General Discussion

they call them "upward sticky" or "upwardly sticky" because they tend to jump up very quickly but take a long time to come back down.

the up quickly part is easy to explain. gas station managers can easily track oil and gas spot market prices in real time and when there's a spike, they can easily anticipate that the next gas shipment will be more expensive, and also that all their local competition will face the same price hike, so they can all jack up prices quickly knowing that the competition can't underprice them for very long if at all.

the real fun happens when the crisis is resolved and oil/gas spot market prices come back down. gas stations aren't in a hurry to lower prices because they make a ton of extra profit by keeping prices high while their own costs have already come back down. so what develops is a fragile "implicit trust" among local competing gas stations. they all benefit if they all keep prices high.

but the temptation to undercut the competition eventually causes someone to break the implicit trust, or maybe they just want to empty their own tanks ahead of a fresh delivery. and once someone lowers prices, they all do, even if its just inch by inch. eventually prices come back down, but it's a wait and see game on the way down instead of a quick and obvious lurch on the way up.