Monday, June 7, 2004

As they say at Wal-Mart, “Watch for falling prices”. Wholesale prices went on a dive last week, so retail prices should follow. Using today’s wholesale price, I calculate that the 0-cent margin price is $1.77, so that’s the floor right now for how low prices can go. However, I imagine the retailers are sitting with some expensive gas in their tanks, and they will be in no hurry to cut prices. There are places in town where the price is still $2.18! Nevertheless, watch for big price drops at your favorite stations as the week goes on. Regarding the correctness of the prediction, it depends on how you define “big”. Prices are dropping, but not with much velocity in some places.