- 02 Jul
OPIS Reports Higher Retail Fuel Margins For First Half 2010
OPIS reported today that for the first half of 2010, retail fuel margins across all US operators, including c-stores, were the best in many years. Oil prices stumbled, while demand at the pump held steady. Retail fuel margins from January to June 2010 were at the highest levels in 10 years.
The average gross retail fuel margin was at 16.9 cents per gallon. That’s a 64% increase over 2009. Some specific fuel retailers have reportedly doubled their retail fuel margins so far this year. Even the wholesale membership clubs of BJ’s, Costco and Sam’s Club have reported positive retail fuel margins this year. In previous years these wholesale retailers have sold fuel as a low price leader, sometimes at negative margins.
Perhaps it is these retail fuel margins that have attracted the attention of Green Equity Investors, the private equity firm who purchased roughly 10% of BJ’s stock on July 1, with an intent to discuss options for improving shareholder value. BJ’s stock closed 18% higher that day.
And with the beginning of the second half of the year seeing the barrel of crude trading at $6 under the previous month, these retail fuel margins are likely to continue into the summer.
These numbers reinforce the critically important role the Fuel Manager plays in contributing profits to the company. By carefully monitoring the fuel pricing strategy at each location, Fuel Managers can optimize their prices at each store, and keep these retail fuel margins strong. Now is the time to invest in a robust fuel pricing software application such as PriceAdvantage to continue this trend through the rest of 2010 and into the future. Fuel pricing software allows the Fuel Manager to make these retail fuel margins the new norm.