Operators of Iowa’s gas stations say they don’t know much more than you do about where prices for gas will be tomorrow. Ron Marr, executive vice-president of Petroleum Marketers of Iowa, says right now a strike in Venezuela has shut down the world’s fifth-largest exporter of oil, and is costing the U-S about a million barrels a day of crude-oil imports. He compares the shortage of crude-oil product to a shortage of rain in a corn-growing state — prices go up, and Marr says every dollar-a-barrel increase in the price of crude oil probably adds a dime to the price you pay for a gallon of gas. He has a clue to how those gas-station managers decide the price they’ll charge for their gasoline. Look out the window, he says, since it’s the only industry he knows of that advertises its retail price in signs six feet high, and Marr says “you can shop at 60 miles an hour for our product!” He adds that looking at the signs is how neighboring retailers make their own pricing decisions, not any agreement with their competitors. We see what you see, he explains, and if the price goes up a businessperson doesn’t want to “leave oney on the table’ so he raises his own price, and if others’ prices go down he’ll worry about losing volume so he’ll bring down his own prices to compete. Marr says the gas stations don’t control the oil markets or OPEC, but their parent companies buy oil on the wholesale market, which goes up and down several times a day.
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