My wife just called from a gas station outside Fuquay-Varina, NC. She was informed at her meeting that You’d better get gas tonight, because tomorrow it’s going to be $2.87/gal. This would represent a 42-cents-per-gallon increase from the pump prices I witnessed earlier this evening. Apparently bunches of people heard about this, because my wife reports long lines at several gas stations, including the one she stopped at (and at which she paid $2.45/gal.) *Update: I have heard from others a rumor of a 40-to-50-cent price increase overnight.*
Nevertheless, I am quite skeptical. I think I know what those reports are based on ? the opening price of crude oil this morning, which went above $70/barrel over Hurricane Katrina worries, but declined as the day went on. But it makes no sense for price-taking retailers to wait a whole day before changing prices if they and everyone else know that tomorrow the price at the pump will be 42 cents higher. At least that’s what I told my wife, who being pragmatic decided to stick it out. I expect that the pump price will steadily increase over the next few days as the full effects of Katrina are learned ? but an overnight price spike in combination with no change whatsoever in the price during the day and into the evening seems highly irrational.
But for what it’s worth, my wife did report seeing one gas station that had closed for the night had listed $2.79 on its signs for tomorrow.
