Why is Costco gas so much cheaper than regular gas stations? Do they sell it at a loss?
The answer from Alex Barrett answered the question from the Costco side, but having once been a fuel tanker driver responsible for some deliveries to a couple Costco stores, I can add a bit more than he may have been aware of.At least the Costcos where I made deliveries had a much larger underground storage tank (UST) capacity than anywhere else I ever went. The highest gasoline UST capacity I ever saw outside of a Costco was a single 30,000 US gallon tank, and even this was unusual; more common is one or maybe two 10,000-gallon tanks. Costco, on the other hand, at least doubled this — the Costco in Toledo, OH had five 12,000-gallon tanks for a total storage of 60,000 gallons of gasoline. Such a huge storage capacity allows more flexibility to play the market and make purchases at the lowest possible spot price. (FWIW, the busiest non-Costco stations I ever remember doing would sell 15K per day, just to give you some idea of how long 60K can hold out.)Also, I would add that most of the times I delivered to a Costco, I was not alone. Often, I would show up and be the third fuel truck waiting in line for my turn to unload. They tried to stay near-full most of the time unless spot market conditions made it impossible to do so profitably.TL;DR There isn’t much profit in gasoline retailing anywhere, Costco or otherwise, but Costco made up for razor-thin margins by doing huge volume.
Why is gas so cheap in the US?
Are you referring to natural gas? If so I can’t figure that one out either. Gas is as hard to find as oil and only pays about a quarter or less of an oil well. it takes six MCF to make 42 gallons of liquids. At $3,37 per MCF that is only 20.22 per barrel. And you have to pay transpiration fees for gathering and compression and fuel loss. Why would any one want to be in the natural gas producing end of the business?If you are referring to gasoline it has to be taxes. Oil prices are set world wide.
Why are gas prices so low in Puerto Rico?
Where are you getting these prices from?? Gas is not 47 cents per litre right now or $1.74 per gallon. Its about 90 something cents per litre which is almost equal to the gallon prices in the states. Everything here is priced in comparison to the US. PR was going to get cheap gas from Venezuela but the US govt said no.
What is making gas so expensive in the US?
You mean ‘gasoline’?The price of gasoline is affected by many forces in the marketplace.If one or more refineries are shut down for maintenance, repair or expansion (or from damage,) the lower supply will cause in increase in price at the pump.A significant part of the pump-price of gasoline comes from federal, state or local taxes levied on a per-gallon basis, and that can cause price differences as you cross state, city, or local boundaries.The formulation of gasoline can vary regionally and seasonally because of various regulations, so the price of a gallon of gas in San Francisco can be a LOT higher than a gallon in Houston, Texas.While there are lots of refineries across the country, many are located near harbors or crude-oil-producing regions, so transporting the gasoline from the refineries to various markets can affect the pump prices.No country has monopoly-pricing power pretty much since fracking was developed in the United States. Since then, the US has gone from being a gasoline importer to being a gasoline (and natural gas) exporter, which HAS affected world-wide pricing, just because supply and demand affect prices, and ‘suddenly’ supplies increased because of that.Conversion of refineries from legally mandated “summer blends” to “winter blends” of the fuel (and back again) can affect availability as well as basic refining yields and costs.And NO, other than by taxation or regulations set by Congress, the pump prices are hardly affected by who the President is… at all. That’s a fiction of political parties and talking heads in the “Entertainment News” business.
Why is electricity so expensive compared to gas?
In markets where both electricity and natural gas are available as a utility delivered by wires and pipes to your door, it is likely that natural gas is actually used to generate much of your electricity, so it therefore makes sense that electricity would be more expensive than natural gas (as the seller has to cover the fixed costs of generation). In general, products further down a value-added supply chain get more expensive for each layer of value-add.On the flip-side, in markets where electricity is available as utility wired to your door, but natural gas is not, and rather has to be delivered in pressurised canisters, I’d assume that the natural gas is more expensive than electricity on a per kWh comparable basis.