Month: December 2011

This Week: #NotWinning the Gas Game

Comment on the December 19 prediction:  Pretty much CORRECT.  We did see several $2.99’s, and then we had a hike, but it was a bit higher than expected, to $3.39.

Friday, December 39, 2011, 8:30AM:  Well, we end the year with a loss in the Gas Game, as I did not expect the hike yesterday to $3.49.  Bill called it, though!  (Gas was still $3.16 at Costco last night, though — did anyone fill up?)  Looking over the last two months of data, it appears to me that Speedway and friends are trying once again to improve their margins.  To be specific, using the formulas posted on our site, I compute a 0-cent margin price (which is, in fact, a 10-cent below cost price) and when the retail price gets near or below the 0-cent price, we see a hike that gives us the 20-cent price.  In October and November, hikes were improving margins to a 25-cent price, and in December it appears that we rising to a 30-cent price (about 20 cents above cost).  We have seen for more than a decade, though, that reaching for a 30-cent price has been a challenge, as it is easier to competitors to undercut the price.  This already happened in Standale this morning, and Speedway on Lake Michigan Drive is at $3.46.

Some facts about 2011 prices:  The high price that I recorded for the year was $4.29 on May 2.  The low was $2.99 on January 5 and again last week.  So, we ended the year about where we started — just like the stock market (surprise, surprise!).  Oil per barrel topped out at $114 at the end of April, and got down to $75 at the beginning of October.

Happy New Year!

Spike line warning! 12/27/11

With prices falling below the spike line in Indy, Indiana and Michigan, I am predicting a spike up in prices soon. Thursday is a traditional day for this, and it may hold off until then. But the possibility is there for prices to start going up tomorrow. Expect Indiana and Michigan to go up to $3.35-3.39 and Ohio to go up to $2.29-3.35.

2-9-9-9 plan is on, and then we’ll probably get a hike for Christmas

Monday, December 19, 2011, 5:00PM:  Stocks, oil, gold, etc. have all fallen considerably the past week or so, which is why gas prices keep slipping lower, and we haven’t had a hike.  GrandRapidsGasBuddy reports a $2.99 in Caledonia, and I predict that we’ll see that number in a lot of places in the next 48 hours, followed by a Christmas present price reset Wednesday or Thursday, to somewhere between $3.19 and $3.29.  This is usually the time of year when gas prices are the lowest. –Ed Aboufadel

Lame Price Hike Fizzles Out

Sunday, December 11, 2011, 3:30PM:  In my last post, I noted the following:  “It appears that Speedway is trying to improve their margins.  They have not been successful in the past trying to do this.”  That appears to be the case again.  First, for more than a decade, every attempt to push margins higher has been stopped by the competition who start lowering prices very soon after the price hike in order to bring people in to buy more pop and chips.  Second, the hike occurred after a wholesale jump of 13 cents in a week, and then, of course, wholesale prices dropped at least a dime right after they raised retail prices.  The upshot is that at the moment, my calculation is that prices need to get down to $3.15 or so before another price hike happens.  This can change on Monday, of course, after the markets open and wholesale prices change, but if you are wondering how we went from $3.45 on Tuesday to $3.19 in Kentwood this afternoon, I’ve given you two reasons.  No prediction right now about what happens this coming week.

Price Hike Day: $3.45!

Comment on the November 21 prediction:  It was fun to predict $2.99, and we got down to $3.06, but I guess I was WRONG.

Tuesday, December 6, 2011, 10:51AM:  I thought it was time this morning to figure out where we are at with potential gas prices, but I see that the Speedway web site has posted $3.45 a gallon at some stations, so it is PRICE HIKE DAY. Fill up!  $3.45 seems a bit high given the relationship in the past between wholesale prices and price-hike day prices, but I thought the last hike to $3.35 was a bit much, too.  So, it appears that Speedway is trying to improve their margins.  They have not been successful in the past trying to do this.

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