by John Keller | Aug 2, 2012 | Fuel Pricing Strategy, Industry News
In the Harvard report “Oil: The Next Revolution, The unprecedented upsurge of oil production capacity and what it means for the world”, Leonardo Maugeri predicts a change in the balance of power and and a long-term lower oil prices for the remainder of the decade. From a fuel price management perspective, this is a fascinating picture of where we are today and where we are likely to be in the coming decades.
Mr. Maugeri outlines a range of different scenarios with varying economic possibilities ranging from a new world-wide economic recession, a sudden solution to major political tensions, a collapse of the China economy, and a sudden recovery of the world economy. Mr. Maugeri writes “I have no particular preference for any of these scenarios…although I think the probability of a significant fall in oil prices is higher than all other scenarios.”
The paper asserts that its most important messages are these:
- Oil is not in short supply
- The oil market is global and none of its pieces/countries can be insulated from the other
- The shale boom in the US is the most important revolution in the oil sector in decades
- Conventional oil production is growing throughout the world
- The oil market will continue to remain volatile through 2015
- The Western Hemisphere could return to pre-World War II status of self-sufficiency
by John Keller | Jul 31, 2012 | Retail Fuel Margins
Valero retail fuel margins and volumes generate record high operating income.
In today’s Q2 business update, Valero announced the Corner Stores retail division contributed record high quarterly operating income, thanks to the combination of their robust retail fuel margins and retail fuel volumes. The US Corner Stores retail division had quarterly retail fuel margins of $0.303 up from $0.204 for the same period last year. Retail fuel gallons per store per day were 5,162 which was up from 5,094 the previous year.
For the first six months of the year, Valero Corner Stores retail fuel margins in the US stand at $0.178 which is up from $0.142 year over year.
The Valero earnings report for this quarter may be found here.
The PriceAdvantage team is proud to have Valero as a partner that selected PriceAdvantage as its fuel price optimization software, and we are happy to share in the great success of the Corner Stores retail group.
by John Keller | Jul 6, 2012 | Retail Fuel Margins
Retail fuels prices remain flat this week says AAA.
According to AAA, OPIS and Wright Express, national regular gasoline prices held steady for the week at $3.358 per gallon after having dropped almost $.60 per gallon since early April.
Michael Green, a spokesman for AAA, says this could be a sign that the cycle of declining gas prices has come to an end.
From a fuel price management standpoint, these times require a watchful eye on fuels prices on a market by market basis, because margins may begin their decline as retail prices hold steady.
by John Keller | Jul 5, 2012 | Fuel Price Management, Retail Fuel Margins
Today we had an interesting conversation with a CEO about what benefits he gets out of using PriceAdvantage as his retail fuel price management solution. He listed two specific interwoven benefits.
He described what it was like before PriceAdvantage, where he would send fuel price changes to the stores, and the store personnel would assure him they had implemented the price changes. Then he would drive by his stores and see they still displayed the old prices because the store folks hadn’t in fact changed the prices. Then there would be hours spent following up with the locations to follow through with the price changes. As you can imagine, this was a source of great frustration because his stores did not have the right prices at the street, and there were a lot of hours wasted on operations that would be better spent on strategic thinking.
Now with PriceAdvantage, he says he knows the price change has been completed when his Fuels Manager receives the automated successful price change confirmation email. In most cases, the Store Manager is removed from the fuel price change process completely because his company has integrated PriceAdvantage with the VeriFone POS. And in those cases where there is an operational problem, the Fuels Manager receives an automated email notification of a delayed price change, allowing her to follow up on an exception basis. That results in a savings of upwards of two hours each day.
So the PriceAdvantage benefits for this CEO are two-fold: confidence that based on their gasoline pricing strategy, the right retail price is at the right store at the right time, and hours gained each day in the operational fuel price change process.
by John Keller | Jul 3, 2012 | Fuel Price Management, Industry News
According to NACS, there have been accusations of fuel price gouging in the aftermath of last week’s storms and the declaration that West Virginia is in a state of emergency.
According to West Virginia Assistant Attorney General Douglas Davis, state law says “you take the date of the emergency declaration, go back 10 days, and whatever the price was then, you can raise it 10% before we get interested.”
In Virginia, price-gouging laws are in effect through July 30, after the Governor declared a state of emergency June 29. The law in Virginia states that businesses can be charged with price gouging if they charge a price that is “unconscionable” when compared to the average price of the same product during the emergency declaration. The term “unconscionable” is not defined.
In times of these accusations, Fuel Price Management software solutions such as PriceAdvantage can shorten a fuels price audit from days needed to track down stacks of spreadsheets, to a few minutes needed to run a built-in fuel pricing history report.
