Oil drops, gas stays the same?

Question

K, so oil has dropped roughly $7 a barrel in the past few days and I personally have yet to see even a .01 cent drop at the pump. Furthermore, it seems that whenever oil goes up even a dollar a barrel I instantly see that reflected in my gas tank.

Can someone logically explain this to me?

Answer 1

Best Answer - Chosen by Asker

The price has to raise in anticipation of the replacement cost of the fuel in the pump.
For the price drop it has to work thou the system before it gets to the customer.

Asker's Rating:

Asker's Comment:

Sadly I think your right. Thanks.

Answer 2

Pump prices are generally a month behind the price of oil. You probably won't see any significant decrease for a couple of weeks...provided the price per barrel stays down.

Answer 3

well
just because the barrel has dropped or gone up doesnt mean that gas will
although usually it does
and reason why its staying the same?
we keep buying it
so why should they lower the price

Answer 4

It's one of the many ways the government screws us....as soon as the price of oil goes up, we know it and pay for it. When it goes down, they take their good old time passing the prices onto gas stations who then, hopefully, pass it on to us.

Answer 5

Prices will fall because of Competition. Which means its an incremental jockey to the bottom. If a retail station could, they'd charge you $4.00/gal even if the gasoline only cost them $2.50. But because the other station lowered their prices to $3.90 and is now getting all the sales, the $4 station will lower to $3.89. And so the game goes down, down, down.

But in the end, competition will drive prices lower.

Answer 6

If the replacement cost determines the price then it should fall as fast as it rises. If we do not see a decrease in the price next week of about 20 to 30 cent we will know they have been not telling the truth about why gas prices go up when oil does. I did hear today that the average price had declined one penny a gal.