Friday, February 4, 2011

Gas prices continue - What a store should be doing

The national average was $3.11 per gallon today and by my house here in Miami it's $3.36 so I'm still wondering when it will reach $3.50. Seems the moment regular gas crosses the 3.50 mark people start giving motorcycles and scooters a second look.

Just watching the news I noticed Venezuelan Oil Minister Rafael Ramirez, who is usually hawkish on prices had a big press day announcing that prices could more than double to $200 per barrel if the Suez Canal closes due to the unrest in Egypt. I somehow doubt anyone will let it get to that point unless they want riots all over the world. I see the Egypt thing fixing itself in the next few days more than likely the moment they give Twitter and Facebook back to the country everyone should calm down.

I'm really not too worried about Egypt. It's hard to protest when there's no food in the supermarket so more than likely people will have to stop protesting sooner than later. So all this talk of the Suez canal closing is nonsense. The truth is U.S. gasoline inventories are at an 18-year high so what is driving this craziness besides speculation?

Either way stores need to consider this as a real possibility and start preparing for the summer. I know its hard to prepare for the summer when the nation is covered in snow and nobody is buying scooters, but this is an exact repeat of everything that happened in 2007.

Inventories at stores were low, we had a long winter, gas prices went up, distributors couldn't keep up and ordered 70,000 more units than the market could handle. The Chinese are still selling 2008 scooters for $600 a pop out of their warehouses. Even Puerto Rican importers are re-exporting 250cc units to the US marked with 2007 VINs for $400 so what is the deal?

The point is legitimate dealers carrying better brands like Kymco should stock up, prepare for the season and not get caught with their pants down. More at the Dealer Expo 2011.

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