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Gasoline refiners, like Exxon Mobile




Gasoline refiners, like Exxon Mobile, sell branded gasoline both to independently owned gas stations and to company owned stations. Gasoline stations receive gasoline by truck at a delivered price, called the dealer tank wagon (DTW), or pick it up themselves at the ?rack? with their own trucks and pay what is known as a rack or wholesale price. A refiner makes money by selling wholesale gasoline, to independently owned stations at a price above marginal cost. Since the refiner marks up rack prices, the gas sold by independently-owned gas stations has a double markup, one imposed by the refiner, and the other, by the retailer. So, the resulting profit maximizing price is naturally higher. Suggest solutions to reduce the double markup problem.;*There is no word limit, please explian in full. The shorter the better.


Paper#29641 | Written in 18-Jul-2015

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