What causes the periodic jump of 10-20 cents every 6-9 days or so as seen at the link below. (Change the time scale to see how it goes on for years).
http://www.ftwaynegasprices.com/retail_price_chart.aspx
It appears to happen in other midwest cities too, but not everywhere in the US. It also doesn’t regularly tend to coincide with any jump in crude oil prices.
It looks like Indiana has a high number of the Speedway gas station. Apparently this chain buys gas on the spot market instead of using longer term contracts. Thus the price bounces around more than in other states where other chains are more numerous.
Looking into this further, it may not be because of spot markets prices but because Speedway is more aggressive in pricing because all of its stores are owned by the company and not by franchisees. This leads to a dynamic known as the Edgeworth price cycle.
That link says the Edgeworth cycle occurs under the opposite conditions: when there are a high number of small independent retailers.
Here’s a link that describes the phenomenon, specifically identifitying it as something that has developed in the midwest since the year 2000: Redirect Notice (warning: PDF)
Skimming it, it agrees that in general price cycling is linked to more independent stations in a market, but does observe that the midwestern price cycling does seem to have come about after the merger that formed the Speedway chain in 1998, but doesn’t venture any guesses as to why that is.
Maybe someone who’s interested or needs their insomnia cured can give it a more thorough reading.
Speedway is not a vertically integrated firm like Mobil or Exxon so it takes the place of the larger competitor in the scenario. The smaller retailers take their pricing cues from Speedway. So in the midwest there are a high number of small retailers and a price leader which controls the costs and is committed to agressive price changes. Thus to see the phenomenon, you don’t need all independent retailers, you need a bunch with one or two larger firms.
From my reading it seems like this practice is expanding and will probably be coming to most of the rest of the country.
It was until very recently, though. The merger back in '98 that created Speedway and apparently started the funky gas price cycles was Marathon Oil (which owned everything from the oil well to the gas station) buying up Ashland, which ran refineries and gas stations. In 2011 they split off the retail and refining parts of the business into separate companies, but before then they were integrated. I would imagine they still have a pretty cozy relationship with the Marathon subsidiary that does own those refineries, though.
But, yeah, I thiiiiink the gist of that report is what you were saying. That the large number of independent stations following the lead of a single large player is what’s driving the cycles. That the large player has switched from being vertically integrated to now retail-only seems to have had no particular effect.