by John Keller | Nov 7, 2014 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
The OPIS report today revealed the average retail fuel margin across the US remains higher than this same time last year. The retail fuel margin average stands at $0.275 per gallon, down $0.037 from last week, but still $0.044 per gallon higher than this week in 2013.
Once again the year to date average increased, up $0.002 per gallon to $0.205 . The average for Q4 remains at a robust $0.306 per gallon, the same margin as the six week average.
Earlier this week Saudi Arabia unexpectedly cut their prices for crude sold to the US, but raised their prices for crude sold to other locations including those in Asia. Earlier this week crude was trading below $77 per barrel, but at the time of this writing, it is trading at just under $79 per barrel.
From a fuel price management perspective, indications are that wholesale prices are likely approaching their bottom levels of the year, meaning retail fuel margins will likely continue to decrease slightly as retailers compete for volumes over the remaining weeks of 2014.
by John Keller | Nov 7, 2014 | Customer News, Fuel Price Management, Fuel Pricing Technology, Fuel Software, Retail Fuel Margins
The quarterly financial report from Murphy USA, Inc. showed an increase in both retail fuel margins and volumes for the three months ended September 30, 2014.
Retail fuel margins hit $0.175 per gallon for the quarter, up from $0.148 per gallon year over year. Retail fuel volumes were up 2.7% year over year to 281,185 gallons per store per month. Combining both increases yielded a fuel margin dollar per store per month of $49,347, an increase of 2.7%.
The NACS industry research states that the average c-store sells approximately 123,000 gallons per month. That means Murphy is selling more than double the average.
Skyline Products and Murphy Oil have an exclusive license agreement for the PriceAdvantage fuel price management software. The patent is based on the PriceAdvantage software determining the price of a fuel product, sending those price changes to the store including the electronic price signs, the POS, and the pumps, and then verifying the completion of the change. This rapid closed loop fuel pricing software process is key to the Murphy Oil fuel price management success.
by John Keller | Nov 3, 2014 | Customer News, Fuel Price Management, Industry News, PriceAdvantage
PriceAdvantage customer CST Brands opened yet another store last week, this time in Humble Texas, which is in the Houston Metropolitan area.
As part of the opening ceremony, CST Brands presented a check for $5000 to the Humble High School Band, as a sign of commitment and appreciation to the community.
This year, CST Brands plans to build 30 brand new stores in the U.S., adding to its network of 1,046 stores throughout Texas, Louisiana, Arkansas, Oklahoma, New Mexico, Colorado, Wyoming, Arizona and California.
CST Brands selected PriceAdvantage as their fuel price management solution company-wide when they were still under the Valero umbrella in 2011. The full PriceAdvantage implementation was completed in 2012.
Read more about the opening ceremony here.
by John Keller | Nov 3, 2014 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
According to the Wall Street Journal, four of the biggest oil companies are seeing lower profit margins and may be inclined to cut production.
These big four include Exxon, Shell, Chevron, and BP. Between the four, they are halting plans to expand, and selling off operations. Why? Because over the past twelve months, they averaged a 26% profit margin on their oil and gas sales, down 9% from ten years ago.
That’s what happens as the global cost of a barrel of crude goes through the steep decline we’ve seen this year. If these big four cut their output, it could result in a win for OPEC, which is betting that their strategy to keep up their output at current prices will apply enough pressure to force others to back down on their output as oil production becomes less profitable.
What does this mean from a fuel price management perspective? It means we may have hit a low point of wholesale prices, and that as retail prices continue to fall as retailers fight for business, margins will shrink as we finish off the year.
by John Keller | Oct 31, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
The OPIS report today revealed an average retail fuel margin drop of $.057 per gallon across the US this week. But even with that steep decline, the average leveled off at $0.312 per gallon, an average margin that is the third highest retail fuel margin of the year, and $.063 higher than this week last year.
The third consecutive week of margins above $0.30 per gallon nudged the year to date margin average to $0.203 and the six week average to a whopping $0.300. The average margin for this quarter is is also above 30 cents, at $0.312 per gallon.
In 2013, retail fuel margin averages dropped $0.12 per gallon over the course of November before rebounding in early December. Even if that pattern were to repeat this year, which is unlikely given the cost of a barrel of crude continues to decline, the Q4 average would still be robust, possibly matching the Q3 average of $0.240 per gallon.
