Can someone please explain CE's pricing policys?

[Eric Rosenberg]

Just finished a trip from the beach area to Bakersfield and back today and paid $2.30 for CE fuel at their station near Magic Mountain and then paid $1.65 for fuel at the Bakersfield School District's 24 hour station. Can anyone venture a guess how or why CE charges $.65/GGE more for the same commodity? This is significant price difference and represents a much larger profit margin.

When we were fueling at the CE station and right after attaching the nozzle and releasing pressure the second pump about 8 feet over set of two or three VERY large explosions, actually making the sheet metal sides expand and contract with each high pressure explosion. Startled we stopped, and moved back a step or two. We discussed leaving but really needed the fuel to make our destination when a CE employee drove by and asked if everything was "ok". We were told that they had heard the explosion across the lot and that they knew that something was wrong with that pump but it was ok to use the one we were. They left without posting a note or an out of service" notice on the affected pump.

We fueled and left for Bakersfield.

[Lakewood90712]

Re: Can someone please explain CE's pricing policys?

25% less than the current retail mid grade gasoline avg. price in each C. E. operating region .

Compressed and sold at a retail station , Natural gas is NOT a commodity at this time. Not enough demand .If and when a few hundred thousand private cng vehicles are in the LA basin, and GGE pumped at each station reaches at least a thousand GGE per day , the price will drop. With that kind of volume on small sales, then , just like a gasoline station with a Food Mart and all of the high margin crap they sell inside will allow the operator to reduce the margin on fuel.

Give Andrew Littlefair at C.E. a call on monday . I'm sure he would love to discuss it with you. L.O.L.

P.S. Ask any retail gasoline station operator about his margin , today , vs 20 years ago. I assure you it will not be a happy chat.

[Eric Rosenberg]

Re: Can someone please explain CE's pricing policys?

Lakewood, I was not referring to NG as a "commodity" in the Stock Market sense, rather as an object that does not vary from seller to seller, such as a 1/2 gallon of milk, a package of Oreos, an Autolite spark plug, or a quart of Quaker State 10/40 motor oil. It's an object that more than one retailer has and therefore can be compared to price wise.

Both stations have pumps (though the school lot only has one), both were clean patches of asphalt, both stations had VISA/Mastercard readers (Unlike the PG&E station 5.5 miles away from the school lot), and neither station provided amenities like water, air, and paper towels for cleaning the windshield.

You ever notice how when there are two or three gasoline stations at the same corner each sells their product at the same price regardless of their own relative investment in overhead costs to remain COMPETITIVE? You can bet each station owner has different fixed and variable costs but to remain conpetitive in that market they match their price(s) as closely as possible.

[Lakewood90712]

Re: Can someone please explain CE's pricing policys?

Both stations have pumps (though the school lot only has one), both were clean patches of asphalt, both stations had VISA/Mastercard readers (Unlike the PG&E station 5.5 miles away from the school lot), and neither station provided amenities like water, air, and paper towels for cleaning the windshield.

You ever notice how when there are two or three gasoline stations at the same corner each sells their product at the same price regardless of their own relative investment in overhead costs to remain COMPETITIVE? You can bet each station owner has different fixed and variable costs but to remain conpetitive in that market they match their price(s) as closely as possible.

A few things to remember. The school district does not need to make a profit , may or may not not need to factor in the land and facilities in the cost , and this would be a huge subsidy. As to competition. At present, CNG is not a common retail item, so there is no competition, and will not be until it is a common retail item in the marketplace.

At times in winter, the C.E. price is LOWER than so-cal-gas , who uses commodity+cost of facilities+regulated profit.

Just me $.02 worth

[Eric Rosenberg]

Re: Can someone please explain CE's pricing policys?

OK, let's back up about 5.5 miles down the 99 freeway and say I stopped for gas at the PG&E station (if I had their card) and paid $1.79 (.14 cents more) there is still a $.51 cent difference between the two "for profit" companys (CE and PG&E).

I can't imagine that a Union 76 station pumping gasoline is going to be able to charge $.50 more per gallon than the Mobile station across the street at the same intersection.....

And you're right, what school district in the State of Californina doesn't need to be making money just now?

[jetboatjohnny]

Re: Can someone please explain CE's pricing policys?

Look at the Garden Grove CE station, CNGprices shows it at 1.75, much lower than the price at their other stations. Why is this? The Anaheim Trillium station is at 1.80 and CE wants to get all the taxis to their station. It's good to see there is still some competition.

[freedml]

Re: Can someone please explain CE's pricing policys?

In rare cases, there is competition. PGE sets its prices statewide, and so won't be looking at nearby stations (of which Bakersfield is maybe the only one???) As Lakewood said, when there are stations all around the prices will be more uniform. As it stands now, not only are they all over the place, but each CE dispenser is a custom deal with the city/agency which is mainly about providing CNG for their daily operations (buses, trash trucks, etc.). The public access portion is more of a pain for them than a business.

[freedml]

Re: Can someone please explain CE's pricing policys?

BTW the Bakersfield School station had a missing 3600 hose when I was there on Friday. Has it been fixed?

[rtry9a]

Re: Can someone please explain CE's pricing policys?

CE's pricing policy is a lot like our current Congress- apply the pressure of the monopoly to pillage and burn the innocents who wield no representation.

[Tax Counsel]

Re: Can someone please explain CE's pricing policys?

Can anyone venture a guess how or why CE charges $.65/GGE more for the same commodity? This is significant price difference and represents a much larger profit margin.

Eric ~ You've hit on a nerve that's on the mind of many members who live in So. Cal.

Lakewood suggests CE charges gasoline prices less 25 percent. My research--based on about 18 mos of data--indicates that it's gasoline prices less about 50¢ per gge. That formula held true even when gasoline dropped to $1.50 or so last year--even when the regulated ultilities were charging much more, suggesting that CE was selling at a loss for a short time.

You're right, either way it does not appear to be tied to the commodity price of CH4.

TC