'The Speedway Effect'?

Analyst speculates on local pricing as a result of GasAmerica deal

Published in CSP Daily News

INDIANAPOLIS -- Speedway LLC's purchase of 88 locations from Greenfield, Ind.-based GasAmerica Services Inc. in Indiana and Ohio last week has led to speculation over how the deal will affect retail gasoline prices in the Indianapolis area, according to a report by WISH-TV.

The "big convenience store chain will take over one of its smaller competitors--and that may not be a good thing for consumers, the news outlet speculated.

(See Related Content below for previous CSP Daily News coverage.)

An analyst for GasBuddy.com said the deal is likely to lead to higher prices in central Indiana.

He calls it "the Speedway Effect."

"So the Speedway Effect is essentially leadership or pricing control in these markets," Patrick DeHaan told WISH. "Speedway tends to be a very competitive chain. And their strategy is simply that they are the first to move in either direction."

Shane Pochard, a spokesperson for Speedway, said he is not aware of the pricing practices used by competitors. He said Speedway analyzes different factors and then sets the best price possible.

Pochard also refused to speculate on the gasoline prices motorists are likely to pay in this summer's driving season.

"If we did, we'd probably be wrong most of the time," he told the news outlet. "There's so many different factors that influence the price of gas."

DeHaan, on the other hand, said the relatively low prices we're enjoying now will probably be with us until March or April. Then, when the industry shifts to summer gasoline, we "may see a real unpleasant spike."

As part of the purchase agreement, Speedway will also acquire all trademarks, trade dress and intellectual property from GasAmerica. The transaction is anticipated to close by the end of May 2012, subject to regulatory approvals, customary due diligence and other closing conditions.

Enon, Ohio-based Speedway owns and operates the nation's fourth largest c-store chain, with approximately 1,375 locations in seven states in the Midwest, is an indirect wholly owned subsidiary of Marathon Petroleum Corp., Findlay, Ohio.

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fuel prices