Comment on the May 14 prediction: They did a reset on the 15th, but up to $3.69. Then, they did it again yesterday. So, CORRECT on the first hike, but WRONG on the price and I didn’t even see the second hike coming.
Wednesday, May 24, 2023, 3:00 PM: Every year or two, we see the retailers get more aggressive with gas prices, and the latest chapter of that adventure is here. Instead of jumping from the 0-cent margin price that I calculate, lately, it has been more about going from a 20-cent margin price to a 40-cent one. And who is to blame? Since Big Red was sold to 7-Eleven, they have been rather passive in the market, but maybe that is changing. We were blaming Big M a few months ago, but I don’t see them leading the hikes. Of course, K&G is not to blame, at least for now.
Whoever it is, we see everyone following suit, which is disappointing. But, when they reach for those higher margins, competition kicks in — they want you to stop by, get gas, and buy a pop — and some of the retailers cannot resist the temptation to price gasoline a few cents lower. I am already seeing that while driving around greater Grand Rapids, despite yesterday’s hike.
If history repeats itself, they’ll lose interest in these aggressive hikes sooner or later, particularly as the competition stops playing along. For now, though, we’re stuck with relatively high prices for a Memorial Day weekend of driving. -EA