I don’t know if Speedway raises prices first or if the other guys do, but it’s pretty common to see 25-30 cent increases in Lansing on a Thursday afternoon. And almost always the Lansing Speedways are all at the same price. Does that mean all the Lansing outlets were losing money before the increase?

@Quick Study:
I’m not sure what you’re trying to say. Certainly gasoline is stored for some time, but not for 10 years. And what to farm prices have to do with this? Totally different commodities.

@Patrick:
Gasoline can last more than a year without varnishing, especially in bulk.

Prices went up about 4 cents last night and the Market has been up around 8-15 cents all day. There is an extremely good chance that prices will go up to $4.059 – $4.099 tomorrow. I really don’t see a way that this Hurricane isn’t going to cause enough damage to keep prices up for a week or more. The predictions keep looking worse every time I check.

John: I’m not sure what part you are disagreeing with about the 30 cents in less than an hour, the 30 cents or the less than an hour. As far as the 30 cents goes, most stations have a goal of averaging a 13-15 cent markup over their cost. Normally when Speedway goes up they pick a price between 18-22 cents above our cost for the day. 90% of the time that Speedway goes up it is because over half their stores are at or below cost for the day. For example, the day that we went to $3.959, our cost was about $3.75 and they had several stores that were below $3.609. Anytime that you Speedway move more than 20 cents, it is because that store was below cost before the move.

This is also the reason why everyone else moves so fast. If your margin is less than 10 cents, you are losing money on every credit card sale. So, if your margin is between 10 and -15 cents, you are going to be desperately checking Speedway’s price waiting for them to move so that you can quickly follow. The reason that we all have to wait for Speedway to move is because they only move up when the main office tells them. If I raise my price next to a Speedway, they won’t match it.

As for Costco (also Sam’s and Wal-Mart) they don’t need to make money on gas and they don’t care if they do either. They use gas as what’s called a loss leader, they are willing to lose money selling it to lead you into the store to buy more profitable items. I’ve read articles before about Costco tracking their profits per customers and between your membership fee and what you buy in the big store, they make much more off each customer than they lose on their gas (plus they get more members because of the gas). That’s why those of us that depend on gas profits to pay our bills, can’t match their prices.

Tiffany, Detroit is a different world than the rest of the State. For one, the only Michigan refinery is in Detroit and it doesn’t produce enough gas to ship it out to the rest of State, so their rack prices don’t have to be close to the rest of the State. They have the option to get gas from Toledo which is normally cheaper then Michigan. They have tons of competition, and whenever someone drops down to a stupid price, everyone else is forced to follow or lose customers. Plus, they have a lot of problems with unethical station owners that will lie, cheat, and steal to find ways to make money while pricing their gas unbelievably cheap.