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- 07 Feb
Retail fuel margins hold steady this week
OPIS reported this week that the average retail fuels margin remained steady since last week. Retail fuel margins across the US averaged $0.178 per gallon, compared to $0.179 last week. The year to date average ticked up $0.001 per gallon to $0.173 and the six week average jumped $.007 per gallon to $0.173 per gallon.
Our industry is in much better shape retail fuels margin-wise this year than last year. Consider that the average retail fuels margin is now $0.089 per gallon higher than the $0.084 national average across the US in 2013. That means retail fuel margins in the US are now double what they were this week last year.
According to the 2013 NACS Fuels Report, the industry switch over process from winter blend fuels to summer blend fuels begins in February, beginning with scheduled refinery shutdowns for maintenance. And that means an increase in wholesale cost to the fuels retailer, a cost increase that is not easily welcomed by the consumer. And that puts the squeeze on margins this time of year. Add all that up, and we can anticipate an increasingly competitive market for the rest of Q1, with difficult fuel margins, possibly in the negative range.
In 2013 we saw this trend where average retail fuel margins dropped one cent from February 1 to February 22, ending the month at $0.102 per gallon. That’s negative margin territory for many fuel retailers. Luckily this year our higher margin levels should keep us in positive territory, though that doesn’t mean we can rest easy in these coming weeks.
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