Oil Expert Explains Big Price Swings At The Gas Pump
MIAMI (CBSMiami) - The pain at the pump is getting worse by the day.
"Apparently it doesn't matter how high it goes up, the sky's the limit here," lamented driver Keith Bryan.
"I think I paid $3.99 on Monday and now I'm paying $4.40," said Katarina Gomez as she gassed up.
CBS News Miami's Ted Scouten asked Seamus McClinchey if he ever wonders why the price of gas goes up so much in one day.
"No clue," McClinchey said, "I have no clue!"
Here's an example, the price at a Hollywood gas station went up 45 cents on Tuesday afternoon.
We asked Ned Bowman, with the Florida Petroleum Marketers Association, why we see such big price swings and why we notice changing prices in the late afternoon.
He explained gas trades on the New York Mercantile Exchange.
"It's similar to the stock market where it goes up and down. Crude oil gets traded, diesel gets traded, unleaded fuel gets traded and when the price settles at 4 o'clock when the markets close, that price is what people are going to be charged the next day at the terminal to pick up their fuel to bring it to the gas station," Bowman said.
Bowman said since most gas stations buy their fuel daily or as needed their prices can change frequently.
"What we're seeing are swings right now that are unprecedented. Usually, we see 1 or 2 or 3 cent swings a day, now you're seeing 45, 50 cent swings a day. That's not normal," he said.
Bowman explains those high costs also bring about higher operating expenses.
When you see signs charging one price for cash and one price for credit it's because gas stations get charged a 3 percent fee when you swipe your credit card.
If you use a card to buy gas for a dollar a gallon, the gas station pays 3 cents a gallon in fees. If gas is 4 dollars a gallon, they're paying 12 cents a gallon.
Some are passing that cost on to you.
