Strike Fast! Strike Hard!

Comment on the January 31 prediction: They held out to Monday, and then prices rose to $2.39. CORRECT!

Sunday, February 24, 2019, 1PM: I’ve been reading a scifi novel this month called Hellhole, which features an evil empire whose fight song is “Strike Fast! Strike Hard!” Feels like this has been the motto of gasoline retailers this month, raising prices twice in surprising fashion, given the margin calculations. I’m starting to think that Big Red is trying to stretch profit margins, which it attempts once or twice a year to do, usually without any permanent damage. For the last two hikes, prices were about a nickle ahead of the 0-cent margin price I calculate, rather than right at it where hikes usually occur. They are about a dime away today, so by Tuesday we should be back in price-hike territory, and I will fill up. Also, don’t forget that Jan-April is usually a festival of hikes, after prices bottom out in December. We are right on form this year. -EA

Updated: February 24, 2019 — 1:13 pm

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  1. Differing perspective in Chicagoland. Although our hikes have been coming almost weekly, I haven’t seen any increased margins. Just steadily rising cost plus the usual post hike competition to drive prices down & trigger the next hike at expected margin points. This latest hike has stuck much better than others and right now I could see us getting through this week without a hike absent a sharp rise in spot the next couple days.

  2. 2.55 in Kazoo area

  3. Oddest hike I’ve seen here. Not at all predicted by the usual markers. Wholesale is 2c below what triggered a $2.59 hike last week. So they just reupped all the ones that had dropped below $2.49 up to $2.49. Really cut the bottom of this particular price cycle. Always something new….

  4. And then Speedway throws out all precedent with a hike when margins were still good, and 10c lower than last week’s hike here in Chicagoland. On average across all Speedways a whopping 12c or so hike (normal: upwards of 25c). Perhaps a change in strategy going forward with lower highs and higher lows. Or maybe the Speedway price setter was drunk.

  5. 2.459 speedway led NW ohio RT 20 corridor. Lots of 2.25 or less still around this morning so not spreading that quickly

  6. SW Ohio spiking to $2.499 or a nickel higher then the rest of Ohio, of course. Not spreading all too quickly here either.

  7. Anderson/Daleville Indiana Big Reds have the price machine crank up in full gear. 40 cent jump, price is now $2.55 a gallon

  8. South Bend IN – Speedway spiking from $2.25 to $2.55. Same in Niles MI.
    Costco 2.19

  9. Yesterday late afternoon was the Indy spike to $2.559

  10. Chris, MI ranks 40th, or below, in monies spent on roads. Both political parties agree that more funding is needed to fix the decaying roads and bridges. Due to previous commitments of outlays to other area from the General Fund, there are precious few options available although borrowing/selling bonds is one but the payback with interest is something that would have to be looked at. Having said that, the Republicans control both the House and Senate and may be reluctant to go along with the full amount. They begrudgingly granted the previous Governor a 7 cent increase in the tax and he also increased Registration Fees by 20%.
    I won’t even get into the fact that MI drivers pay the most for car insurance in the nation.
    The Governor has indicated that she would offer some “relief” for taxpayers to help offset this anticipated $250+/- annual increase in the cost of gas although specifics are scant. Then there is the amount many drivers pay each year for repair to the suspension/exhaust system/rims & tires due to damage from the roads, said to be above $500-600 (although our family has been fortunate not to have had to pay for those repairs(yet).
    One option might be to remove the 6% sales tax that is now paid on each gallon of gas but that helps contribute to the K-12 Fund so the shortfall would have to be made up somewhere else. Another might be to reinstate all or some of the $2.8 Billion in tax cuts the previous administration gave to business. That would more than pay for the $2B that is needed each year that is needed.
    MI is in the top 10 as far as being a relative tax friendly state so while an increase would result in an immediate sticker shock it could probably be absorbed as drivers become acclimated to it.
    One thing is certain, we can’t wish our way to better infrastructure, as has been the case for the past 40 years.
    WI is going to add 8 cents in taxes to its gas cost and OH is talking about throwing another .18 to the mix. Not sure about IN.

  11. Michigan going to 2.59. After Whitmer gets her way, it will be 3.05.

  12. Jen, if Whitmer “gets her way” it will be because the State House and Senate concur with her. Where else do you suggest the money comes from to pay for the terrible road and crumbling bridges?

  13. If you remember Jeff we already voted down increasing the gas tax a couple of years ago, then they increased it anyway. Where is that money going? What makes you think they’ll manage 3 billion any better? Do we really need the highest gas tax in the country to get our roads fixed?

  14. I remember having the sales tax increasing from .06 to .07 being on the ballot in 2015 but I don’t recall having an opportunity to vote on a gas tax. The State Legislature voted a 3 part increase in the gas tax in 2014 that increased the tax by .04 in 2015 and 2016 and then by .07 in 2017. That was a part of the previous administration’s plan to raise funds for the infrastructure and was the first gas tax increase in 20 years. These are dedicated taxes going to the roads as opposed to the sales tax that is paid on every gallon of gas that is used to largely support K-12, among other things, general fund, revenue sharing, etc., but nothing to the roads.
    Two questions–Do you agree that the roads and bridges in MI need repairing/replacing? And, again, where would you propose the monies come from other than a gas tax dedicated to those uses? That money doesn’t go to the General Fund where it can be siphoned off for other projects.
    I’m not any more anxious to pay more at the pump than anyone else but I just don’t see an alternative considering all the experts agree that $2 Billion a year is the amount needed to do the job.
    A .15 increase in the gas tax would result in a $3 increase in a 20 gallon fill up, about the cost of a Starbucks Machiatto.

  15. I should add that if any part of this increase is finally agreed to that it will probably doom the gas stations that are located along the OH and IN state lines. I imagine they are already losing business to stations in adjoining states now but that size of an increase will certainly exacerbate the problem and I’ll feel bad for them since it is entirely out of their control.

  16. Drove to central OH today to pick up one of our girls we’d left at the stud dog on Monday. Just before Findlay Fuel Mart was at $2.19, Love’s and Pilot at $2.21. 2-3 miles further Speedway was at $2.55 Got off onto US-23 and the Love’s in Upper Sandusky was $2.33 while a couple of miles down the road Speedway was, again, $2.55.

  17. And as the rest of Ohio goes to $2.559, sw Ohio goes to $2.599.

  18. Surprised to see $2.75/2.85 showing up today in Chicagoland

  19. Surprised and not pleased to see $2.75/2.85 showing up. Higher than expected wholesale plus more aggressive margins than recently for Speedway.

  20. Greedway hitting Kalamazoo area with a Monday surprise…2.699

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