Wednesday, Apr 08, 2009 at 14:36
Axel
In your response to my epistle you asked the question “pumphead to car costing does not vary overnight does it?”
Yes it does.
All fuel is bought and sold in US dollars. A fluctuation in the exchange rate of 1% will change the prices at the pump up or down by over a cent. (Remember the Petrol you buy may have been bought and paid for under contracts months old and the company will have to repay the borrowed money at today’s exchange rates, so profit margins can change a few times in a day)
Let’s use the
Easter period as an example. An adult console operator is paid a minimum of $14.31 per hour. This is the minimum wage expense factored into any litre of petrol sold. A casual day console operator is paid 125% of this rate; night 147%. Saturday 172.5%, Sundays 222.5% and public holidays 272%
According to your logic the price at the pump should change 7 times over
Easter (Thursday to Tuesday).
For the sake of the argument, let’s use the example of a neighbourhood petrol station. On Good Friday the station will have to sell 172 times the amount of fuel that they would over an ordinary week day (assuming all other factors remain the same) to maintain the same profit margin. I’d suggest that fuel sales would actually drop on Good Friday…no workers going to work
For them to break even on this day, fuel prices would have to increase to at least 200%. So they them amortize the increased expenses over the entire holiday break.
They could try to amortize it over the entire year, but can a small business cannot afford to borrow that amount of money. A big company can.
The prices you pay in off peak periods are probably based on the minimum operational costs encountered (get the person through the door). For any company to survive, they have to increase their prices over periods of high demand so they can make a profit. Other than that they may as
well sell the business and leave their money under the mattress
You rail against the system, but you didn’t answer my question
What is your considered opinion and what basis did you make this decision. How would you fix it?
Without that, your signature line is a mockery
FollowupID:
626817