BP Incentive Details – Fuel Pricing Impact

  • BP Incentive Details – Fuel Pricing Impact

    On August 4, 2010, CNN.com reported details of the BP fuel price discounts as explained by a representative of OPIS.

    Here’s what BP is offering, according to Tom Kloza, chief oil analyst at the Oil Price Information Service:

    • Up to a penny off the wholesale price of a gallon
    • A rebate if distributors keep up their fuel sales
    • A discount in the rate BP charges service stations for customers who use credit cards
    • A “temporary voluntary allowance” worth a penny a gallon

    All told, the discounts add up to between three and four cents a gallon, he said.

    CNN also reported anecdotally that one BP station in McLean Virginia was selling fuel prices $.03 lower than the competition across the street.

    Traditionally BP dealers market fuel prices at the premium end of the fuel pricing spectrum. Clearly fuel pricing strategies are now impacted by the BP incentives. Competing c-stores of BP will need to adjust their market positioning in response to the new fuel price positioning of BP stations.

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