- 28 Sep
Fuel price management must consider published rack prices
When optimizing fuel prices in the fuel price management process, there are numerous factors that play a role in determining the optimized price at any given point in time. Obviously the current price at each primary competitor is important, as well as the knowledge of which competitor moved recently. Another consideration is the current replacement margin, and the historical actual margin relative to corporate goals. Historical volumes compared to target are another important consideration. But there is one more less obvious yet still critically important consideration to make when optimizing fuel prices.
Fuel Managers must be aware of the published rack prices in each of their markets in order to compare store cost to the cost of the competition. The published rack cost allows you to compare your replacement margins with those of your competitors. The published rack cost tells whether your stores are at a competitive advantage or disadvantage relative to the competition, and can help you anticipate how the competition will react to your price move, based on whether or not they have the margin to respond.
This information is so integral to the fuel price management process that PriceAdvantage is now working with OPIS to import the OPIS published rack cost into the centralized PriceAdvantage fuel pricing software system. Each PriceAdvantage customer configures which markets and which terminals to include for comparison to their fuel costs, and the published competitor rack cost is then automatically imported multiple times a day.
The power of having this OPIS information in the PriceAdvantage fuel pricing software system is that it puts all the critical fuel price management information in one centralized system, allowing the fuel manager to react that much more quickly to market changes, and to optimize both volume and profit.