Why does gas fluctuate prices so much from day to day? Why don’t they have a set price, like how most goods are?
In: Economics
I’ve heard that the gas is just the reason for attracting customers, and the profit comes from the incidental purchases inside the store. The price you are paying doesn’t have anything to do with profit vs. what they paid for what they have, but rather what they expect to have to pay in the future to refill their underground tanks.
The gas station wants to sell the gas for as much as possible. But they also want their tank to have enough room for their next delivery. They have to price it high enough that they’ll maximize their profit, but low enough that they won’t have a delivery that can’t fully unload. Likewise, if they completely sell out, then the price was too low, and they could’ve made more.
So if they’re selling it faster than expected, price goes up. If they’re selling it slower, price goes down.
How many commodities have a fixed price?
The price of eggs have been up and down an absolute ton on a regular basis for years now.
Things like iPhones have a fixed price because Apple have such massive margins and a lack of competition that it just sets a price and eats any changes in the costs of the parts. There are too many egg producers and their margins are too small for that model to work out for eggs.
Gas price is essentially a reflection of crude oil price. (There are some other factors, but the price of c[rude is the single most important](https://media.bespokepremium.com/uploads/2020/04/042020-Gas-vs-Oil-Prices.png))
Crude oil is a commodity. It is bought and sold, is traded in the commodities and futures markets, and as such its price fluctuates daily. Or hourly. Or by the minute
It would no more have a set price than literally anything else. Prices always change
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