Wednesday, 26 October 2011

Economics?

I thought I understood the basic rules of economics, but sometimes when I look at things in the Czech Republic I doubt it. Take for example the price of petrol.

In the UK if I want to buy cheap petrol I go to a big supplier, especially a supermarket petrol station. I would like to support one of the local independent stations, but the price differential is enormous. In the Czech Republic the reverse is often the case, better prices are to be found in the smaller outlets, so much so that it really is worth following the cheap signposts to the small independent supplier. Sometimes this is because fuel sales are a sideline to the main area of business (eg bus or lorry transport) but sometimes the reason is less obvious. How is this possible? Why does it happen? Surely the big suppliers can bulk buy fuel at a cheaper price? Answers to this conundrum welcome.

3 comments:

VS said...

I think it's because there is poor cartel control in czech republic and also local town hall corruption - big companies have sources to "persuade" local council to get best location for their gas stations.

Gormie said...

I think here you are supposed to pay for the brand. Theoretically, the big brands should have the high quality of their petrol guaranteed, whereas the quality of the smaller companies' petrol is questionable. At least they want us to think that.

kerray said...

The reason for this is that the large chains are seen as a guarantee of quality, while the small independent stations often sell fuel of lesser quality - this is the map of petrol stations that were fined for bad quality. You can see almost all of them are the small independent ones.

http://aktualne.centrum.cz/finance/grafika/2011/08/11/seznam-cerpacich-stanic-pokuta-coi-benzin/

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