Sunday, January 22, 2023, 9 AM: Trying to provide a comment about the previous prediction is the topic of this post. We did get a hike, to $3.45, so filling up for $3.12 made a lot of sense. But how we get there reflects some challenges, and opportunities, with the current approach to The Gas Game.
I heard from a regular reader of this site recently, who wondered if Speedway had changed its behavior when it comes to gas prices, at least here in Michigan. I have been wondering the same thing, as they haven’t been as aggressive about price hikes for quite a while now, going back to the merger with 7-Eleven. For the past two hikes, we’ve been seeing the following: (1) prices drop into the 0-cent margin zone; (2) *Marathon* stations in west Michigan attempt to initiate a hike by moving their prices up 25 cents or so; (3) in places like Lowell, nearby competitors also hike prices, but in other places (e.g. Standale) there is a collective shrug; (4) one or two days go by with some Marathons reverting to the old price; (5) then there is a silent whistle and nearly everyone adopts the new, hiked price. Step #5 happened yesterday here in west Michigan, and now most stations are at $3.45 a gallon.
Now, remember that the Marathon corporation used to own Speedway, until 2021. So maybe it is fair to say that the Marathon folks used to use Speedway to nudge prices around, and now are using their own name-branded stations. Interesting, though, that competing stations haven’t been excited to follow the leader lately.
The opportunity for drivers? Keep an eye on Marathon. If some of their stations are in Step #2 above, you have some time to fill up at that old price, maybe a day or two.
We’ll see how long this Gas Game tactic lasts. -EA