Binghamton Gas Price Jump Linked to the “Speedway Effect”
Drivers in Broome and Tioga counties received a rude awakening when gasoline prices rose by 16 cents a gallon overnight at many stations.
Patrick DeHaan, a petroleum analyst for GasBuddy.com, says the sudden increase in pump prices this week didn't appear to be related to any developments in the industry.
Instead, DeHaan said, the jump most likely was linked to something known in the business as "price cycling." He said it's sort of a game some gas retailers utilized as part of their marketing strategy.
DeHaan said Speedway often employs the technique in many of its markets. He said Speedway stations will gradually lower their prices to sell gas at or just below cost.
Competing outlets closely monitor prices at nearby stations and tend to adjust their prices accordingly.
But, DeHaan said, at some point in the "game" Speedway will move to a "price restoration" that results in a big price jump at its stations in a market. Other competing stations then follow suit. He calls it the "Speedway Effect."
The cost of regular gas at most Binghamton-area Speedway locations went from $2.099 to $2.259 from Monday night to Tuesday morning.
Marathon Petroleum, which owns Speedway convenience stores, doesn't comment about its pricing strategies.
Contact WNBF News reporter Bob Joseph: firstname.lastname@example.org
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