by John Keller | Oct 4, 2013 | Industry News, Retail Fuel Margins
The latest OPIS report reveals that average retail fuel margins across the US reversed their four week trend, dipping $0.027 per gallon to $0.255 per gallon. Throughout the month of September, average retail fuel margins across the US rose $0.111 per gallon from $0.171 per gallon to $0.282 per gallon. The drop this week nearly offsets the increase in average retail fuel margins from last week, but still leaves the average fuel margin at the highest level since August 16.
The year to date average retail fuel margin across the US increased $0.002 to a strong $0.188. The six week average retail fuel margin is $0.221 per gallon.
These fuel margins are at the highest level of any opening week for each of the three quarters this year.
These numbers seem to indicate that while fuel retailers across the US used September as their opportunity to take advantage of falling costs, the competitive environment is now leading to price drops that allow for maintaining volumes.
by John Keller | Oct 4, 2013 | Uncategorized
Home CNG filling stations have been available for years, but at an up-front cost of $6000 and a four year payback, unit sales have been tiny and the technology has not caught on across mainstream America.
But GE, Whirlpool and Eaton are working on new home filling units that could cut the cost down to $500. And that has the attention of Honda, the auto company currently offering one of the only CNG powered passenger cars in the US.
CNG is now priced at $1.40 per gallon, and CNG powered passenger cars have a driving range of 200 miles, far better than most electric vehicles currently on the market.
While there are over 120,000 gasoline stations across the US, there are currently only 605 CNG stations open to the public in the US. But if in the next few years these affordable home CNG filling stations become mainstream, and more CNG powered vehicle offerings become available, there will be an increased CNG market available for fuel retailers to tap in to as more drivers away from home will be looking for a CNG fill-up.
As I wrote last year, GE announced at the 2012 NACS show a “CNG in a box” offering for fuel retailers, providing an opportunity for margins even higher than in the store. On the east coast of the US, there is a coming CNG highway planned to extend from Pennsylvania to West Virginia. Retail stations providing CNG are growing in number in Georgia.
Fuel retailers need to keep a close watch as this CNG infrastructure grows in size across the US, and decide when it makes sense to add CNG to their product portfolio, and take advantage of the fuel margins the opportunity offers.
by John Keller | Sep 30, 2013 | Fuel Price Management Solutions, Fuel Price Optimization, Industry News, PriceAdvantage
A team representing PriceAdvantage just spent the week at the Insight NACS Future of Convenience industry show in London. It was an exciting time for us because for the first time we were able to show off the international capabilities of PriceAdvantage, where we can now price fuel in any country, without constraint for gallons or liters, or number of digits to the left or right of the decimal. Where previously PriceAdvantage was only able to handle prices ending in nine tenths, PriceAdvantage can now price fuel to three digits to the right of the decimal, and unlimited digits to the left of the decimal. That means from now on PriceAdvantage is a powerful solution for any country in the world. In addition to this internationalization of the product, we were able to show off the first localized version of PriceAdvantage, fully translated into French.
But this tradeshow was exciting for us in another way as well. It became clear throughout the conference that the same problems PriceAdvantage addresses for our US customers are shared with c-store fuel retailers everywhere. As one speaker put it, there are no unique problems in the c-store business around the world, just the same problems in different parts of their lifecycle. Here are three examples.
1) Retail fuel volumes continue to decline year over year. According to the Belfast Telegraph, petrol sales continue to plunge, as much as 5.8% from January to June of 2013 compared to the same period last year. That represents a decrease of 512 million liters. Diesel fuel sales increased over the same time period, but only by 270 million liters, not enough to result in a net gain. The article attributes the loss to changes in consumer behavior to cut back on their driving.
2) Grocery chains and c-store chains are in a major battle for fuel volumes. This article in the London business newspaper City A.M. reports that supermarkets are in a fuel pricing war. The article goes on to say that the supermarket chain Sainsbury’s just cut their petrol prices by 6 pence and diesel by 4 pence in a battle with Tesco and Asda.
3) Fuel profit optimization is most powerful when viewed as part of the overall gross profits of the store. In many cases, the advertised fuel price is strategically used as an advertisement to attract customers to the high margin food and store merchandise product offerings. One speaker called fuel, merchandise, and food the three pillars of c-store profitability. As retail fuel managers learn about correlations between fuel volumes and in-store profits, and how these correlations vary depending on the markets in which they compete, the fuel managers can use fuel software to optimize volumes and margins based on differing market profiles and with an eye to overall store profits across all categories.
September 2013 represents a significant milestone for PriceAdvantage as it is our launch into markets outside the US. We will continue to introduce more capabilities for our customers around the world, providing a dramatic ROI in a short time frame, by solving industry problems no matter where they may be on the fuel management timeline.
by John Keller | Sep 30, 2013 | Industry News, Retail Fuel Margins
For the fourth straight week, retail fuel margins across the US have increased week over week according to the latest OPIS report. OPIS reports an increase of $0.113 cents per gallon since August 30.
Retail fuel margins across the US are now at $0.282 per gallon, up $0.042 per gallon from last week. Retail fuel margins are now at their highest levels since July 5, and the second highest levels for all of 2013.
The year to date average now stands at $0.186 per gallon, the highest of the year. The average retail fuel margins for calendar year Q3 finished at $0.207, up slightly from the margins of Q2 which were $0.191 per gallon, but down slightly from the Q1 margins which were $0.212 per gallon. The six week average stands at $0.210 per gallon, the highest since July 12.
From a fuel management perspective, fuel retailers across the US had a strong Q2 according to these OPIS reports. In calendar year 2012, the US retail fuel margins for Q4 averaged $0.230 per gallon. Hopefully history will repeat itself and fuel retailers will finish up 2013 with strong fuel profits.
by John Keller | Sep 21, 2013 | Industry News
According to the latest OPIS report, the US national retail fuel margins increased for the third consecutive week, reaching a healthy average of $0.240 per gallon. The increase this week was enough to uptick the average retail fuel margins for the year to $0.183 per gallon, the highest year to date retail fuel margins of 2013.
The average retail fuel margins across the US for this quarter now stand at $0.201 per gallon and the six week average stands at $0.206 per gallon.
We are now into the second week of the annual transition from summer to winter blends, and with the likelihood of Syrian bombings decreasing, it is reasonable to be optimistic that retail fuel margins will continue upward.
