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  1. The scary part about your predictions is that it is almost as if the people who set the prices watch your site. When they see a price on the site they change it to that price the next day. So you say look out for 3.89 gas? Guess what we will see tomorrow. Really, I wonder if the predictions are more one of those self fulfilling prophecies. Time to buy that Yaris, eh?

  2. It’s not going to happen unless we get a 15-20 cent increase in wholesale costs. I don’t see that happening very soon.

  3. Temna, it really doesn’t work that way.

    Patrick and Ed are just trying to estimate what the current retail margins are. Which they can guess pretty close because the prices on the future’s market (http://www.bloomberg.com/markets/commodities/energyprices.html) are normally close to what are rack (wholesale) prices are. For example right now the market is at $3.02 and our rack prices for today are around $2.97. Then you add the 18.4 cents federal road tax, sales tax (19.9 cents at $3.699), 19 cents for the State road tax, freight (we use 2.6 cents for an average), 1.133 cents total from some other small fees, and subtract 5.1 cents for the E-10 tax credit. Which puts our costs at around $3.53.

    That isn’t the same formula as they use, but they will still be close enough to see when margins get low. Our cost on Monday was about $3.46 and most of the state was below that. Whenever margins get low like that, Speedway will make a statewide move. They almost always restore to a 20 cent margin.

    As long as the market is close to the actual rack prices, it makes it pretty easy for them to see when we need to go up and what we need to go to. The goal is to average a 15 cent markup for the month.

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