Something's rotten in OKC

[Millie]

I don't get it. What causes this attitude that somebody is out to get us- or pulling something over on us- because of a variance in gas prices? Does anybody happen to know the difference in the price of a loaf of Wonder Bread at Crest in MWC vs. Albertson's in Edmond?

[PUGalicious]

I don't get it.

I agree.

[Millie]

I agree.

Care to explain, then?

[BaconCheeseburgerDeluxe]

I can explain why Flying J is so much cheaper than everyone else. They own their own refineries and they move the fuel with their own trucks. Not to mention Albertson's buys thier fuel from Flying J.

There is no middle man like most of the fuel stations in OKC. Sams and Albertson's are not in the business to profit off of the fuel. They sell fuel as a conveinence to their customers. Simply because chances our that if you come there for fuel you will come inside the main store and spend money.

[MadMonk]

I used to work with the daughter of the guy who owns that Conoco on Hefner and May. She used to say he was always complaining about how the newer 7-11 across the corner always undercuts him by a couple pennies per gallon and how that, due to some law, he can't sell it any cheaper. Is there a law that states that the cheapest they can sell it is at some standard price above what they paid for it?

Maybe in those higher priced areas the gas stations are getting screwed on the price of their gas and they have to pass the cost along?

[BaconCheeseburgerDeluxe]

There is a law on the books that mandidates that retailers have to charge cost plus 6%.

Back on Black Friday Wal-Mart was selling an RCA Big Screen HDTV for $499 everywhere nationwide except Oklahoma. They quoted the states fair pricing law prohibited them from selling it at that price. The price of the was regularly priced $899 cost was around $700 or so.

[PUGalicious]

Care to explain, then?

Why bother?

[metro]

I was in Philadelphia, New Jersey and New York last week and the average price per gallon was $2.89. I came back to OKC and saw $3.15-$3.35 and couldn't figure it out. We are nearly always cheaper the coasts and well below the national average. How come we are currently above the national average??

[jbrown84]

Yeah it's not the descrepency within OKC, but the lower prices in bigger cities that baffles me.

[SoonerDave]

There is a stupid protectionist law in Oklahoma that's referred to as the "predatory pricing law" that prohibits the sale of merchandise at retail below the retailer's wholesale cost. It ostensibly "protects" the so-called "mom-n-pop" retailer from the WalSlime down the street from purposely undercutting their prices and running the mom-n-pop out of business, but what it really does is artificially increase prices you and I have to pay on everything from soup-to-nuts.

Oklahoma used to be well below averages on gas prices...not so much anymore.

-soonerdave

[brianinok]

SoonerDave, Oklahoma's current gas prices have nothing to do with the predatory pricing law. I don't know if that was what you were trying to say, but it seemed like it to me. Wal-Mart (and most 7-11s) is always going to sell gas about 4-5% above wholesale (thereby always barely breaking the law). For some reason, the supply and demand macroeconomic equilibrium has shot up for the state. Maybe it has to do with that refinery fire in Wynnewood. I don't know.

I, for one, like the predatory pricing law. Wal-Mart already has close enough to a monopoly in this state for me. If they were legally able to sell merchandise below cost, they would do it. One by one, they would drive out the competition for those goods. That would not be good for Oklahoma, IMO.

[Kerry]

As much as the oil companies would like to - they don't set the price. Gasoline is traded on the commadities market and the buyer sets the price. Just like Ebay. My wife has a flex-fuel Armada but there isn't a flex fuel station anywhere near where we live. Both of our cars are brand new and they are the last two gasoline engines we will own. I'm not buying another car until it is powered by something other than gasoline. If the "energy" companies won't create alternative fuels then maybe the car companies will if I refuse to buy another gasoline engine. It's not much, but it is all I can do.

[Millie]

Why bother?

Mature.

[SoonerDave]

I, for one, like the predatory pricing law.

That's fine, but please understand that WalMart isn't the only retailer that might take advantage of the pricing environment if that law didn't exist.

A "Predatory pricing" law sounds nice, and implicitly casts a villainous role on anyone who might oppose it ("You LIKE predatory pricing?"), but the downside is that it keeps prices high, and that reduces buying power for everyone.

Here's a great example. We hear on almost a nightly basis a hue and cry for "someone" to do "something" about prescription drug prices. So, large retailers such as Target and WalMart (loathe them though I do) decided -- without government inspiration -- that they would offer certain classes of drugs for $5. And there's no question they're taking a loss for every pill sold. But guess what? When word got out that these programs might make it to Oklahoma, some people screamed bloody murder and raised the flag of the Predatory Pricing Law in an effort to keep prices high. Once again, we have a situation where the market sees a problem, market creates a solution, but the government impedes the solution.

Protectionist legislation hurts at the state level just as much as it does at the national level, and a "predatory pricing law" is nothing more than that - protectionism. It's a wonderful concept notionally, but under the light of implementation's reailty, there are significant chinks in its supposed armor.

Reducing America's fuel consumption is a wonderful, politically visible issue, but serves as barely a blip on the radar in the context of the broader issue of global demand for refined petroleum products. In the emerging and explosively growing eastern economies, such as China, their increased consumption represents a demand component the world has simply never previously known and with which the petroleum markets have not previously had to contend. With America failing to tap into its own petroleum resources, and failing to increase refining capacities for oil that it brings in, it shouldn't surprise anyone that gas prices are on their way up. A 10% spot difference in one region could be attributed to any one of a dozen, perhaps 100 factors, but the implicit notion that there must be something inherently sinister or conspiratorial about it simply denies the reality of an incredibly complex world market for refined petroleum.

-soonerdave

[Kerry]

Amen Soonerdave

[brianinok]

Soonerdave, I guess we will agree to disagree. I think it would cause more long term harm to allow the massive corporations like Wal-Mart to sell gas at or below their cost. It would drive out all of their competition, giving Wal-Mart a monopoly. I sure don't want Wal-Mart to be my only option (frankly, I wouldn't care if it wasn't even an option at all).

[Kerry]

Brian - If Wal-Mart could do to OPEC what it has done to other suppliers wouldn't that be good. I would love to see the CEO of Wal-Mart tell Chavez how much he can charge for oil.