What is the stand inversion?
Stand inversion is an industrial term for a phenomenon that occurs when gas and oil prices are rising radically, causing independent petrol stations to be charged extremely high wholesale prices for their gas. Independent operators usually pay significantly less than their branded counterparts, allowing them to sell this gas with a discount. When the stand inversion occurs, they are forced to hand over the price to consumers, which means that their prices are radically rising; In extreme cases, the stand inversion means that independent operators pay almost equally wholesale gas prices as consumers on the pump brands. They buy what is called "point gasoline", gas sold from refiner to fuel companies and dealers to mix it and sell it to other operators. Usually, point gasoline is sold for branded operations for the first time and then buy independent operators with a discount. The amount of this discount varies, while independent operators apply to the so -called "pricesstand ”for your gas.
Several factors can lead to a stand inversion. One of the factors is a shortage that can be caused by a wide range of things, from natural disasters to conscientious efforts to reduce excess gas production by refineries. The stand inversion can also be caused by rising oil prices, which can cause the stand prices wildly fluctuating, not only from day to day, but also several times in one day. It can be a nightmare for independent operators who in turn would be obliged to increase their own prices during the day to compensate for the price difference.
When a stand inversion occurs, branded gasoline prices tend to remain a little more stable because they often have a contractual price. While their prices increase, the stable increase in the growth is common and the prices change during the day. As a result, independent operators may begin to feel a pinch because they try to cope with growingand prices of racks for point fuels. Consumers can also be threatened with branded stations, recording huge price differences, which can force independent business operators if the stand inversion is extended.
In order to deal with the possibility of inversion of the stand, it is common for an independent station to complement their income with connected shops and other equipment in the hope of replacing potential lost profits by encouraging the station to buy other things. In some cases, the station can bring the loss of gasoline sales to attract customers in the door, hope that they buy refreshments in the store or various stocks sold by the station owner.