Comment on Monday’s prediction: I am surprised to see a price re-set yesterday, so I was WRONG!
Friday, August 27, 2010, 9:00AM: After yesterday’s hike to $2.69, stations in Standale are already at $2.64 this morning. Here’s why — if you own the Clark station on Lake Michigan Drive, you saw the price hike by Speedway yesterday to $2.69, and you also looked at your books and if you use my spreadsheet, calculated the 0-cent margin price as $2.41 and the standard 20-cent margin price of $2.63. You thought, “Hey, I can sell gas for $2.64 instead of $2.69, still make the standard profit, and hopefully tempt drivers to come into my convenience store and buy some high-margin pop and snacks.” The point is that this is the latest in a decade-long series of attempts by Speedway to raise its margins on gasoline, and it just never seems to stick, as long as their is sufficient competition. Meanwhile, not expecting a price hike, I haven’t been urgently looking to fill up, despite being near 1/4 tank, so I went to Costco last night and bought gas for $2.59.