Q: My question concerns fuel pricing and specifically, profit margins. Prior to ATD.B's last quarter results, concerns were raised about a potential decline in profit margins from gas sales. However, I thought retail gas price margins were quite stable and that it was the underlying price of oil that caused gas prices to gyrate. In fact, I thought retailers were helped by fluctuating oil prices because they are quick to raise prices when oil goes up (thus selling lower priced inventories gas at a higher price) but slow to lower them when oil drops. Is this thesis correct? If I am at least somewhat correct, it would therefore seem that overall sales is not that important a metric for these companies.
How much do gasoline profits contribute to these companies over all profits? Or are in store sales more important?
Appreciate your insight.
Paul F.
How much do gasoline profits contribute to these companies over all profits? Or are in store sales more important?
Appreciate your insight.
Paul F.
