, and Salisbury is in Maryland):
1. Tax. In this case, the difference here is about 1/2 a penny. Delware has a 23 cent gas tax, Maryland's is 23.5 cents. Probably not enough to justify a twenty cent differential.
2. Boutique blends. Despite the adoption of the evil ethanol additive, boutique blends -- differing between states and even regions of states -- cause higher prices because they require refiners to supply more variations. My bet is that -- since Delaware has nothing resembling the Environmental Fascism of Soddom on the Severn -- Delaware is using a more standard blend than Maryland.
3. Transportation Costs. The more it costs to transport fuel, the higher the price of fuel. By the way, this goes for just about any commodity. Distance from the refining source is a key price factor in the retail price of gasoline.
4. Delivery Days. If a station's last delivery was on a higher-priced day, and another station's last delivery was on a lower priced day, then the higher priced station typically will not lower its price until the next delivery. Why? Because that station paid a higher wholesale price for that gas, and it can't just willy-nilly start lowering prices below cost. In fact, in Maryland, selling below cost is against the law.
5. Geographical Marketing. Gas stations are allowed to price their gas competitively to their markets. That's why the Rutters in Shrewsbury, PA can charge $2.99 while they BP/Amoco in Rayville, MD (about 8 miles apart) can charge $3.18. Or the BP/Amoco in Hunt Valley, MD can charge $3.14 (despite being only 11 miles from the one in Rayville). (Note: as long as the price is at or above cost, at least in Maryland). Comparing Dover, DE to Salisbury, MD -- what, 65 - 70 miles separation -- is silly and stupid.
For being such a "smart businessman" -- a master of flourescent light condoms as it were -- Albero certainly misses the beat when it comes to setting, establishing retail gas prices. One also must question his fealty to the notion of the free market. If you don't like the price of gasoline posted, buy it somewhere else. No one is forcing anyone to buy gas from a particular station.