by John Keller | May 16, 2014 | Customer News, Fuel Price Management, Fuel Software, Industry News
As reported by CSPnet.com, Flyers Energy made another acquisition, this time adding the commercial fueling, wholesale contracts and two convenience stores from Redding Oil Co., a fuel distributor based in northern California.
Flyers Energy is northern California’s largest fuel distributor, and continues to grow as it expands its operations throughout the Western United States.
Auburn, Calif.-based Flyers Energy franchises the Flyers fuel brand and distributes wholesale and branded retail fuel, commercial lubricants, renewable fuels and solar power in the United States. Flyers Energy is the largest member of Commercial Fueling Network and is also the marketer for more than 100 Chevron, Shell, Valero, and 76 branded stations. Flyers Energy offers commercial fueling at 230,000 retail gas stations nationwide with the Flyers Fleet Card.
Flyers Energy selected PriceAdvantage in 2012 to manage their fuel pricing process throughout their retail locations.
“PriceAdvantage allows us to automate our fuel pricing process while aligning our pricing strategy and improving communications across our network of sites,” said Tom DiMercurio, Director of Accounting at Flyers Energy. “Our goal is to leverage technology to reduce operating expenses and to provide a means of tracking the implementation of price changes through the whole process. PriceAdvantage is allowing us to accomplish both of these objectives.”
by John Keller | May 13, 2014 | Customer News, Fuel Price Optimization, Fuel Pricing Strategy, Fuel Software
PriceAdvantage customer CST Brands reported their earnings for their first quarter today. Here are the fuel highlights.
- Retail fuel margins before credit card fees were $0.139 per gallon, up from $0.116 per gallon for the same period in 2013. According to the weekly OPIS reports, average retail fuel margins across the US were down $0.001 per gallon compared to last year. That means CST Brands was able to beat the national average this year and gain margins. This is the goal of CST Brands according to previous financial reports, as CST Brands has shifted their fuel pricing strategy to focus on gaining retail fuel margins. CST Brands was once again successful in achieving that margin goal.
- Retail fuel volumes per site per day were 4,797 gallons compared to 5,048 gallons last year. That equates to a 4.97% decrease in gallons year over year.
Is this strategy shift to a margin emphasis working for CST Brands, given the loss of volumes? Let’s do the math. Suppose Q1 of 2014 had the same number of gallons sold in the US as Q1 of 2013. That’s a bold assumption, given that fuel volumes have been on a continual decrease for many years now, but for argument’s sake let’s use that assumption. Multiply the 2013 results of 5,048 gallons by $0.116 per gallon, and you get $585 in daily margin. Multiply the 2014 results of 4,797 gallons by $$0.139 per gallon, and you get $666 in daily margin. That’s an improvement in daily margin of $81. Multiply that by 90 days in the quarter by 1038 stores and you get an improvement of $7.57 million.
Clearly the fuel pricing strategy at CST Brands is working.
CST Brands, when they were under the Valero umbrella, worked closely with the PriceAdvantage team to develop a rich set of analysis views and reports so they could optimize their entire fuels business. Since rolling out PriceAdvantage across all their stores in 2012, CST Brands now reaps the benefit of this rich information in PriceAdvantage by implementing a winning fuel pricing strategy as proven by these quarterly results.
by John Keller | May 9, 2014 | Fuel Software, Industry News, PriceAdvantage, Retail Fuel Margins
The OPIS report today revealed that the average retail fuel margin across the US jumped by $0.056 per gallon this week. That’s the largest jump since January 10. That’s also the third consecutive weekly increase. The average retail fuel margin is now $0.211 per gallon, the highest of the year, and the first time above $0.20 per gallon in 2014.
The year to date average is $0.156 per gallon, while both the quarter to date and the last six week averages are $0.152 per gallon.
The average retail fuel margin last year at this time was $0.144, so we are now $0.067 per gallon above this week in 2013. This is the first week we’re above the comparable week in 2013 since February 21.
Last year at this time there were two more retail fuel margin drops, so hopefully we can keep up the trend we’re seeing this year and make up for all those weeks when we were below the margins of last year.
by John Keller | May 6, 2014 | Fuel Price Management, Fuel Software, Industry News, Retail Fuel Margins
According to an article in Convenience Store Decisions, for the first time since February, the average fuel price for regular gasoline across the US is expected to drop. The author of the article is Brian Milne, Energy Editor for Schneider Electric, and he attributes the prediction to sliding gasoline futures, a drop in secondary wholesale costs, refiners returning units to service after an extensive turnaround season, a higher run rate at U.S. refineries, a continued growth in domestic fuel supply amid the boom in shale oil, and new pipeline capacity to the Gulf Coast.
However, since the US Energy Department announced there will be federal regional gasoline reserves created near New York Harbor and in New England this year in response to the disruption caused by Superstorm Sandy, Mr. Milne wrote that gasoline prices will find “upside pricing support” this summer.
The full article can be found here.
What does it mean to fuel analysts if this prediction proves true? It means retail fuel relief for the first time since February, and an opportunity for fuel retailers to catch up on their retail fuel margins. It means fuels demand possibly beyond the typical seasonal increases we see each summer. And it means some reassurance that if we get hit with another superstorm this year, we’ll be able to make it through without the dramatic impact we saw with Superstorm Sandy in 2012.
by John Keller | May 2, 2014 | Fuel Software, Industry News, Retail Fuel Margins
According to the latest OPIS report, the average retail fuel margin across the US rose $0.01 per gallon this week to $0.155 per gallon. That’s the second consecutive margin increase returning the average back to levels last seen one month ago.
The year to date average is $0.153 and the quarter to date average is $0.140 per gallon. The six week average is $0.145.
The current average retail margin is now $0.007 less than this week last year. The weekly fuel margin in 2014 has been below 2013 every week since February 28. The gap between this year’s and last year’s margins is now the smallest since that week.
We look forward to the margin trend line of 2014 crossing above the 2013 trend line next week.
