There are two sources of high oil prices: speculators and the oil companies. I will certainly grant you that Joe Schmoe who owns a Sheetz franchise can't sell gas for less than what he's paying for it. The biggest issue is with the speculation on oil prices. The cost of a barrel of oil has gone up close to $10 a barrel in one week without there being a single barrel less produced, no shortages, no increased demand, nothing... just speculation that shortages MIGHT happen at some unknown point in the future. So the real cost of oil has nothing to do with supply and demand, but is now controlled by speculators who are betting with all of our money.FromTexas said:They can't undercut each other much. Not because they are big oil but because their prices are decided by the commodities market... not them. How many times can we say this? So, no, its not a monopoly but they can't price compete too heavily (which actually is not only because of the pricing factor but also because of regulation... remember when Sheetz and Wawa got screwed around here for pricing too low last year because Burch or whoever complained about them unfairly competiting by utilizing their wholesale nature and not taking a true profit -- the state told them to quit that). What they do make out on is large scale efficiencies, being the ones to pump the oil, being the ones to refine the oil, and being the ones to distribute it. The more pieces they can get involved in, the more they can control costs outside of the pricing.
The other problem is with the oil companies themselves. So the supply of oil might be interupted if war breaks out in the Middle East... what's that got to do with oil that's drilled in Alaska or off Venezuela? If the oil companies were truly using competitive pricing, Chevron and Texaco would be selling their domestic or short-haul imported products for much less than what Middle East import-heavy Exxon/Mobil could sell their products for. But since there's no real competition between these companies they all sell to the stations for about the same price.