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

Updated: December 19, 2011 — 5:04 pm

14 Comments

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  1. 10:44 a.m. Tuesday

    We’re good for today. You’ll definitely want to fill up now for as low as $2.989 in Caledonia (Grand Rapids area) and $3.039 in Parchment (Kalamazoo area). Prices lower than those might be found between now and tomorrow morning.

    THE SPIKE LINE HAS NOT BEEN UPDATED SINCE THURSDAY. I do not know where to get the data for the rack adjustment.

    Current averages:

    $3.115 Grand Rapids
    $3.136 Kalamazoo
    $3.168 Michigan
    $3.219 USA

    The lowest reported price in Michigan now is $2.869 at Boggs in Ypsilanti.

    New York January gasoline futures closed up yesterday .21¢. TODAY, THEY’RE UP A BIG 8.6¢ to $2.5751. So, it’s starting to look LIKELY THAT THERE WILL BE A RESET TOMORROW (WEDNESDAY).

  2. You updated The Spike Line, but the calculation for Michigan went wrong. Using your rack adjustment, I manually calculated a Spike Line of $3.176062, which is 2.9062¢ above the current Michigan average of $3.147. You have it as $3.0588 with a 10.92¢ margin above The Spike Line.

    My calculation suggests an increase today to $3.359 or $3.399. The lowest price currently available in Kalamazoo is $3.019 in Parchment with a metro average of $3.116. The lowest price currently available in Grand Rapids is $2.979 at D&W on Cherry Valley Ave. SE in Caledonia with a metro average of $3.099.

    The U.S average is $3.22 according to GasBuddy and $3.206 according to AAA.

  3. $3.399 is the new price for Michigan. The first Speedway reported up to this price was at 9:53 a.m. in Holland on Chicago Dr. The second report came at 10:02 a.m. from Caledonia on Cherry Valley Ave. SE. Speedway’s website does not yet reflect these increases.

    In Indiana, the new price is also $3.399, with the first report coming at 9:37 a.m. from Goshen. There is a report of $3.499 at 9:54 a.m. from Elkhart, but I’m assuming that was a data entry error.

    Surprisingly, $3.399 is also the price in Ohio, which is usually a nickle less than Michigan and Indiana. Their first report came at 9:18 a.m. from Maple Heights.

  4. I tried putting in every last zip code around Lansing at 11:00, and every single Speedway had been updated to $3.39. Did they all really jump at the exact same time or do we still have holdouts? I can’t remember them all hiking at the same time before.

  5. Anyone else from the Kalamazoo area read this site? I’ve noticed over time that the BP on Oakland Dr. at Centre Ave. regularly drops its price to the lowest in town once it gets word that Speedway is going up. That occurred today, as they dropped to $2.999 shortly before 10:25 a.m. before going up to $3.399 shortly before 11:27 a.m. So, if you are in that area around 10:30-11:30 a.m. and know an increase is imminent, you might want to swing by the BP and pick up the lowest gas price in southwest Michigan.

    It is interesting to see the Marathon in Sturgis on U.S. 12 at Balk Rd. was reported at $3.399 as of 7:19 this morning. As of the moment, all other stations in Sturgis are still reported at $3.169 to $3.209.

  6. @Diether – Oakland/Centre BP. Was the $2.99 the “with car wash” price? I think that station does a $0.10 discount with a car wash and is listed first/top on the corner sign.

  7. @Aaron — I think what happens sometimes on the Speedway site is that they put in the new price for all the stations simultaneously, even if the hike hasn’t been implemented at the actual stations yet.

  8. @Ed- from what I heard and saw once I was out and about this morning, this hike was actually very quick… quicker than any I have seen in a while. There were indeed no holdouts for long, except one Clark station on the east side of the area. There was next to no time to act, so I’m glad I got it at $3.01 last night!

  9. @Aaron — it seems like once every two months, they have one of these “no holdouts” price hikes that has a different dynamic like you have seen. Not only are there no Speedway holdouts, everyone else falls in line, too, in short order. I should start documenting when this seems to happen. I really don’t believe there is actual collusion going on between stations — that is, I don’t think there is direct, regular communication between, say, Speedway and Shell. But, if there is, these no-holdout-hikes would be the smoking gun.

  10. Yesterday, in Fort Wayne, I have never seen the prices all go up in such a united fashion. There may have been a few holdouts after 1:00 PM, but I never saw them except for the Krogers and Sam’s. It was like a tornado of price changes, all up, all at once, and all to $3.39. I was fortunate to have bought 16 gallons at Sam’s Monday for $3.06 and topped off my tank Wednesday morning at Shell/CircleK for $3.08. I see wholesale gas is climbing like a fiend again today, too.

  11. We had a Greedway gouge-fest in SW Ohio yesterday. Low-end stations were 2.87 pre-spike. Now everyone is sitting at 3.39. That 52-cent, one day spike is the largest I have EVER seen.

  12. It seems like the definition of collusion should be expanded to include what this region’s gas stations do … whatever that may be.

  13. I doubt they are colluding (but wouldn’t be surprised if they are). Short of collusion, there is the appearance of existing in each and all areas, a bold price increasing leader and a lot of dedicated pricing lemmings.

  14. Friday, December 23

    While retail prices have fallen significantly the past 2 days, the market price has continued to increase. Since my last post, The Spike Line has increased by 11.7978¢ to $3.29404. Included in that is today’s 4.52¢ (1.766%) increase in the Chicago spot to $2.605, which roughly mirrors today’s 5.88¢ increase in New York futures to $2.6398.

    Markets will be closed Monday for “Christmas Observed,” because Christmas falls on Sunday. I’ll assume Speedway corporate offices will also be closed that day. So, the next business day, Tuesday, will be pretty much be looking at today’s closing market prices. As a result, like the Monday after Thanksgiving, we might see a reset on Tuesday, December 27 to $3.499. The best time to fill up would be on the way to work Tuesday morning. Of course, no prediction is certain, so use your best judgment.

    *****

    Aaron W. —– As I have posted several times before, Speedway’s website updates every 30 minutes (they claim; it seems hourly from my observations), with the most relevant update occurring at 10:47 a.m. ET. If you hit their site right during the 20 seconds it is updating, you’ll see n/a for all the prices. I have consistently and repeatedly seen new data on their website at this exact time over an extended period. There is another update that occurs somewhere around 9:45 a.m. While I don’t normally see new prices at this time, I do sometimes see a few stations on the days Speedway goes earlier than normal (I consider normal to be 9:45 to 10:30 a.m.). Every single station has always, in my experience, been updated on Speedway’s website with the current price by the 10:47 a.m. update, because they in fact raise prices around 9:30 to 10:30 a.m. This is why in many of my posts I document the times GasBuddies check in with the first prices. So, no they don’t all raise prices at exactly the same time, but by the time of the 10:47 a.m. ET Speedway website update, they have.

    Derek D. —– I don’t know. I only know what the GasBuddies report about that station, as it is outside my normal travels. I have regularly seen that station pop up as the lowest in town during the 1 or 2 hours following a Speedway increase. This week, they were at that price for only about an hour, about 10:25 a.m. to 11:25 a.m. I never see that station as the lowest at any other time. GasBuddies are supposed to report the regular price for credit card users, not any prices discounted for cash, car washes, or anything else.

    Ed —– I’ve seen that allegation made, but I have no reason to believe it. GasBuddies, Twitter users, and Facebook posters regularly report Speedway increases an hour before Speedway’s website updates. Further, when Speedway goes especially early, a few stations are picked up by the aprox. 9:45 a.m. website update. So, on the way up, I believe all the stations are in fact at that price. I believe the website lags the street prices, rather than the other way around, which is what you allege.

    Aaron W. —– Seeing that this was a major holiday weekend, independent stations were expecting Speedway to increase were ready to go as soon as Speedway did.

    Ed —– This was certainly a no-holdout increase, as the Speedway in Sturgis also went up. With a normal increase, every Speedway in southwest Michigan except Sturgis goes up. There are normally a decent number of Grand Rapids stations that also don’t go up. I think there were no holdouts because of it being a major driving holiday weekend that is extended by Monday’s “Christmas Observed.”

    ChrisDG74 —– Yea, I was surprised Ohio also went up to $3.399. Ohio is normally a nickle or dime less than Michigan and Indiana. Sometimes, there will be an east/west Michigan split, where the east side of Michigan goes up a nickle higher than the west side.

    TimmP —– You have it correct. Everyone waits for Speedway to go up, the great majority of the time. If those of us who are not in the retail gasoline business can anticipate when Speedway is going up, it must be even easier for those who are in the business who have the most current and direct pricing data from wholesalers. There have been a few rare occasions where Speedway doesn’t go up when expected for a few days, and eventually the other stations start raising their prices, but not nearly as high as if Speedway had gone first. A conspiracy among retailers is called price fixing and is illegal under federal law: http://en.wikipedia.org/wiki/Price_fixing

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