This article appeared in this morning's Cincinnati Enquirer talking about retailers delaying price drops in order to increase their profit margin. Retailers smiling as gas prices fall I always figured it was going on but was surprised to see it acknowledged so blatantly.
Nothng new here. In Economics we learned of the "ratchet" effect: prices easily climb but very slowly fall, or if they fall they establish a higher setpoint. Case in point I keep my gas receipts as most of my travel is business. March of 2004 gasoline was 64 cents a litre, around $2.42 a U.S gallon before exchange. They peaked last month at $1.19 a litre, or $4.50 a U.S. gallon. The gas prices appear to have stabalized at $1 a litre or $3.78 a U.S. gallon. Some of the lower life forms breathed a collective sigh of relief "whew gas is cheap again!"
Weird. It topped at $1.20 here and is now at 97.9¢/litre. Subtract 3.5¢/litre discount at most stations and it's 94.4¢/litre Edit: Just checked. 95.9 - 3.5 = 92.4¢/litre.
