by John Keller | Dec 11, 2012 | Industry News
Ever since last July when Valero announced the idea of spinning off their retail division to help add shareholder value, speculation in the c-store industry has been rampant. Would there be a large scale sell-off to a particular suitor or series of suitors? Would Valero sell off the stores piecemeal? Would the 1027 company-owned store chain remain in tact?
Yesterday Valero brought all speculation to an end by officially announcing the spin-off of their retail division, keeping it entirely in tact. The new company will be named Corner Store Holdings, Inc., and it will be publicly traded on the NYSE under the code CST. Valero expects to complete the spin-off by March or April 2013.
The CEO of the new company will be Kim Bowers, replacing Gary Arthur who is moving to the Wholesale Marketing division. Bowers will be in charge of the 1027 stores Valero owns in the US, while Arthur will be in charge of the independent branded stores Valero doesn’t own.
It will be interesting to see what fuel brand options Corner Store Holdings decides to explore, now that they will be out from under the wing of Valero refining. We can expect Corner Store Holdings to enter a growth mode in store count based on a statement from Bill Day, Valero spokesman. “Bowers has a lot of experience in mergers and acquisitions, and expanding lines of business,” Day said. “That’s what retail is all about.”
Valero Retail uses the PriceAdvantage fuel pricing optimization software for their gas pricing strategies at all 1027 company-owned retail stores in the US.
by John Keller | Dec 11, 2012 | Industry News, Retail Fuel Margins
In their Short-Term Energy Outlook released today, the US Energy Information Administration reported that fuel demand in 2012 will be .3% lower than 2011. The agency also projected in the report that 2013 fuel demand will be unchanged from 2012.
In 2012, the .2% projected increase in highway travel was offset by the .5% increase in fleet-wide fuel efficiency, thus the net of a .3% decrease in fuel demand.
In 2013, the US EIA predicts that despite higher assumed growth in U.S. real disposable income and a projected decline in gasoline retail prices of 5.5 percent, forecast motor gasoline consumption will remain almost unchanged from 2012 because of continued slow growth in the driving-age population, improvements in the average fuel economy of new vehicles, and increased rates of retirement of older, less-fuel-efficient vehicles.
From a fuel price management perspective, if these projections prove to be accurate, retail fuel analysts will need to enlist the best fuel price optimization software available to win their share of the fuel volume pie.
The full report may be found here.
by John Keller | Dec 10, 2012 | Fuel Pricing Technology, PriceAdvantage
There’s a new mobile gas prices app available for the iPhone and Android, and this time the prices are not reported by drivers but by the trusted source of OPIS. It’s the MapQuest Gas Prices app available here, and it automatically detects the location of the phone to display nearby retail fuel locations. It also allows the user to enter an address to find gas prices near there, and it can store favorites for quick reference to someone’s most commonly frequented fueling stations.
With the PriceAdvantage OPIS integration, now fuel managers can be sure their latest fuel price information is displayed on the app, and their retail fuel prices are 100% accurate. After price changes are complete, PriceAdvantage sends the newest prices to OPIS, who then posts the price on MapQuest, AAA, Garmin and other sites.
I use the new MapQuest Gas Prices app on my Droid and I find the user interface to be simple to use and extremely accurate.
by John Keller | Dec 10, 2012 | Industry News
In Dekalb County Georgia, east of Atlanta, there are now seven compressed natural gas (CNG) stations providing retail fuel to consumers. Two new stations opened in October, including one with eight fueling bays, making it one of the largest in Georgia. The other new station is the first in the nation to simultaneously produce CNG from landfill gas, dispense it to consumers on site and pipe any excess back into the natural gas pipeline. The renewable natural gas not used as CNG at the fueling station is injected into the natural gas pipeline and transported to other CNG fueling stations throughout the Atlanta metro area. DeKalb County Sanitation Department has converted 40 vehicles from diesel fuel to CNG. The county’s goal is to replace or adapt its entire fleet of 306 sanitation vehicles with natural gas vehicles over the next six years.
Gas South provides CNG fuel for six of metro Atlanta’s seven public CNG stations.
These two new stations are owned by DeKalb County, so the DeKalb County Board of Commissioners is setting the gasoline gallon equivalent price for private users. From a fuel price management perspective, there are times when the price set by the Board is less than the market price.
by John Keller | Dec 7, 2012 | Industry News, Retail Fuel Margins
OPIS reported this week that average retail fuel margins reversed a four week trend and increased by $0.03 per gallon this week. Retail fuel margins are now at $0.198 per gallon.
The increase this week virtually offsets the loss in fuel margins last week, resetting margin levels to those of November 23.
This news is welcome relief to the fuel analyst as we enter into the final weeks of 2012.
