Tuesday, August 16, 2005

If you saw me on WZZM-13 last night, you heard that I said that yesterday’s price hike to $2.79 was unsustainable. Let me explain: I use an Internet site to estimate the wholesale price of gasoline. Then I add in taxes and a few other things, and finally I add in my estimate of the margin retailers are trying to earn on each gallon of gas sold. For the past four years, when there has been a price hike, it is to re-set the margin at 20 cents. As the 20-cent margin price on Monday was about $2.69, a hike to $2.79 seemed a bit excessive. Already this morning, a few places in town are back to $2.69, and at the Speedway I monitor in Fort Wayne, Indiana (using the Internet), they took 10 cents off of the price this morning. It helps that wholesale prices went down yesterday, too. So, expect falling prices today and tomorrow, and I don’t know yet about Thursday and Friday. We’ve made it to the end of Wednesday with no new price hike, and prices falling slowly but surely around time, so the preciction was CORRECT.