The Integrative Stream

Leading Indicators

My position in society affords me certain advantages in the analysis of leading economic indicators. To be specific, my position in society is about a block down the street from a pair of gas stations in Cambridge, Massachusetts. When I leave the house each day I collect two data points on the price of gas at retail. As I walked to the supermarket this afternoon, I saw the following sign, captured courtesy of my trusty Nokia:

$3.69 for a gallon of premium, $3.29 for a gallon of regular. That’s up forty cents from yesterday, and I believe it’s up from this morning as well. Surprisingly, the gas station on the opposite corner, which is usually a few cents cheaper but generally synchronized, is now dramatically less expensive – $3.09, $3.19 and $3.29 for regular, super and premium. There’s no real difference, other than that one station is a Gulf and the other is a Citgo. One would expect this state of affairs to be good for the Citgo, and they were still doing a brisk business filling up SUVs, but the dramatically more costly Gulf station was still doing good trade.

I suppose that customer loyalty (I’ve always gone to the Citgo even when the prices were even, except when I needed a state inspection; others always seem to visit the Gulf) is trumping price in the short term. I wonder how many days the Gulf station will be able to extract premium rents from their existing customers before defections begin. I’d guess one or two tanks of gas at most.

Update 9/3/05, 5pm: As of September 3rd, the price at this station has remained steady, while the station across the street has raised prices by a dime in each category. The Boston Globe reported this morning that the Gulf’s $3.69 price was the highest in greater Boston yesterday.