Comment on last Wednesday’s prediction: Prices jumped on Friday the 11th and again today, to a new record of $4.25, so the prediction was quite WRONG.
Tuesday, July 15, 2008, 8:45PM: If you follow my postings closely, one theme is that the retailers really aren’t making much money selling gas, taking in between 0 and 20 cents per gallon before paying the costs of running their stations. Is it possible, though, that the retailers aren’t doing so well AND there is some sort of collusion going on? Price behavior like this week’s makes me wonder. Nearly every time there is a price hike, Speedway hikes first, and the rest of the stations follow. This can happen without any information passing between competitors. However, when you see other stations hike first, like the $4.25 at the Marathon in Standale, while Speedway is dropping their price to $4.11 down the street, and then the next day Speedway is $4.25, I start to wonder which stations are on the secret price-hike mailing list. Yes, I know Speedway and Marathon are owned by the same corporation, but too often I’ve seen Marathon be the last to hike, and I can’t remember the last time they were the first. A few weeks ago, it was noted by others that Meijer’s appeared to be the first to hike one day. If there was a place for the media or an attorney general to investigate, I would say that they study the anatomy of a price hike, finding out who gets the e-mail and when.
Meanwhile, although prices re-set to $4.25 yesterday and today, a big drop in the wholesale price this afternoon will allow retailers to drop the price quickly if they want to. Maybe we’ll get back to under $4 after all. (Not a prediction!)