Oil was trading ten percent lower yesterday. But don't expect gas prices to drop as quickly as it rose.
According to AAA analyst Don Redman, gas station owners raise prices as soon as they do because they know their next order will cost them more
"When the price jumps up, the cost for the retailer is immediately going to go up because their next delivery is going to be a higher price," said Redman.
So why don't they lower prices as soon as oil prices drop, knowing that their next order will be less?
"There's no doubt that this is some level of profit-taking once prices start decreasing, but not astronomical," Redman said. "It's not gouging, by any means."
Redman says the extreme volatility in the oil market, especially when there is conflict afoot, is always on owners' minds. But he also says it is a competitive business, , and service station owners will eventually lower prices when they can to try and get customers before the other guy does.
AAA says drivers are now paying $3.59 per gallon. up $1.07 over the past month. Diesel went up six more cents today to an average in the New Orleans area of $5.01 per gallon.
