Friday, July 16, 2010, 2:00 PM: As many of you know, I live in Ada and I work in Allendale. With I-196 closed, I’ve been driving on I-96 to Marne, and then south, so I have been spending a lot less time driving through Standale, where I keep track of prices. I’ve been using Speedway’s website and GasBuddy instead. As noted on Monday, I was surprised that the lowest prices in the area were in Standale last weekend. Standale has been the tourist trap of gas prices the past year. I drove through there yesterday and found out the reason for the lower prices: Citgo is open again! If there is any doubt, let this be more proof that the only way to keep gas prices down is to have stations like Citgo, Admiral, and independents who are willing to compete with the big boys. Yesterday afternoon, Citgo was already at $2.79.

Friday, June 18, 2010, 12:45PM: Wholesale prices have been on an uptrend since May 25, which are inflating retail prices. Short term, there’s nothing to predict — should be a quiet weekend with no gas price wars, and a hike next week will depend on how the stock and commodity markets do on Monday and Tuesday. Looking ahead to the rest of the summer, we typically get high prices for the year in August, but I don’t have a strong opinion about whether 2010 will hold that pattern or not.

Now, the next question. Is being in a Speedway state a good thing? You do get roller coaster rides of prices, with big 20-30 cent spikes followed by prices falling 2-3 cents a day otherwise. But on average, how good are our gas prices. Hey, I’ve got numbers, let’s see where they fall:

Spreadsheet of tax adjusted Speedway state averages, minus the national average from GasBuddy.

Simply put, almost every state Speedway is in has a lower average than the national average. In states where Speedway dominates it’s even lower. Indiana, Michigan and Ohio are 11.1, 9.9 and 9.2 cents below the national average (tax adjusted) this year. Minnesota’s SuperAmericas (which will soon be sold, along with the Marathon infrastructure there) are 7.1 cents below the national average, and Wisconsin and West Virginia are also below. Only Illinois and Kentucky are above the national average.

So the big question is, what do you want? Gas prices that are on average below the national average and volatile prices? Or prices that are steady, but higher? I’ll don’t like Speedway’s way of doing business, but I’ll take lower prices every day of the week.

It will be interesting to see what Minnesota’s prices will do when Speedway is gone. The guy that gave me the idea to start the Spike Line has a similar thing he does, and he might not have to do that anymore.

Wednesday, April 21, 2010, 1:00 PM: Since the last price hike, wholesale and retail prices have been pretty stable, so there hasn’t been much to comment on. We still have some $2.95′s in town from the April 6 hike, and in Lowell, prices are down $2.76. Price hikes in 2010 have re-set to prices below my 20-cent margin calculation, which tells me that the retailers, particularly Big Red, are doing all they can to keep prices under $3 a gallon. Looking ahead the next several days, there’s nothing obvious to predict. If we get a re-set, it will be in the $2.95-$2.99 range I believe, but I don’t know if we will get one. — Ed Aboufadel

Friday, March 26, 2010, 4:00 PM: Since the last price hike a week and a half ago, wholesale prices have been drifting lower, while retail prices have held relatively firm in the $2.80′s, except for the gas price war in Allendale, where prices are in the low $2.60′s. I expect some price drops around town over the weekend and into next week, and then the crystal ball gets foggy. It might depend on the stock market. One more run towards Dow 11,000, and I think we’ll see another shot at $2.99 a gallon. If not, I’m not so sure. The low risk choice is to fill up the next time you are in Allendale. — Ed Aboufadel

Thursday, February 25, 2010, 12:45PM: I have been terribly busy the past two weeks, including a long weekend in San Diego for a conference. Thanks, Bill, for the great warnings you’ve been sending out.

We’ve had two price hikes to deal with in the past week, bringing us up to $2.69. What is next for gas prices? As I posted on February 8, historically we’ve seen prices rise in February and March, and this month has been no different. NYMEX futures for April, which are closely correlated to March retail prices, have been running a dime ahead of the March futures, and that suggests that price hikes will continue over the next few weeks. That’s not a prediction about the next few days, but I’m going to be on “expect a hike” alert the next five weeks.

As for the $4 gas by the summer, I don’t doubt it.  but I also hope cooler heads prevail, for the economy’s sake.

Tuesday, December 29, 2009, 1:45PM: Well, we got a price hike to $2.69 late yesterday, due to rising wholesale prices the past two weeks. It probably goes hand-in-hand with the stock market hitting highs for the year this week, as energy and stock prices have been in sync for quite a while. This is rather disturbing, though, since retail gas prices tend to bottom out in December, and then climb from January through April. So, does that mean we are heading for $3 gas this winter? I don’t know. But stay tuned for further postings on this site. Happy New Year to all our readers! — Ed Aboufadel

They come right out of the gate letting us know Speedway’s secret: Real estate.

“We wanted to know how Speedway is able to change its prices market-wide without fear of what the station across the street is going to do. What we discovered is that in most cases, there is no station across the street.”

They used Google Maps and Street View to confirm that 63 out of 92 had no direct competition. This is how they are able to raise prices and not worry about the competition. I had never thought of this before. I started mapping Indianapolis Speedways, and sure enough, 30 of the 52 stations there have no direct competition.

I thought about this revelation a little further, and it really isn’t a Speedway thing. I found about the same ratio of other branded stations have stand alone stations compared to ones having competition. And then, it is also rare to see a Wal*Mart next to a Meijer, or Target; and a Lowes next to a Home Depot. Seems Speedway’s secret isn’t much of a secret at all. Not to mention they don’t do anything to prove this is why Speedway raises prices the way they do.

Then there is the outright falsehood.

“The vast majority of Speedway locations jumped to $2.65 with no corresponding spike in oil prices. Oil futures did go up 3.2 percent the day before, but gas prices in Cincinnati shot up by nearly four times that amount. And oil prices were actually falling while our gas prices were rising that Tuesday.”

The article and story was run on the 25th, but the spike up in prices happened on the 17th. Oil went up on the 17th, not down. Also, oil does not set the price of gas in this area (the PADD II). That would be the Chicago Mercantile trading of the Chicago Spot.

An analysis of the Chicago Spot from November 9th to the 17th shows that while it rose from $1.8218 to $1.9224, the average price of gas fell, almost 11 cents in Indiana, 9 cents in Michigan and 13 cents in Ohio. The Speedway spike caused averages in those three areas to go up 17 cents in Indiana, 11 cents in Michigan (with higher UP prices included), and 22 cents in Ohio.

They were far from jumping up with no correlating spike. They did not even meet the difference in each area. A 10 cent rise added to how the average fell in each area shows Speedway undercut Indiana by 4 cents, Michigan 8 cents and 1 cent in Ohio.

The rest is stuff we here at TheGasGame have been preaching a long time, long before even I came along. Speedway is the leader, selling 1 of every 5 gallons of gas. They have more corporate stations that any other. After Speedway rises, others follow, a statement that flies in the face of the earlier revelation that Speedway stations have no local competition.

If you haven’t visited the “Speedway Effect” article here at TheGasGame, I suggest you do so. You’ll learn far more accurate information than you did with this article. Also, if you have followed me at my Fair Price threads in the GasBuddy forums in Indianapolis, Indiana and Michigan, you can see I have discovered the pattern, and can pretty accurately predict when a spike will happen.

My new feature here at TheGasGame continues that. It’s called “The Spike Line”. It is a new name for what I have been doing all along in the “Fair Price” threads. It’s just a more accurate title. When the Spike Line is crossed, you can expect a spike up in prices from Speedway, it’s that simple. If there are other circumstances to cause or prevent a spike I’ll let you know that there as well. It’s just another way that TheGasGame is helping you save money. It’s one of the big reason’s I am proud to be a part of it.

Sunday, October 25, 2009, 8:30PM: Readers of this blog know that I have been making the case the past few years of correlations between the stock market and the price of gas. Adding to this argument is that the Dow has gone from 6500 in March to 10000 this month, while a gallon of gas has climbed from $2.08 in March to $2.75 this weekend. (A barrel of oil has gone from $50 to $80 since March.) From what I’ve read, government and quasi-government offices such as the Treasury and the Federal Reserve have been pumping dollars into our economy since March to prevent this Great Recession from turning into a New Depression. The dollars are supposed to credit going again, for small businesses, large businesses, and consumers, but that isn’t happening very much. Instead, the dollars are finding their way to the stock, bond, and commodity markets, leading to a rousing rally in stocks, and higher gas prices. So, the economy continues to struggle, unemployment is high, but gas prices are rising despite sluggish demand. To put it mildly, this is not good at all.

The best we can do is figure out what is going to happen to gas prices this week, and maybe save you a few dollars. Although we hiked to $2.75 on Tuesday, wholesale prices continued to rise the rest of the week, and I estimate the 0-cent margin price to be about $2.59 or so, and the 20-cent margin price is $2.84. So, we have the potential for another 10-cent hike on Monday or Tuesday, but it is hard to be certain right now. So, keep your eyes on the price signs or the Internet, and be prepared if a station raises prices soon, so you can find one that hasn’t yet. In Standale, the Marathon is usually the last the raise its price. — Ed Aboufadel.