(CBS) — Well, that didn’t last long.
A day after CBS 2’s Ed Curran reported on plummeting gasoline prices, they’ve spiked in a matter of hours.
On a day with no new war, no natural disaster, what’s going on?
It’s called “cyclical pricing,” which is common in the Great Lakes region.
Patrick DeHaan analyzes your price at the pump for Gasbuddy.com
“What we have here is a game of follow the leader, where stations follow each other up, but then they outcompete each other to see who can bring prices down the most,” he explains.
When they hit a level that’s just not profitable, the price shoots back up.
“A station goes from losing money to making a decent amount of money and everybody then follows that leader to the higher side as well,” DeHaan says.
In the Great Lakes region, the leader is Speedway.
An FTC report on this cyclical pricing says their pricing trends have a big impact.
“When prices fall to a level where there is little or no margin, a price restoration may occur,” Speedway tells CBS 2.
These cycles have gone on for more than a dozen years, and the FTC says we’re actually better off for it.
“Once you get down to $3.04, $3.03, $3.02, stations just really love to bring out that out that $2.99 sign,” DeHaan says.
Gas prices are a lot like the stock market. Try to buy on the dips.
The Great Lakes pricing has more of an impact outside the city of Chicago
The Delta Sonic in Tinley Park CBS visited earlier this weekis still at $2.99 a gallon, the Food for Less down the street is also $2.99 and, across the street from them, the shell station at 159th and Central dropped to $3.02 Thursday afternoon.
It’s a gas price war in the south suburbs.