Annoying Hikes, and Ten Years of the Gas Game Blog
27 comments Tuesday, 06-12-12 | Posted By Ed Aboufadel | Predictions
Comment on the May 30 prediction: The “no price hike” prediction was good for a week (CORRECT), but then we got hikes on June 5 (to $3.79) and June 11 (to $3.89).
Tuesday, June 12, 2012, 8:30PM: Time to get annoyed. On May 11, oil closed at $96.13 a barrel with Chicago wholesale prices at $2.98. This evening, oil closed at $83.32. Chicago wholesale price: $2.98. Something is affecting local prices, and I am not happy about it, and have not been able to detect possible price hikes. I’m here in Boston right now, and retail prices are 20 cents lower. So, what to do? I think wholesale prices will be dropping — they are 5 cents lower than yesterday — so retail prices should be working their way down to $3.69 by Monday. That’s a prediction.
By the way, 10 years ago today I created the Gas Game blog and here was my first post: “Wednesday, June 12, 2002: Gas price in Standale this morning was $1.34. Expect prices to continue to decline until early next week, getting down to $1.24.” That first prediction turned out to be WRONG. $1.34 a gallon?
Congrats on a great 10 years! I’ve been following for many of those years. Keep up the good work and know that there many who appreciate what you do!
Congrats on your 10 year achivement!
Know that there are many who appreciate what you do and your expertise.
Ed; I sent you some chart analysis that anecdotally shows that the Mid West is missing out on about 40 to 60 cents per gallon because of high CBT Wholesale Gasoline.
You will recognize the source data charts.
In Michigan, Meijer is offering a 10 cent / gallon discount for their cc holders thru Labor Day, and they raised their price the day they started this. I wonder how that will affect their ability to match competition, and their competitor’s willingness to lower prices.
One only needs to drive thru Chicago to recognize how bad the situation is. Oil at $83 and gasoline at $4.11?
Unfortunately, consumers let them get away with it.
That’s what I call speedy service!
Thank you Patrick DeHaan!
That was an important fix, because jimmyjamz’s vandalism was so massive, it raised the Toledo average up over $3.82. The current Toledo average, presumably correct now, is $3.767 with only 4 stations above $3.799, two of which are Sunocos at $3.859 on either side of milepost 77 on the Ohio Turnpike.
RE Scott -
Another way you could tell this was not a real Speedway reset was that the price was $3.909 ($3.929 in one case). In the past decade, virtually all Speedway resets have been to prices ending in a 5 or 9, e.g. $3.859 or $3.899. The last time I remember Speedway going to a price that wasn’t a 5 or 9 was, I believe, spring last year, when the gasoline wholesale market was legitimately going up and Speedway went to something like $4.179.
You could also tell it wasn’t a legitimate Speedway increase because they just went up the day before. Speedway does sometimes go up and then again 2 days later (e.g. Tuesday then Thursday), but it is not very often and usually only when the wholesale market is legitimately up in the spring and summer. Probably the only legitimate time Speedway has gone up consecutive days in a row was like during Hurricane Katrina in late August 2005. Read the posts from that time: http://www.thegasgame.com/2005/08/
*****
Since my last post, the Kalamazoo independent retailer has raised its price 10¢ to $3.899 credit / $3.849 cash, while the competition has lowered its price to $3.859 for both cash and credit.
No change on DIESEL at that one Speedway. It has now been 20¢ higher than the station across the street for one full week as of this evening. I checked the pump and that Speedway is indeed selling diesel for $3.899.
The Chicago spot fell 5.14¢ (1.7%) yesterday to $2.9802. That moves the Michigan spike lines to:
$3.784052 without a rack adjustment, plus 10¢ summer surcharge
$3.684052 without a rack adjustment
The Michigan average is currently $3.853, 16.8948¢ above the no surcharge spike line. If the Chicago spot stays the same or falls over the next few days, it should be a minimum of 6 days until the next reset.
RE Turbo46032 -
The “free market” doesn’t get 100% blame for Chicago gas prices. The federal and local government is a significant player, particularly the EPA requirement for more expensive reformulated “cleaner burning” fuel in the summer and Cook County and city of Chicago sales taxes.
Maybe Patrick can give us a more complete explanation for why Chicago prices are consistently so much higher, currently an average $3.987 and the highest in the nation outside of California, Oregon, Wasington state, Alaska, and Hawaii. Ann Arbor has the second highest metropolitan area average outside the west coast, currently $3.875. Ann Arbor consistently has the highest average in Michigan.
*****
The Admirals in Sturgis have given up their massive loss leading ($3.289). The lowest reported price in Michigan now is $3.499 at a Marathon in West Branch, off I-75 north of Saginaw. Admiral in Sturgis is now $3.789 while about half the stations in town (including Wal*Mart’s Murphy*USA) are $3.899.
At midday the Chicago spot is down 18 cents!! Whats up with that??
independent retailer
At midday the Chicago spot is down 18 cents!! Whats up with that??
—-Hopefully will keep dropping to par w/ NYH RBOB. Sucks paying $3.79 for reg when PREMIUM Shell is $3.29 in Covington, Virginia.
The problem I’m seeing is not with Chicago retail prices – it’s with how Chicago wholesale prices affect the rest of us 200 miles away… $82.50 and $3.85 here in Indiana is a bit off the chart.
Turbo – I’m 300 miles away, I feel your pain.
Pricing in Northerm Mi has gone from $3.5x two weeks ago, to a giant $3.90- which then settled down to $3.61 over that week and just this past weekend again jumped back to $3.90. A day later, .3c down, a day later .3c down.. Has anyone seen a justifiable reason why chichago spot is so damn much higher than the rest of the country. I’m getting kind of sick of these prices with nationwide spot prices such a significant amount lower.
Yes indeed. The Chicago spot finished yesterday down 18.48¢ (6.2%) to $2.7954. That dropped the Michigan spike lines to:
$3.588164 without a rack adjustment, plus 10¢ summer surcharge
$3.488164 without a rack adjustment
The Michigan retail average is $3.832.
For people in most of Wisconsin, Michigan’s upper peninsula, and west to the Rocky Mountains, their gasoline market closed yesterday at $2.8454. New York is currently $2.6682.
RE Juscurious -
I don’t think Meijer’s 10¢/gallon credit card discount through Labor Day will have any affect on their ability to match competition. If they don’t match the competition, it will lessen the value of their credit card discount. The promotion was probably already going to start on Monday. The fact they raised gas prices on that day had to do with Speedway raising their prices, nothing to do with the promotion beginning.
RE Turbo46032 -
Here is a map that shows the gasoline wholesale market areas across the nation:
http://images.gasbuddy.com/images/blogimages/20100920120936gbPADD.png
Either us or New York is the smallest market based on geography, so the effect of one refinery in our market is larger. Apparently, the BP refinery in Whiting, East Chicago, and Hammond, Indiana has the largest single affect on the Chicago market. This is BP’s second largest refinery and the sixth largest refinery in the nation. This refinery began operation in 1889, 7 years before the automobile.
Chicago is higher than most of us for 3 very good reasons.
1.) They are required by the EPA to use a different mix of gasoline to reduce emissions.
2.) Illinois has higher taxes on gas.
3.) It’s a big city, many factors about that drive up the price of everything.
As for higher prices now, we’ve had refinery problems in Whiting, IN (BP near the lake); Kentucky’s Marathon refinery, and a refinery in illinois (I believe Sunoco, but too lazy to look it up again). This has caused our price to go a lot higher than it should. It seems to be correcting itself now. We are still about 10¢ nigher than the national price, and we usually see 10-20¢ discounts when the conditions are good. With the big drop, we are seeing big margins, and prices should fall going into the weekend. We shall see what Monday brings.
There’s a smaller chain of gas stations called Mutual station here and went DOWN 8 cents a gallon today from $3.799 to $3.719! Good Luck Greedway on matching that price! I was laughing when I saw more people at Greedway instead of Mutual next door.
I don’t recall the BP refinery having issues when price of oil is super-high and correspondingly the price of refined gasoline is high.
This has been going on for the better part of a decade. Oil is priced high, then reality hits and oil comes down, but unfortunately an ‘event’ seems to always occur that hoses the consumers.
As the “Vultures Picnic” book put it so elegantly, it’s the Smart PIG (Pipeline Inspection Gauge) that finds problems ONLY when it suits the oil companies. If we try to rationalize them (i.e. a squirrel really did take out a refinery) we simply provide them more rope with which to hang us.
I’m in Seattle this week and everyone’s prices are well over $4.00, up to $4.30 someplaces, except Costco which was at $3.79. Cheaper than Indiana… I recognize that we have thrown away rational pricing many years ago but right now it is well beyond this…
The state of Indiana has just announced that they have collected much less road taxes in the last year than in previous years. Ya Think? solidly $3.45 to $4.27 gasoline wouldn’t make people seek a way to lessen the bill? Raising the price of something by doubling it never sold more of it. Next thing coming down the road will be a mileage tax with GPS in our cars. The governments almost never, never do with less.
Can you tell me if I’m reading this correctly? Under the wholsale prices, Gas is at
$2.6629. Is that down roughly .13 cents from what was talked about on June 14? So, would that indicate gas prices still going down for a few more days?
Diether-
http://www.platts.com/weblog/oilblog/2010/04/08/illinois_gasoline.html
Plus gasoline taxes, and cost of doing business in Chicago/metro.
On top of a 10¢ drop Friday, the Chicago spot fell yesterday (Monday) 9.83¢ (3.67%) to $2.5834. This moves the Michigan spike lines to:
$3.363444 without a rack adjustment, plus 10¢ summer surcharge
$3.263444 without a rack adjustment
The Michigan retail average is currently $3.701, 43.7556¢ above the no-surcharge spike line. If wholesale gasoline were to remain at its current price or lower, the soonest I would expect a reset is Thursday, June 28. After that, Independence Day is the following Wednesday, so that reset may hold off until Monday, July 2. Of course, there could be a refinery fire, pipeline break, or something at anytime that could send the Chicago market up, so there is nothing close to a guarantee about these dates.
The national average is currently $3.528. Other averages:
$3.883 Chicago (highest in nation outside of west coast, 20th highest in nation)
$3.751 Ann Arbor (highest in Michigan)
$3.728 Illinois (highest state average outside of west coast)
$3.685 Grand Rapids
$3.675 Kalamazoo
$3.670 Cincinnati (highest in Ohio)
$3.651 Gary (highest in Indiana)
$3.629 Flint (lowest in Michigan)
$3.602 Fort Wayne
$3.561 Champaign (lowest in Illinois)
$3.540 Toledo (lowest in Ohio)
$3.406 Evansville (lowest in Great Lakes, no Speedways)
That uncompetitive on DIESEL Speedway is still $3.899, while its competitor across the street is still $3.699. This has been the situation since the evening of Wednesday, June 6, about 12.5 days ago.
RE ChrisDG74, NorthernMi -
New York July gasoline futures are currently $2.6573, 7.39¢ above Chicago.
New York July WTI crude oil futures are currently $84.01.
RE Andrew, Traverse City -
“I was laughing when I saw more people at Greedway instead of Mutual next door.”
Yes, that is frequently the case. Speedway has been effective in earning customer loyalty (much like McDonald’s), possibly because of the Speedy Rewards program. If you remember about 20 years ago, Speedway had passports where customers collected stamps for their purchases, before it was replaced by the current plastic, magnetic stripe card.
RE turbo46032 -
The west coast (California, Oregon, Washington) is cut off from the rest of the country by the rocky mountains. So, when they have a refinery outage, they are on their own. When we (the Great Lakes) have a shortage, we can get extra supplies sent by pipeline from the gulf coast. Further, the environmentalists on the west coast make it near impossible to expand refining capacity in their market.
RE TimmP -
Michigan has proposed higher automobile registration fees as a partial solution to declining road taxes. All that will do is encourage more poor people to drive unregistered vehicles. Then they get caught by the police and get hit with Michigan’s $1,000/year driver responsibility fee for 2 or 3 years, which they can’t afford and encourages them to engage in more illegal driving just to live their lives (there is really no transportation alternative for people who don’t live in or near cities the size of Kalamazoo or larger). The higher taxes are raised, the more tax avoidance people will engage in. Another problem with funding roads through registration fees is out of state travelers don’t pay registration fees. The current state gasoline tax IS paid by out of state visitors who use our roads. That is one problem with the odometer tax: out of state visitors won’t pay it. Also, an odometer tax will result in a whole new underground industry of rolling back odometer mileages and such.
My solution to the road funding problem is to get the federal government out of the game. Eliminate the 18.4¢ per gallon federal fuel tax and let states raise their own taxes however much they need, which will likely be less than 18.4¢ in a donor state like Michigan (i.e. we never get back 100% of the federal fuel tax we pay in).
If you fear an odometer tax, you should push for a solution like getting the federal government out of road funding. I know it is near impossible to ever wrestle control back from the federal government, but I know nothing will change if we don’t try. Keep this in mind when you vote in the primary in August and the general election in November. Vote for candidates who would return power and control to the states.
In the past, the federal government has held OUR road taxes hostage in order to force states to pass seat belt laws, motorcycle helmet laws, lower blood alcohol limits, speed limits, etc. We don’t need to be getting ripped off AND controlled.
I’m aware of the refinery “incidents” out West but their low prices are only a few cents more than Indiana or par with them. And state gas tax be darned, the Seattle area has state freeways that are pretty good. The issue is in the Midwest and the faster we realize it the better we will be…
I’m in Kansas City. Our gas price went up 10 cents a gallon on Monday..and another 10 cents a gallon on Tuesday. WHAT the WHAT?! Paying $3.57 a gallong for regular here.
Rika
I’m in Kansas City. Our gas price went up 10 cents a gallon on Monday..and another 10 cents a gallon on Tuesday. WHAT the WHAT?! Paying $3.57 a gallong for regular here.
—We’re paying $3.65 in Cincinnati. That’s after coming down 14 cents in the last week. We would kill for that $3.37 you were paying Monday.
Since my last post, the uncompetitive on DIESEL Speedway has FINALLY matched the competition’s price of $3.699. It “only” took about 2 weeks.
The Chicago spot finished today down 2.64¢ (-1.04%) to $2.5151. This drops the Michigan spike lines to:
$3.291046 without a rack adjustment, plus 10¢ summer surcharge
$3.191046 without a rack adjustment
With the Michigan retail average 32.2954¢ above the summer surcharge spike line, we may not get a reset until Monday, July 2.
Current retail averages:
$3.614 Michigan
$3.602 Grand Rapids
$3.599 Cincinnati (prices here continue to be much higher than expected, why?)
$3.548 Kalamazoo
$3.517 Indiana
$3.508 Ohio
$3.507 Fort Wayne
$3.507 Kansas City, Missouri
$3.496 NATIONAL AVERAGE
$3.327 Evansville (lowest in the Great Lakes; no Speedways)
$3.278 Lexington, Kentucky
$2.955 Greenville, South Carolina (lowest in the nation)
New York July gasoline futures settled down 4.01¢ today to $2.5501.
New York August WTI crude oil futures settled down $3.25 today to $78.20. The currently highest priced contract is December 2020 at $86.05.
Marathon Petroleum Corp. (MPC) stock closed today at $41.33. That is $3.45 (9.1%) higher than when I last posted about them on June 11.
My local speedway (48312) went from $3.599 yesterday down to $3.459, and then back up to $3.479. Interesting. I hope these prices continue downward with oil at $78. Last times it was this law, prices were in the $2.70′s.
Anyone know what prices were last time Brent was at $90?
“They” seem to be pricing wholesale based on Brent prices, since it’s higher.