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Author Topic: Sudden Unexplained Price Hikes Back to Topics
solarmeter

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Detroit

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Message Posted: Jan 7, 2013 8:24:27 PM

If you agree with my position on this issue in MI (or OH IN IL) please help me stop it. Link to protest is here: /AboutUs/Pages/Contact-Us.aspx

Message............................................................

Today Speedway (again) jacked up price for no reason. I sent them the following on this email link:
/AboutUs/Pages/Contact-Us.aspx

For over a year now... all Speedway stations in my area (and elsewhere in the upper midwest) have been weekly or bi-weekly spiking the price/gallon up by 25-30 cents for no reason other than temporary greed... meaning when the wholesale price of gas is remaining stable.

Normally all other stations then follow Speedway lead... similar to price fixing. But no longer automatic... thanks to my local crusade starting with BP station owners! Now they are NOT automatically raising prices... and are taking lots of business away from Speedway.

Your no-reason hike today from $3.16 to $3.39 will not be copied by the stations I have talked with. Next I plan on expanding my crusade beyond BP to other brands... and eventually beyond my local area. I have vowed to STOP your selfish jacking up prices when no increase in wholesale costs warrant such. I will win this... slowly but surely... mark my words.

Such weekly or by-weekly price jack-ups do NOT occur in states below Ohio and Indiana... meaning there is something horribly wrong with your upper midwest distribution pricing scheme. This must stop... sooner rather than later!

End message ...........................................

Better yet... get to know your local (non Speedway) station OWNERS and convince them to say NO when the call comes in to raise prices to match the invalid Speedway increase (unless of course some event causes RBOB wholesale gas price on CNBC to spike).

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solarmeter
Rookie Author Detroit

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Message Posted: Jan 21, 2013 7:14:13 PM

What goes around comes around. Back to business as usual today... supprise Speedway hike from $3.15 to $3.29.

The BP stores meanwhile were edging back toward normal... having over-did their own supprise hike a few days ago... reducing 2 cents 3 days in a row back to $3.23.

CAT vs MOUSE... over and over again. Why can't they behave like in non-speedway states where there are no big supprise hikes... simply minor increases/decreases that smoothly follow wholesale costs? ? ?

It sucks to be in upper midwest states.
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solarmeter
Rookie Author Detroit

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Message Posted: Jan 18, 2013 9:07:46 PM

Veddy Interesting. The game has changed. The game is still on... but different now:

I became a Speedway customer today... first time in a long time.

After Speedway stayed at $3.10 locally here in MI for almost 2 weeks.... the BP stations couldn’t take it any more and jacked up to $3.29 cash or $3.39 credit.

Most other stores followed in lock-step. But our neighborhood Speedway (48045 zip) went to only $3.15 cash or credit. So I filled up there.

Maybe the terror attack on a BP facility in north Africa did this. Who knows. But first time in memory BP actually STARTED the price hike.

[Edited by: solarmeter at 1/18/2013 9:14:16 PM EST]
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solarmeter
Rookie Author Detroit

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Message Posted: Jan 9, 2013 12:20:19 PM

Well golly gee... I'll be gosh darned: It WORKED!

Apparently the Speedway near me is reading this thread! They did indeed go right back to $3.13 sometime yesterday... only 1.5 days after trying to get all other stations to copy-cat their spike to $3.39 !!!

That is a FIRST around here. Never before happened. Now the close-by stations are confused. BP inched up to $3.19 even though they "promised" not to. Speedy Q matched the $3.13. Sunoco and Citgo at $3.17. I posted all their prices on GasBuddy just now.

In any event... my "rant" (campaign)to stop the whole crowd from doing their typical copy of Speedway $3.39 spike has worked... this time anyway.

For poster "Gas Buddy" who said: "Sorry, maybe I'm missing the obvious but if Speedway is almost always higher priced than other stations you can go to, and you have a lot of other stations to buy from, then what's the problem? Why worry about a gas station you don't have to go to?"

You are in MD... is that a "non-speedway" state? If so... you are not experiencing what's been going on around here every 1.5 weeks or so for the last couple years. Ambush pricing: Out of the clear blue Speedway jumps up 25-30 cents causing everyone else to follow... usually within an hour or two. Then they all gradually fall back to "normal" with Speedway lagging not leading the reduction.

So it is NOT a matter of worrying about a gas station I don't have to go to. It is simply a matter of getting caught on empty by the supprise ambush pricing precipitated by the same brand every time... and missing the 1-2 hour window to fill up at a different store.

Today is a rare exception... the only one in history I think... where the typical pricing trap failed! Good.

[Edited by: solarmeter at 1/9/2013 12:23:03 PM EST]
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Gas_Buddy
Champion Author Maryland

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Message Posted: Jan 9, 2013 9:52:42 AM

I'm probably missing something, but first, "... the defenders of gas pricing have
been called out."

Just because people understand what the stations or the industry or the investors (speculators, if you will() are doing or why they're doing what they're doing doesn't mean anyone is defending what they're doing, or defending gas pricing, or defending gas prices. Understanding and/or posting an explanation doesn't mean defending.

Second, even if other gas stations (I'll use the word "unnecessarily") raise prices to match Speedway's price, if they don't have to - meaning that they're increasing their traditional mark-up over wholesale - doesn't that discourage business? If all the prices are similar, drivers would be splitting their buying among all the stations. Why would they not keep their prices lower (if they can) and take business away from Speedway? Wouldn't it make sense to keep the prices as low as possible in order to take business away from another business/from another gas station and encourage drivers (by having lower prices) to a station other than Speedway?

Sorry, maybe I'm missing the obvious but if Speedway is almost always higher priced than other stations you can go to, and you have a lot of other stations to buy from, then what's the problem? Why worry about a gas station you don't have to go to?
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bluenvoy
Champion Author Nashville

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Message Posted: Jan 9, 2013 9:40:44 AM

Oil is inching up.
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Dennis783
Champion Author Des Moines

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Message Posted: Jan 9, 2013 8:01:33 AM

Prices have been artificially high for several years
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maxstar
Champion Author Chicago

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Message Posted: Jan 8, 2013 11:49:13 PM

Again solarmeter: Is there a reason that you would expect any business to explain why they price things the way they do? Can you give some examples of other businesses that do?

And again, I do not see any evidence of antitrust or gouging. Simply not agreeing with a price is not enough.

As listed on the price map, the BP closest to the Speedway on Jefferson and Crocker has a current price of $3.39 a gallon for regular while Speedway is at $3.13. Despite the fluctuations you cite Speedway seems have pricing that is competitive with other stations in the area. And if you do not care for the pricing it looks like there are plenty of other places to go for gasoline.

Jefferson and Crocker



[Edited by: maxstar at 1/8/2013 11:52:04 PM EST]
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AFOS
Champion Author Chicago

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Message Posted: Jan 8, 2013 10:46:03 PM

(if you stretch the time frame longer the graph looks more like icicles because the vertical scale has to cover more territory). Nothing has changed in the way the graphs are presented.
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AFOS
Champion Author Chicago

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Message Posted: Jan 8, 2013 10:37:07 PM

solarmeter wrote:
"NOW do ya'll grasp what Speedway distribution is doing in our market? Constant undulations... no valid reason. The non-speedway states would be staying at $3.13 ± a cent or two due to normal dealer competition at any particular intersection or freeway exit."

I will be the first to admit I cannot prove the following because I don't follow pricing in other markets: But I strongly suspect that rather than staying at $3.13, the lowest price in the Speedway sequence you noted, they would be staying somewhere in the $3.20s if they faced the same wholesale costs.

Almost inevitably at the time Speedway hikes (in this case the price at your station was $3.12/3.13) , their margins (averaged across a market), after credit card fees are near zero and at a level no dealer could live with week after week after week. Often the cheapest Speedways before a hike are losing money while others are making a little. Not an option for the single station operator to offset one stations losses with another's profits.Of course if your BP guy just sits at $3.13 forever, I guess I'm wrong.

[Edited by: AFOS at 1/8/2013 10:40:14 PM EST]
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solarmeter
Rookie Author Detroit

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Message Posted: Jan 8, 2013 9:03:30 PM

"the ramblings of a loon who has no facts?"

I was gonna post the facts (just the facts m'aam) in the form of 1-month graphs proving what I said. But no-luck: The Gas Price Charts link on this site has changed... no longer showing the actual icicle spikes. Instead they now use linear regression to show a much smoother graph in our crazy upper midwest zip codes.

Hopefully the longer-time members here will remember (and validate) what I mean regarding how the graphs used to look.

Try imagining your own graph... assuming wholesale gas costs remain fairly constant for a 2 week period... showing this data for YOUR zip code:

Day 01: $3.13
Day 02: $3.13
Day 03: $3.12
Day 04: $3.39 !
Day 05: $3.37
Day 06: $3.34
Day 07: $3.29
Day 08: $3.25
Day 09: $3.19
Day 10: $3.16
Day 11: $3.13
Day 12: $3.13
Day 14: $3.39 !

Repeat - repeat - repeat - repeat....

NOW do ya'll grasp what Speedway distribution is doing in our market? Constant undulations... no valid reason. The non-speedway states would be staying at $3.13 ± a cent or two due to normal dealer competition at any particular intersection or freeway exit.

Our midwest states need to STOP this balogna... one way or another. Talking to your neighborhood non-speedway stations CAN work. I have proven that this week (so far). And helping them by posting their non-exploitive prices on this site will give them more business... hopefully.

Just an hour ago some lady posted our local 48045 Speedway at Jefferson and Crocker went back down to $3.13. If true... wonderful - because that is the exact station initiating the hike to $3.39 out of the blue yesterday. But I suspect she might be a ploy. Too lazy to drive down and check right now. My BP buddies nearby (different zip) are still hanging in at the low price. Cool.

Ghost busters (er price busters) is us!

[Edited by: solarmeter at 1/8/2013 9:11:42 PM EST]
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solarmeter
Rookie Author Detroit

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Message Posted: Jan 8, 2013 6:54:22 PM

Aha... the defenders of gas pricing have been called out.

For 1OILMAN: You know not what this right here thread is about. Start at the bottom and read backwards (up). It is NOT about station owners margins... as horrible as we all know they are.

You live in AL... which I drive through twice a year on the way to Destin, FL. You do NOT have what's going on here in MI. You have near-steady pricing week to week... influenced only by appropriate wholesale gas costs. You are in a "non-Speedway" smooth-curve state.... the way all states should be. You (also) are missing the point of this "rant".

For Maxstar: Being in Chicago you know (or should know) exactly what this is about. Read AFOS's posts... again from bottom up. Then you will understand better.

[Edited by: solarmeter at 1/8/2013 6:57:48 PM EST]
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maxstar
Champion Author Chicago

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Message Posted: Jan 8, 2013 6:08:07 PM

solarmeter (aka grampa?): Is there a reason that you would expect any business to explain why they price things the way they do? Can you give some examples of other businesses that do?

I do not see any evidence of antitrust or gouging. Simply not agreeing with a price is not enough.
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1OILMAN
Champion Author Alabama

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Message Posted: Jan 8, 2013 5:56:33 PM

Solar: Sounds like you need to buy a station. You make SO much money you could retire in a year. There are NO expenses; people work for free, the utilities are free, the insurance is free. And all that merchandise is placed in your store at no cost. It is all pure profit!!
For those reasons and many more, do you really think they care about the ramblings of a loon who has no facts?
I didn't think so.
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solarmeter
Rookie Author Detroit

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Message Posted: Jan 8, 2013 4:29:39 PM

Well gosh-darn (grampa lingo)... 24 hours after Speedway (and of course Marathon) went way up... all the BP's - and even several more brands - are hanging right in there at $3.13 not budging a penny. Congrats to their "antitrust" attitudes!

My baby campaign is working. I bet Speedway will come right back down tomorrow haha.... their gouging attempt having FAILED this time.

Not sure about the stations (further away) that were in the $3.07 to $3.09 range. I'll check a larger zip code and see.

Dear "Gas Buddy"... the Speedway hikes are temporary... once a week to once every two weeks. Historically ALL the other stations copy cat right up only to keep droping back to "normal" 4-6 days later. It's like Speedway wants to "forever" keep prices 25-30 cents above where they "should be"... but cannot.

[Edited by: solarmeter at 1/8/2013 4:37:10 PM EST]
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Gas_Buddy
Champion Author Maryland

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Message Posted: Jan 8, 2013 4:07:02 PM

Maybe I'm naive in not understanding the rant in the original post but if Speedway is only going up in price a quarter a week, it's going up a dollar or more every month. Doesn't Speedway ever not go up weekly or ever reduce it's prices. Because in three months, that's a three dollar or more increase. And that doesn't seem to be the case.

Second, and again maybe I'm naive, if you've already confirmed that no other gas stations intend to go up in price (i.e., follow Speedway's price increase lead), then what's the problem? Its a if you're saying you can buy a new car at the suggested retail price or you can buy it from a dealer who'll sell it "for $25 above invoice." Why would you pay full price for the car if you know you can get it for less next door? Why would you even worry about Speedway gas prices if you have significantly lower priced choices without going out of your way?

In other words, while you may disagree with Speedway's pricing business plan, you don't have to buy from Speedway. Do you? Or are you indicating in one way or another that you're being forced to buy gas from Speedway, regardless of cost?

Sorry, but I don't agree with your position on the issue, and I would hope that you would be posting gas prices, regardless of whether the prices are high or low, so that your fellow Detroit Gas Buddy members can be more knowledgeable when shopping for fuel.
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AFOS
Champion Author Chicago

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Message Posted: Jan 8, 2013 3:25:43 PM

solarmeter...
Right now spot prices in Chicago (wholesale movement tracks this pretty closely but tends to be higher in value) are 34¢ BELOW NYMEX RBOB futures. That's not unusual in the dead of winter. In another 6-8 weeks they are likely to be well ABOVE NYMEX RBOB and retail pump prices will follow. Late last summer at one time they were 60¢ over NYMEX RBOB and the Midwest had the nation's highest prices.

I think you're a little low on the wholesale at $2.45. Nearest terminals to you are Chicago & Milwaukee and while they are in a special formula area, the more generic is only running 3-4¢ less at this time so wholesale for your area is probably nearer $2.50. That of course includes no taxes, no delivery fee and perhaps other small fees.
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BUSSY
Champion Author Dallas

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Message Posted: Jan 8, 2013 2:21:05 PM

no speedway here
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solarmeter
Rookie Author Detroit

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Message Posted: Jan 8, 2013 1:20:18 PM

"I just follow the average contract wholesale prices posted daily here "

Wow... a link to wholesale gas prices! Thanks. I didn't even know a hot link would post here. When I tried to paste the "contact speedway" link in original post it deleted the beginning http... and took away the hot blue.

Anyway.... the UNL-87 averages about $2.49 today. Maybe it was less Monday before Speedway's big hike. But certainly not 25 cents less!

FYI... RBOB is up 1 cent to $2.79 right now... but it has been within a couple cents of that for quite a while lately. Much more than $2.49. Wonder why? Midwest prices (smoothing out the weekly spikes) are near the national average. So why is our wholesale so much lower than RBOB? I guess we are lucky for the time being... or else RBOB includes some hidden NYC tax that comes off when shipped out of state?

[Edited by: solarmeter at 1/8/2013 1:22:56 PM EST]
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AFOS
Champion Author Chicago

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Message Posted: Jan 8, 2013 1:01:36 PM

dangasman...
So if your cost didn't change why did pump prices drop from $3.39 to $3.07? Were you making money at $3.07?

giwan...
Wish I knew why prices are so volatile. Apparently per dangasman, this is not true for all dealers. Depending on how their agreement is structured I suppose.

I just follow the average contract wholesale prices posted daily here

[Edited by: AFOS at 1/8/2013 1:04:13 PM EST]
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giwan
Champion Author Michigan

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Message Posted: Jan 8, 2013 12:57:51 PM

Why are wholesale prices so volatile in the midwest?
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dangasman
Champion Author Michigan

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Message Posted: Jan 8, 2013 12:42:05 PM

well maybee the gas price went down at the station, butt there cost didnt go down!last week prices were 3.39. then 3.29, then 3.19 , then 3.09, then 3.07.. why? my cost stayed the same that week. then out of noware, jump to 3.39 where they were in the beginning?
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AFOS
Champion Author Chicago

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Message Posted: Jan 8, 2013 12:30:30 PM

solarmeter...
I don't take much issue with your last post except the statement about wholesale costs being within a penny or two for several weeks. Wholesale in midwestern terminals is quite volatile and last week for example a 10 cent rise was followed by a 10 cent drop the next day. This might or not be true in other areas around the country but I don't follow them. Been true around here for several years.

That being said...I've seen Speedway's reaction to a big jump be delayed so that they actually hiked prices on a day wholesale declined.
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NickoliMB
Champion Author Manitoba

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Message Posted: Jan 8, 2013 11:31:40 AM

Part of the games they play. In Manitoba right now in Swan River prices should be 10 cents a liter cheaper but all the stations are making a killing. One station drops and within an hour the other four drop. Its monkey see monkey do!!!
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solarmeter
Rookie Author Detroit

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Message Posted: Jan 8, 2013 10:32:19 AM

"Don't go to Speedway"

"Any retailer selling any product can charge whatever price they choose to. If they are wrong they will not be in business long. If they are right they will get through the winter and have more capital backing them up in a hard economic downturn."

You are both missing the point. I am as much of a free market / free choice person as you are. The point was (is) that wheras in your states (MA and ME?) the charts showing gas prices over a month or year are probably smooth curves with gradual rise and falls... like in the southern states.

But the graphs here in upper midwest states look like upside-down icicles hanging from a crooked eve trough.... spikes up and slower falls week after week after week... when wholesale price (cost) is relatively smooth... within a penny or two over several weeks timeframe.

THAT is my beef with Speedway... which always STARTS this crap - and expects all other brand dealers to follow. A few years ago it was always on Thursdays to catch weekend travelers. Now it is random... happening as early as Monday yesterday.

Kinda like if you want to buy a cup of 99-cent coffee (similar price everywhere) only to find the place you normally go raised price that day to $1.35. So you stop at 2 more places and discover they just copied the same $1.35. Meanwhile wholesale coffee cost had not changed. If that's not price fixing then tell me what is!
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djp071158
Champion Author Detroit

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Message Posted: Jan 8, 2013 5:34:01 AM

And gas ALWAYS goes up faster than it comes down. If "something" happens, it will jump 20-25 cents overnight. It NEVER comes down that fast.
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MertieMan
Champion Author Lexington

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Message Posted: Jan 8, 2013 5:22:55 AM

In this area Speedway is owned by Marathon Oil which owns the terminal here. They control all prices for this area.
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MIT05
Champion Author Massachusetts

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Message Posted: Jan 8, 2013 4:52:58 AM

Don't go to speedway.
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EvPv
Champion Author Maine

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Message Posted: Jan 7, 2013 10:24:31 PM

Any retailer selling any product can charge whatever price they choose too. If they are wrong they will not be in business long. If they are right they will get through the winter and have more capital backing them up in a hard economic downturn.
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AFOS
Champion Author Chicago

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Message Posted: Jan 7, 2013 10:09:27 PM

"PS: How do you make most recent post show last instead of first?"

You don't. It's hardwired the other way around.
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solarmeter
Rookie Author Detroit

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Message Posted: Jan 7, 2013 10:03:18 PM

AFOS.... thanks for the additional insight. I still hate these "speedway states" games however.

Will start posting some prices as you suggest... not when all stations are quite similar... but on days when these aberrations occur. So far my BP "friends" are holding steady at the low prices. So are a few other hold-outs.

But as you've observed in Chicago.... they will all begin creeping up toward Speedway. Then in 3-4 days begin reducing back toward normal with Speedway reluctantly following. What a goofy way to run a business.

PS: How do you make most recent post show last instead of first?
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d_clark
Champion Author Grand Rapids

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Message Posted: Jan 7, 2013 9:34:50 PM

All the stations in my area next to a speedway raised prices along with Speedway.
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AFOS
Champion Author Chicago

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Message Posted: Jan 7, 2013 9:34:19 PM

Solarmeter...
Speedway is the increasingly rare case of vertical integration in the oil industry - a company that pumps oil and refines gasoline also still being in retailing. Most of the majors have exited because retail operations drag down their profits. So, since Speedway is still at it, their average margins probably are higher than those in many other markets but that doesn't mean you can't beat the system if you study it...

I can't prove it, but I probably pay less on average per gallon than if I lived in a "smooth price graph (ie non-Speedway) market". I follow wholesale prices at Chicago area terminals and have a pretty good idea when they are at bottom and that's when I fill up. I knew last night there was better than a 90% chance Speedway would go up here today and was not disappointed. Haven't been caught by a surprise price hike more than a handful of times in the last 5 years - and even then there's a time lag before others follow Speedway. This works for me because I don't normally have to fill oftener than once a week, and many times less than that.

We do have stations near me that almost never match Speedway's full hike and often significantly under cut it, as well as waiting a day or two to do anything (Delta Sonic for one).

You would do those BP (and any other) dealers who agree not to match Speedway a favor by posting their price on gasbuddy and you would also do your fellow gasbuddies a favor to let them know where lower prices are available.
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solarmeter
Rookie Author Detroit

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Message Posted: Jan 7, 2013 9:20:00 PM

Thanks for that... BUT it still seems like some kinda black helicopter conspiracy. Humor me and check the gasbuddy history graph of prices in my zip 48045 ... and then check any zip code in TN or TX or AL or FL etc.

The MI (or OH or IN or IL) graphs are jagged... with these no-reason (imo) ups and downs all the time... regardless of wholesale cost. The other states are smooth graphs with none of this nonsense.

My goal is to stop this insane flux... especially because the rises like to occur when my tanks are near empty lol.

Yes... I know what RBOB represents. Nontheless... assuming no local pipeline or refinery has an issue... or average gas prices tend to equal RBOB plus MI tax plus delivery cost plus margin.



[Edited by: solarmeter at 1/7/2013 9:25:53 PM EST]
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AFOS
Champion Author Chicago

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Message Posted: Jan 7, 2013 9:00:41 PM

It's not "for no reason". Speedway would like to make a certain amount of money on each gallon of gas and before the hike they were making far less due to a combination of falling retail and/or rising wholesale since their last price hike. In Illinois, this morning the average Speedway price worked out to about break even after credit card charges.

It's just the way pricing works in Speedway states. Some say that Speedway is also the downward force for prices, although much slower than the spikes up. Been going on for FAR more than the last year. And you're not gonna change it. If the local dealers match Speedway all the way down they'll match them on the way up or undercut them just enough to take away business. Why shouldn't they. Dealers are always searching for the sweet spot in pricing.

Welcome to the world of the gasoline business. And if you ever get an inkling to do more than complain, I'm sure your local Detroit gasbuddies would appreciate your posting some prices.

Oh & one more thing if you're following "RBOB...on CNBC" good luck with that. Those are prices for future delivery of gasoline in the NYC Harbor. The value and day to changes don't mean much for you in Detroit. There are both spot prices for immediate sale and contract prices for wholesale delivery available in the Midwest and they tend to be more volatile than the RBOB future in NYC harbor.



[Edited by: AFOS at 1/7/2013 9:07:11 PM EST]
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