Gas Rationing Is Here

Last night I was talking to a G.I. MD I work with who lives in Mobile, Al. He has a good friend in Mobile who owns several "Shell" gas stations. The friend said that his supplier had called yesterday and informed him that there was now a limit to the amount of fuel that could purchased and anything over that amount wound be $.20 per gallon more. Calls to other wholesale suppliers requesting to be supplied by them were refused based on the lack of supply vs demand. Economic rationing to be sure, but rationing never the less.

-- dcj (sandavid@prodigy.net), December 23, 1999

Answers

Details? How much fuel, how do they expect calculate this (update all their computers, HA!), and most importantly, how do they expect to enforce it? Pay first, fill up afterwards? Hmmm.

-- Servant (public_service@yahoo.com), December 23, 1999.

Servant, Unknown amt's. The $.20/gal will be passed along to the customer as the fuel is sold at retail. The enforcement is economic. Buy more than your wholesale limit and pay extra. The interesting unknow is how will this play out at the retail level. The average Ms / Al retail price is $1.17-$1.21 / gal for "regular" and add $.10 for med and $.20 for prem.

-- dcj (sandavid @prodigy.net), December 23, 1999.

Similar events happened in the 1970's. The gasoline supplies are not sufficient for every driver to fill up every gas tank -- but how can you stop this behavior without offending retail customers? It's not easy to prove the driver really doesn't need to fill up right now.

Supplies are also not sufficient for every gas station to fill all its tanks. Gasoline suppliers can stop, or at least greatly reduce this potential problem, with a premium per gallon charge for fuel exceeding what the station normally buys per week (or actually bought the same week one year ago.) This "rationing" would be invisible to retail customers.

-- Richard Greene (rgreene2@ford.com), December 23, 1999.

Branded retailers are in trouble if they're tied to one supplier but most stations and jobbers aren't.

The majors pull this kinda ploy occasionally. Its actually not that unusual. That Shell dealer has a contract to buy x amount of product from Shell. Shell can and does charge a surcharge on occasion above these volumes, but only when its in Shell's best interest (ie anticipated shortage).

But as a former independent refinery rep, I can attest there's plenty of unbranded gasoline available from other suppliers that'll be alot cheaper than +20 cents. Almost all 'jobbers' (oil distributors) and some retailers have several different suppliers.

So its not correct to assume that since Shell is going to charge a 20 cent over-contract surcharge, retail prices will be 20 cents higher.

Although many of you don't believe it, the oil biz is very competitive on most levels. And although you're filling up at a Shell station, it certainly doesn't mean the gasoline is exclusively from Shell.

-- Downstreamer (downstream@bigfoot.com), December 23, 1999.