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The Great Mishawaka E85 Price War of August 2018

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Is competition good for consumers?  I think it is, sometimes, and I'll show you.

Indiana, which grows a lot of corn, has quite a few E85 stations, but not all of them are bunched together.  My sleepy town finally just got one, maybe.  I'm not sure which side of the Cedar Lake/Saint John border the new Family Express is on, and from all the various addresses for the place, no one else is sure either.  Anyway, it's the only E85 station in town (maybe) and if there isn't another station nearby, stations can charge what they want due to the lack of competition.  For FE in my town (maybe), that is one, stable, chain-wide price, independent of the price of E10 or any other fuel, previously $2.099 in early August of 2018 and for the previous two plus months I'd watched it and now $2.199 (3 cents off with perks card, it'll be important later), usually.  FE stations do seem to have a little price latitude.  A few price higher, some price lower usually in response other stations in the area.  What if another station responds to your lowering prices with even lower prices?  Then you have the makings of a price war!

Not every price war turns into a hot war.  Some are of a cooler variety.  Out in Valparaiso, there is a price conflict of the less heated type.  Two chains, Family Express and Casey's General Store, are engaging in their own little price cold war.  Casey's, as far as I can see, can price their E85 however they like as well, it's not a fixed offset from the E10 price like the Speedways in the area.  The prices today in that area are FE $2.029, $2.049, $2.099, $2.099 and Casey's $2.049 and $2.099, which is lower to much lower than the current $2.199 chain-wide FE price.  This war seems to be in a bit of a standoff, with prices staying stable and prices not really moving up or down on E85 at all.  I like stable prices.  I liked filling up the Town Car and knowing what the price would be before I even got to the pump, because it hadn't changed in two months.  You won't get that with gasoline!   So a cold price war ends up with stable prices.  What happens when the war heats up?

Now, I don't know who fired the first shot.  I was just doing my usual price posting on E85prices and saw that the new Family Express out in Blair Hills and the Meijer's in Mishawaka (which are basically down the street from each other) had both priced their E85 at $1.779 a gallon, way below the usual $2.099 that Family Express prices would have been at the time.  Wow!  Those are like straight-from-the-grain-elevator prices!  What was the better deal?  Family Express, with their 3 cent perks card, has a perks price of a mere $1.749 a gallon, edging out the Meijer's price by 3 cents.  This stayed until Meijer's took notice and lowered their price to $1.739 a gallon, even lower than Family Express's perks price.  Family Express fires back, posting $1.759 a gallon, or $1.729 a gallon with perks, edging Meijer's out by one penny.  Meijer's then fires back with $1.699 a gallon, going even 3 cents lower than Family Express's perks price.  Oh gosh, this could get ugly, how long will this go on?  As it turned out, not any longer!   It was about this time that, for some reason, the chain-wide Family Express price was raised from $2.099 to $2.199, and all FE reset their prices, including all three of FE stations in Mishawaka, Blair Hills included.  And with that, the Great Mishawaka E85 Price War was over.  With FE at the chain-wide price, Meijer's raised their price up to $2.099.  This played out over a weekend, 3 days at most.  It was there, and then it was gone.

And the aftermath today?  Meijer's, $2.199, and all three Family Express stations in Mishawaka, $2.199 ($2.169 with perks card), which just happens to be the current Family Express chain-wide price.  I guess they chose peaceful coexistence over a cold or hot war.

 

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It’s funny, because when I began using E85 back in December 2012, one of the major appeals to it was in fact the fixed price it had (I’ve long since discovered many other benefits to the fuel, that more than make up for losing that fixed price concept). At one point in June 2013, gasoline spiked to $4.29, and E85 was at $2.99 (yes, to all the people complaining that gasoline is getting expensive at $2.99, remember where it was just a few years ago?). However with Speedway entering - and subsequently dominating - the E85 market here around Lansing, a fixed price spread is now the law of the land. So I have to rush to get fuel before a hike like everyone else. 

I should say, on a slightly unrelated note, I go by South Bend/Mishawaka any time I go out to Chicago. Even though the 80/90 isn’t in the best of shape, it’s not a threat to my personal safety like I-94 in Michigan is. I’ve not kept up on E85 availability in northern Indiana like I used to because of how few interchanges the 80/90 has on it. I have a fuel stop in Tinley Park IL I always go to. Past couple times I’ve gotten fuel in the city of Mishawaka, whose name is hard for me to say without the occasional chuckle, I’ve gotten it at the Marathon on Cleveland Road just off the Indiana 331 exit. Good to see you guys have some competition.

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I'm pretty new to E85, I drove around for a year before even noticing that this used car I got was a flex-fuel.  It's an older one, a 2007, so it doesn't have the obvious yellow cap on it.  I only realized it was flex when I was reading some article, and one of the comments posted said that engine in my car was flex-fuel.  This was back in May or June of 2018 when E10 had a price spike and about the same time refineries stopped stuffing butane into gasoline, uh, I mean, switched from their winter blend to their summer blend.  With low E85 prices and high E10 prices, it was painless to switch, since E85 was packing more megajoules per dollar than E10 with E85's 25%+ price discount versus E10.  

I do remember the high $3+ E10 prices, but I also remember low E10 prices, too.  A few years back, probably around February of 2016 if the e85prices historical charts are right, the used car before the '07 Town Car was a fancy Nissan Pathfinder.  Driving it home, we needed some gas to make it back.  E10 was $1.249 a gallon.  I didn't want to put twenty bucks in there because I was afraid that however big the gas tank was on the Pathfinder that it couldn't hold it all. 😛

I could see how a fixed spread could be bad, having to fill up before price jumps.  But it can also be good!  With a low enough E10 price and a big enough spread, you can get a deep E85 discount.  Here, the spread is only 60 cents at Speedways in Indiana, so E10 prices have to get pretty damn low to challenge Family Express or to even approach the 25% discount I like ($2.40/$1.80 E85 or better).  In Illinois and Michigan, it's 80 cents at Speedways.  There's a Citgo in Illinois with a 90 cent spread, and E85 was $1.739 yesterday at the Wood Dale, IL Citco, not too shabby.

I believe it is construction season out in Indiana at the moment.  The western approach to my local Family Express has been closed for repair for weeks, and it's major 50mph road and everything!  I suppose some construction is better than no construction, and it should be done in a few days if Google maps is to be believed.  The northern and southern approaches do fall in the "threat to personal safety" category, I think the northern approached is being marked for a widening soon, as it is extra treacherous to traverse at the moment.

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Well hey, congrats and welcome to the E85 club! As I mentioned earlier, I’m going on 6 years with the stuff. My very first car, a 2008 Chrysler Sebring, was flex fuel. I sold it to my dad when I got my Charger, which I ended up giving up about 3 years later in September 2017. I’ve been struggling without a car, and have been trying to save up for a down payment. Using my dad’s when I can. 

Oh trust me, I know how to find the cheapest E85 price and maximize the cost benefit. I’ll use E85 no matter what - and will never switch to gasoline under any circumstances - but I won’t shy away from reaping the rewards. Back when the Yellow Hose program (they sell pre-blended E85 directly from an ethanol plant 45 minutes to my west to retailers across Michigan, on the condition that they keep a minimum fixed price spread) had E85 at a $1 below regular, gasoline prices began plummeting. The spread didn’t drop below $1 at these stations until the New Year in 2015, so I got to see some pretty awesome E85 prices! Do you have any idea how weird it was to see, and how hard it was for a then 21-year-old kid to wrap his mind around, the Total Gallon amount exceeding the Total Sale?3A1487F7-5F7C-4A45-A7F1-DAD6E6E1D40E.thumb.jpeg.395a605c076210f8b5569bc48ea22a38.jpegBF8E67E6-D553-49BF-89AD-939DDF3B04A1.thumb.jpeg.aca54f464915fa71195728804bace841.jpegCEA6619D-E2FA-4B0B-8CCD-7E984B90DE9E.thumb.jpeg.3c871b6a35c26321221d8bf60c4b078f.jpeg

Trust me, I only had $12 at the time, and I still can’t believe even 4 years later that I couldn’t stuff $12 worth of fuel in a 19.1 gallon tank. 

Last June, I had someone challenge me on Twitter to find a lower E85 price than he had. He found $1.27. Darned if I didn’t make a 90-minute each-way trip to the downriver Detroit community of Woodhaven to get $1.17 (before a 3 cent/gallon discount). I take E85 challenges seriously.

66162509-C0BA-44C9-B76F-D0586F70CC81.thumb.jpeg.2f22a8e226357a33acf885c6b782747f.jpeg2D073894-80B2-4091-925D-7AD6BA437C63.thumb.jpeg.c96785c2cde8978c9b5b16bc031cbfb2.jpeg03991600-C977-4C60-A6F9-7D4B440BC132.thumb.jpeg.60964dde3b8494ef8a143df64a2f85cd.jpeg

Oh and as for E10 being that cheap in February 2016, well. Found plenty of that too!

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Oh and I can personally attest to the fact that this wasn’t an error with their sign. This station in Lapeer, Michigan (which no longer sells E85) really did have a spread nearly $2 in the negative in February 2016. 

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I have a station I always go to in Tinley Park IL any time I’m near Chicago. It’s the Gas N Wash at 19420 South Harlem in Tinley Park (Exit 148A off I-80, right at the Cook/Will county line). Not only do they have 6 pumps with E85, but you get a free top-of-the-line wash when you purchase at least 12 gallons of E85! 

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Feel free to shoot me a message here, I’d love to connect with ya. 

To make sure we’re on the same page, which road are you talking about in that last paragraph there? Michigan spends the least per capita on roads of any state in the country. So naturally, many of our freeways are poorly designed and are prone to massive pileups. Oh, and we have the highest auto insurance premiums of any state too. 

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I'm actually not that hardcore about running E85 all the time.  When the energy per volume metrics are favorable, sure, I'll run E85.  But if it's about even, I'll mix up some blend, mathing it out and everything.  I think my current blend is about E20, best guess since no one at Family Express that I talked to knew how much ethanol was in the E85 at the moment.  Haven't found the right person yet!  I just picked a number that sounded good, 70%.  It's highest number I've found on a sticker on any FE pump, just not that particular pump.  I'm guessing it's the same truck that fuels up Saint John that fuels up Crown Point, so I don't expect one place to be running 51% and the other 83% or whatever.  Though I would like some cheap 51% ethanol E85, energy-dense!  Anyway, getting about the same mileage I got with E10, so far, so good!  Maybe I'll try E30 next time around.

I even encourage people to try that E15 stuff, if it's energy-favorable.  At a 5 cent spread, it's usually a wash, but if E10 prices get low enough, like around $2.499, then that 5 cent spread looks more and more appealing, and RVP season is just about over (ends on the 15th).  In Brazil, I think they run around E25 for their "gasoline" and their ethanol is pure enough to drink (don't do that, it's illegal there!), hydrous E100.  I suppose everyone down there has little cards like this https://en.wikipedia.org/wiki/File:Gas_x_álcool_-_70_percent.svg to figure which is better in kilometers per liter, accounting for the 30% discount needed for alcohol.  I suppose here we'd use an app.  If people could see the miles per dollar savings, people would buy fuels blended with more ethanol.  At least here in the Midwest.

Out in the Pacific Northwest, they don't use corn for their ethanol.  They use things like fruit processing plant waste.  You want to see some heavily negative E10/E85 price spreads?  Look no farther than Washington state!  Some stations had E85 pushing $4 a gallon, and the less that was blended in on mid-level blends, the lower the price of the fuel.  Bizarroland out there.

I thought for sure that the station you were going to out in Tinley Park was the Speedway out there (http://www.garygasprices.com/Speedway_Gas_Stations/Tinley_Park/65/index.aspx).  If you zig instead of zag (go north on Harlem instead of south to the Gas N Wash), you'll find it.  E85 was 20 cents cheaper last time I looked, and with an 80 cent spread, a mere $2.029 a gallon.

To my local Family Express, the western and eastern approaches are US-231(https://en.wikipedia.org/wiki/U.S._Route_231_in_Indiana) from its northern (yeah, it bends) terminus to my local station and onward.  It's Parrish Avenue that's treacherous these days (https://www.google.com/maps/@41.4201133,-87.4560941,16z/data=!5m1!1e1).  I'll have to swing by, see if their 10 cents off per gallon perk is still going for their grand opening, that put E85 at $1.999 a gallon.  Otherwise, the perk is 3 cents off a gallon, which is still pretty good since that particular station is priced competitively with everyone else in the area.

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Oh I’ve been to the Speedway in Tinley Park, but even with an extra set of E85 pumps at that station, it is a pain in the behind to get in and out of. The intersection there is always slammed, and good luck getting a spot at a pump. Very much worth the extra few cents to go to the Gas N Wash. The free car wash also makes up for it, and I’m doing business with a place that actually wants to sell E85. Speedway, through their continued installation of just one E85 pump (technically two) out of 12-18 makes it clear that they do not care about how hard it is for so many of us to get to the E85 pump.

When I finally do make it out to the Pacific Northwest (Idaho and Montana have a max speed limit of 80!), I’ll be carrying at least 20 gallons of E85 in the trunk. I’ll also have to not only call and confirm that they have E85 and that the pump is in working order (had that happen in October where I confirmed they had E85 but got there to find the pump was out of order). 

As far as E15, I’d be happy to express my feelings via DM. Let’s just say I’m using E85, and only E85. 

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I was checking prices recently, and saw something unusual.  Yesterday, E10 prices took a dip, and I checked my BTU numbers.  If my numbers are good, E15 is a better buy at under $2.824 if there's a fixed 5 cent difference.  With E10 at $2.599 around here, that puts E15 in the better buy category.  That didn't push E85 prices down like I thought, though. 

Family Express doesn't go by fixed difference pricing on E85.  So it's still the same $2.099.  What about stations like Speedway with a fixed spread?  60 in Indiana, 80 in Illinois, right?  Well, that held, for like 1 day.  Then they realized that they were selling E85 for $1.759 a gallon in Illinois, so they just changed all the spreads.  80 cents dropped to 60 cents in IL for the most part.  60 cent spreads in Indiana became 50 cents.  So if you're in a fixed-spread area, you have to watch for price spikes *and* dips.  Just one more thing to look out for.

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30 cent Indiana Speedway spreads down to 20 cents with E10 at $2.459, and my local Family Express is going with a 2 cent spread on E10 and E15.  More E10 for me!

Illinois Speedways are down to a 50 cent spread, would have to check if it's worth buying at 70% ethanol/volatility class 3, since it's November.

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