Mmmmm, profits!

Comment on the March 17 prediction: There was a hike, but it was to $2.85. Then, on Monday the 25th, to $2.95, which I did not expect. So, score this 1/2 CORRECT, 1/2 WRONG.

Saturday, March 30, 2019, Noon: It has been quite a nasty ride the past two months. At the end of January, you could buy a gallon of gas for less than $2 at certain Michigan stations. Today, we are sniffing $3 a gallon, and the hikes have been coming fast-and-furious. The price of oil has not been a big contributor, up only 10% the past two months. Instead, we have the usual Jan-May move up in gas prices and some “sorry not sorry” refinery problems. The biggest contributor, though, seems to be more aggressive pricing to raise margins. There were hints already in January, and I can see it in the spreadsheet I maintain. Moving into this coming week, although we’ve seen Monday or Tuesdays hikes every week lately, it appears that margins are high enough this weekend to keep the retailers at bay for now. By Thursday, who knows? Even the President is starting to notice. -EA

More Of The Same Expected This Week

Sunday, March 17, 2019, 5PM: Speedway’s aggressive play this year has continued into March, so I am suspecting a price hike is in the mix soon. Since the last price hike last Monday, wholesale prices have rose another four cents, while retail prices have slipped a dime. That would set us up to see a hike to $2.75 this week. Consider that a prediction. -EA

Rather have Whitmer raise prices than Speedway

Tuesday, March 12, 2019, Noon: Big Red’s aggressive defense of margins continues, as we saw a hike to $2.69 yesterday. Over the weekend, there was more chatter about Chicago wholesale prices, but I didn’t they would act this fast on Monday. If something (unlikely) happens with another refinery this week, we could be facing another hike, but I’m not expecting it.

Instead, I’d like to discuss Gov. Whitmer’s gas tax hike proposal. Here’s the issue — due to our freeze/thaw climate, our roads take a bigger beating than roads in, say, Texas. For other Big Ten states like Wisconsin, is it the same? Or is it worse in Michigan due to being surrounded by several Great Lakes? If it is worse, then we would have to spend more per mile than other states to maintain our roads.

Four year ago, I wrote a long posting on my blog comparing spending on Michigan roads with other Big Ten states. We were in the middle of the pack, and we weren’t getting our fair share of Federal dollars for roads, either. Maryland is at the top of the list, and I was there recently. They have good roads. I suspect things haven’t changed, and if that is the case, then we do need to raise the gas tax or find some other ways to properly maintain our roads. So, what is the best gas tax per gallon to do that? -EA

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

Too Cold To Hike Prices? No.

Comment on Monday’s prediction: Kind of hard to raise prices in the Midwest, when no one is driving and buying gas. But tomorrow is Friday …

Thursday, January 31, 2019, 7PM: I’ve been watching oil prices rally all week, and then Midwestern wholesale gas prices, now Valero stock has gotten into the act, up a lot this week. Meanwhile, prices have dipped below $2 in a number of places, well below the 0-cent margin price. I recommend filling up Friday morning, predicting a price hike on Friday or Saturday (or best case Monday), in the neighborhood of $2.39. -EA

Blizzard Will Keep Prices Stable

Comment on the December 29 posting and most of January: We had hikes in Michigan on January 2, 9, and 22, each one a bit higher than before. So, the posting was basically CORRECT.

Monday, January 28, 2019, 11AM: A very snowy Monday in West Michigan, and I have a chance to get caught up on my Gas Game analysis after a brief hiatus. Since the first of the year, energy prices have rallied, following the stock market, and I expect these two will continue in tandem. This morning, for instance, both stocks and oil are down. My estimate of the 0-cent margin price this morning is $2.05, and in most places we are well above that, which suggests retail prices will continue to fall slowly. However, we have a gas war on W River Drive in Comstock Park. $1.86?! I’m going to consider that a weird outlier and stick with a prediction of no hike this week, except maybe in Comstock Park. -EA

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