- 04 Oct
$.70/gallon wholesale fuel cost increase this week in California = need for fuel pricing software
Gasoline wholesale prices in the Los Angeles area have gone up $0.70 per gallon this week, reaching wholesale fuel prices not seen since November 2007. Sources blame the Exxon Torrance refinery loss of power on Monday, as well as Chevron’s Kettleman-Los Medanos pipeline which was shut down Monday due to the detection of elevated levels of organic chloride in the oil. Maintenance work at the Phillips 66 plants in Rodeo and Arroyo Grande further reduces California state supplies.
Some c-stores are choosing to sell premium fuel at regular unleaded prices, or to shut down pumps altogether, rather than buy at these inflated costs or to sell at margins that aren’t worth it.
All this speaks to the ongoing volatility of the retail fuels market, and the ever increasing need for the robust features included in our PriceAdvantage fuel pricing software. PriceAdvantage makes it easier to navigate these rough market conditions in multiple ways:
- field and store managers record and send notes to fuel managers to keep the fuel pricing team current regarding which competitors are still actively selling fuel during these days, and which are shutting off pumps; these notes are automatically recorded in PriceAdvantage to allow the fuel management team to aggressively adjust retail fuel prices to take advantage of market opportunities as they arise.
- based on the current information of which competitors are still selling fuel and which ones aren’t, fuel managers can adjust fuel orders according to predicted sales volumes that are based on six week and one year historical averages; the predicted volumes minimize risk of getting stuck with high priced inventory when wholesale costs return to normal.
- fuel managers add notes for future reference in fuel volume performance charts to record that these were the days when the market went haywire, to remind future fuel teams a year from now why volumes were so dramatically off target in either direction, either missing targets because pumps were closed because there was no fuel, or exceeding targets because the competition was the one closing pumps.
- fuel managers see better optimized prices that reflect a historical Olympic average where the high and low volume over the past six weeks is excluded, providing a more realistic prediction of volumes when wholesale prices return to normal.