A new report claims a phenomenon striking the Midwest could be responsible for the unpredictable rise and fall of gas prices across the Chicago area.
The phenomenon is called "price cycling," according to GasBuddy, which says it has been studying the practice for more than a decade.
In areas where "price cycling" is allegedly present, gas prices can spike by up to 40 cents per gallon before dropping dramatically and rising again.
That pattern, GasBuddy alleges, can continue on and on and it’s exclusive to the Great Lakes region.
"The high-level explanation is: gas station owners inch prices lower to be competitive," GasBuddy spokesperson Jessica Prouty said. "Prices can drop so low, retailers take a loss on gas. When gas stations can’t sustain the low prices anymore, a drastic price spike happens… quickly."
In Chicago alone, Gas Buddy reports prices have jumped from $2.40 per gallon up to $2.70 in the last three months.
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Last week, AAA says 46 states saw prices drop, and Illinois ranked fifth in the country for largest week-to-week fuel cost decreases.
According to experts, that may be a prediction of things to come - particularly in the suburbs.
"As we speak, prices in the suburbs are starting to make the jump up - another one of those forty-cent jumps," Gas Buddy's senior petroleum analyst Patrick Dehaan said.
Dehaan called it a "follow-the-leader" phenomenon, in which gas station owners will drop prices until they hit their margins, to lure customers in, and then sharply raise the prices - sometimes overnight.
"And then when other stations follow - the first one to go up starts cutting prices again and that kind of repeats the cycle of stations of all following each other whether it’s up or down - they want to compete for traffic," Dehaan added.
The average price cycle, according to GasBuddy, can range from seven to 10 days.
Their app sends out a free price hike alert to let consumers know when a spike is coming, and following the short-term ups and downs of gas prices can mean saving money each time you make a trip to the pump.
"It’s all about timing," Dehaan said, urging motorists to time their purchases.
