$3.09? Really?

Friday, November 14, 2014, 9:30AM:  This week, we’ve seen hikes in Indiana to $2.99 and yesterday in Michigan to $3.09.  These jumps haven’t really fit the Gas Game historical pattern, and yesterday’s Michigan jump looks like a desperate effort to make up for some losses on old inventory purchased at a much higher price in September.  Expect significantly lower prices, as oil fell to its lowest price this year late Thursday, and gasoline futures followed.  Ethanol is back up, but I am still estimating a price to retailers of about $2.75, so there’s a lot of room to drop. –Ed A.

Updated: November 14, 2014 — 9:21 am

39 Comments

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  1. I just read an article about yesterday’s 4% drop in oil prices, and a 31% drop sine late June. It seemed a bit ironic in light of yesterday’s spike in mid-Michigan. I managed to fill up for $2.79 after work yesterday.

  2. 2nd spike to 3.09 in a week. Funny how gas jumped from the low 3.60s last week to 3.09 then this week from the low 3.80’s to… 3.09 on a near uniform basis. ( the exceptions were 3.08) Sorry folks, clear pattern of set/agreed pricing. I agree with Ed. This wasnt market or or supply driven, it was a clear move to make up for additional profit ‘shortfall’ Shenanigans.

  3. I managed to fill up for $3.699 in Indy before the spike. 2 days after the spike I’m seeing many stations in the $3.70s so that’s a sure sign of greed pricing. For a legit hike, they never drop that quickly.

  4. You sure can tell where Speedway’s influence ends, driving south through Kentucky. Lexington is currently 2.93-2.95. As soon as you get a few exits south of the suburbs, the price immediately drops to 2.65. Same state, same taxes. No Speedways.

  5. Yes, I have always felt the real reason for all the price swings, was not to give us few “savvy” people a break once every 7 to 14 days with a drop just before a the BIG wave increase. But to obfuscate the actual real average, daily, weighted margin given all the long days between the lowest price of the swings. Obfuscation: But only a few of us have figured out where and how to see through it while the masses, the real huge majority, is content with purchasing after the price drops a nickle after the big spike.
    http://en.wikipedia.org/wiki/Obfuscation

  6. I thought so too. But if you think about it whether we “know” the “real” price or not is immaterial. It’s not like I’ll drive to Ashland KY to fill up and come back. If I know I’ll be a little more ticked off but still I have to fill up.

    This is really what bothers me here. Speedway has set up an entire system of yo-yo prices, but why?

    On the average, we are paying a bit higher than we should despite Ren’s proclamations (think North Carolina… Not national). But they could simply hike the prices and leave it at that. They have the power to do so I would think.

    The thing is that they risk alienating their customers far more than they are profiting from the strategy – or so it seems to me. The return to slightly more sane practices in the last few months has been a refreshing one.

    Nor is it to drive people “inside” by stopping at the stations more often. Not unless there’s way too many people who need huge drinks and smokes daily.

    In my humble opinion it’s either some completely off the wall reason us common mortals can’t begin to comprehend or the last person who knew the reason retired and nobody knows why any more but they’re doing it.

    I understand pricing power and won’t begrudge a company using it to make more money. But what Speedway is doing makes little sense financially. At least to my non expert eyes.

  7. independent retailer

    My cost on the 14th 2.89

  8. Although the CHicago site average mutes any changes, the hike here to $3.09 on the same date didn’t have any upward effect on the average.

  9. independent retailer

    From the article “According to financial data provider Sageworks, profit margins at privately held gas stations were 1.7% in the 12 months ending October.” 1.7% of 3.09= about 5 cents.

  10. As I have said in the past, it is much easier to “overcharge” during price drops than price increases.

  11. Several Cincinnati stations NE & outside of the I275 circle are $2.49. Filled the wife’s Ford Focus Saturday ($2.65) for $20. Cincinnati average set to cross the $2.70 threshhold today.

  12. There is one Sunoco station here on the west side of Lansing that raised their prices yesterday afternoon from 2.86 to 3.25. Everyone else seems to be dropping prices.

    Is there any chance they jumped a bit early on a spike? Anyone know what wholesale gas prices are doing?

  13. And there’s your answer… Speedway is jumping prices in Indy/Indiana and Ohio to $2.89 from look of it, $2.99 in Michigan

  14. I guess they have to beat the holiday travel rush.

    Most of the stations around where I live never got below 2.85, but there were stations in other parts of Lansing that got down to 2.72-2.73.

  15. Spike to 2.899 in sw Ohio, led by GREEDway. Topped off for 2,45 yesterday.

  16. Spike to $2.89? No respectable squirrel would act on a 2.89 spike…

    Meijer just sent theirs.

  17. South Bend,IN. Speedway spike to $2.89 is underway. Fill up in the low $2.70s where you can.

  18. I guess we got too close to the $2.70 threshhold in Cincinnati. Hopefully I can top off this evening to avoid this unnecessary spike.

  19. 2.99 Kzoo area.. Guess for Thanksgiving we can just be thankful it’s not 3.09

  20. Really? Indeed!

    we have a 25c (positive) spike line deviation last Friday in MI. Even given that we have reports from independent retailers that show perhaps a 10c difference from the gas game charting, that leaves 15C profit PRIOR to today’s spike.

    I find that brazen even by greedway standards.

  21. @ Turbo where are you geographically? I have Meijer texts but have not received one for this spike. It looks like Speedway are the only stations going up right now in my area but that is NW indy. Did I miss my Meijer text or are you in an area outside Indy?

  22. GREEDway’s latest spike of $2.89 is 93 cents above Chicago spot. Unbelievable.

  23. I’m in Carmel….

  24. Family Express lead a spike to $2.89 in the NW Indiana region. Was surprised to see a spike…numbers didn’t really point to one.

  25. 10 days a go, when people were commenting on the non-need for the spike at that time, I was thinking “To set up the spike for Thanksgiving!” but I never really believed it myself. AND YET here it is. I guess Speedway just feels we should all be happy at gas under $3.00, not unhappy about the increase in cents per gallon they are taking.

  26. Look at this good news!

    The Convenience Stores of Speedway will soon be in your neighborhood!

    Speedway is expanding our Midwest roots to the east, transforming more than 1200 Hess Express and WilcoHess stores to the Speedway brand, bringing the ultimate in value, the widest selection… and Speedy Rewards, the best rewards program in the business! Be on the lookout for newly branded Speedway stores near you!

  27. (Robert)..Great news..now others can see what “Great” neighbors Speedway are… sorry choking right now…..

  28. TimmP. Iwas thinking the same thing at that time. Also the small spike we had in Michigan last week matched up with deer season.

  29. I figure with around 30 spikes a year that GREEDway seems to have it is almost impossible for most of their spikes to not be near a given holiday. I really think we were on the safe side because the numbers didn’t seem to be there but I almost forgot, we’re talking GREEDway here.

  30. I would love to see how our spirited eastern compatriots would take to Speedway’s antics.

    Maybe we can find one state where they will have good pretense and see if they will try to pull the same stunts.

  31. Turbo46032…
    I don’t think Speedway would have taken on all those stations (more than doubling what they had before) unless they believed they could implement their business model.

  32. Agreed. It will be super-interesting to see them try it on liberal eastern states. To us Speedway-weary and generally conservative Midwesterners they’re just an annoyance that we have dealt with for decades, but a whole new experience both for their customers and competitors.

  33. Fortunately this latest minor 10+ cent spike doesn’t seem to have much staying power, with a lot of stations in Grand Rapids back below $2.90 already:?)

  34. Since spike to $2.99 on Monday, pump prices have dropped 22 cents but our rack price is only down a nickel. Pump prices will probably drop another dime or more over the weekend due to the never ending Admiral/Wal-Mart price war. Which means that by Monday we will probably be selling it at or below cost again. Market was down big today but since it is the day after the Holiday rack prices had little change. Won’t see that market drop until Monday night’s price change.

  35. 2.55 And falling in Muncie,IN
    Hopefully. this will be quite common after today’s drop in crude price .

  36. Well, we’re only down 4 cents in sw Ohio. We got up to a high of 2.85, post-spike. We now sit at 2.81. I saw spot has fallen 13 cents since close Wednesday, to 1.75. If that’s true, we have a LONG way to drop. We should be around 2.40.

  37. And oil prices fell almost $8 a barrel.

    http://www.cnbc.com/id/102224725#.

  38. Greedway will squeeze every cent out of us they can before they lower their price. There is no way we should be around 2.90 in Kalamazoo area.

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