Taxes per mile instead of per gallon?

Comment on the April 20 prediction: It was absolutely CORRECT, as prices rose to $2.99. But, I missed the hike on May 1.

Sunday, May 5, 2019, 11AM: Gas prices in California are over $4, and they are ready to go over $3 here. We may get a break short-term, as oil prices have dropped from $66 to $62 a barrel recently. Meanwhile, with the idea of a large per-gallon tax being proposed by the Governor, there is talk of other ways to think about raising enough revenues to keep the roads fixed, such as per-mile changes and congestion pricing. The Prius drivers of the world, getting 50-60 mpg, end up paying much less per mile that a typical car.

Meanwhile, here is an interesting graphic from OPIS that indicates what can influence gas prices along each part of the chain.

Only prediction today is that gas prices should drop slowly but steadily this week, and I doubt we’ll see a hike. -EA

Easter Candy Today; Fill Up Tomorrow

Sunday, April 20, 2019, 8AM: They gave us a break this Easter weekend, but we have the 0-margin price in the neighborhood of $2.75, and retail prices continue to drop. You can find gas below $2.60 in several areas of west Michigan. Expect a price hike on Monday or Tuesday, back to $2.95 or $2.99.

Meanwhile, if you are wondering how information about gas prices is shared to retailers, follow this link to PricePro.  -EA

Gas Prices Back Off of $3

Tuesday, April 16, 2019, 3PM: Retail gas prices topped out at $2.99 last Thursday, as oil closed in on $65 a barrel. Since then, the markets have calmed down a bit, and some places in west Michigan didn’t embrace to move to $3 gas. As of this afternoon, gas is $2.54 in Comstock Park, but there are many places in the $2.90’s, too. By my calculations, the 0-cent margin price is about $2.70, which means that if enough stations were near that price today, a hike prediction would most likely come true. Instead, with the wide range of prices, I won’t make a prediction today, but I’ll head up to Alpine to fill up soon. -EA

Mmmmm, profits!

Comment on the March 17 prediction: There was a hike, but it was to $2.85. Then, on Monday the 25th, to $2.95, which I did not expect. So, score this 1/2 CORRECT, 1/2 WRONG.

Saturday, March 30, 2019, Noon: It has been quite a nasty ride the past two months. At the end of January, you could buy a gallon of gas for less than $2 at certain Michigan stations. Today, we are sniffing $3 a gallon, and the hikes have been coming fast-and-furious. The price of oil has not been a big contributor, up only 10% the past two months. Instead, we have the usual Jan-May move up in gas prices and some “sorry not sorry” refinery problems. The biggest contributor, though, seems to be more aggressive pricing to raise margins. There were hints already in January, and I can see it in the spreadsheet I maintain. Moving into this coming week, although we’ve seen Monday or Tuesdays hikes every week lately, it appears that margins are high enough this weekend to keep the retailers at bay for now. By Thursday, who knows? Even the President is starting to notice. -EA

More Of The Same Expected This Week

Sunday, March 17, 2019, 5PM: Speedway’s aggressive play this year has continued into March, so I am suspecting a price hike is in the mix soon. Since the last price hike last Monday, wholesale prices have rose another four cents, while retail prices have slipped a dime. That would set us up to see a hike to $2.75 this week. Consider that a prediction. -EA

Rather have Whitmer raise prices than Speedway

Tuesday, March 12, 2019, Noon: Big Red’s aggressive defense of margins continues, as we saw a hike to $2.69 yesterday. Over the weekend, there was more chatter about Chicago wholesale prices, but I didn’t they would act this fast on Monday. If something (unlikely) happens with another refinery this week, we could be facing another hike, but I’m not expecting it.

Instead, I’d like to discuss Gov. Whitmer’s gas tax hike proposal. Here’s the issue — due to our freeze/thaw climate, our roads take a bigger beating than roads in, say, Texas. For other Big Ten states like Wisconsin, is it the same? Or is it worse in Michigan due to being surrounded by several Great Lakes? If it is worse, then we would have to spend more per mile than other states to maintain our roads.

Four year ago, I wrote a long posting on my blog comparing spending on Michigan roads with other Big Ten states. We were in the middle of the pack, and we weren’t getting our fair share of Federal dollars for roads, either. Maryland is at the top of the list, and I was there recently. They have good roads. I suspect things haven’t changed, and if that is the case, then we do need to raise the gas tax or find some other ways to properly maintain our roads. So, what is the best gas tax per gallon to do that? -EA

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