by John Keller | Nov 14, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
The OPIS report today showed that retail fuel margins across the US remain strong. The average retail fuel margin now stands at $0.247 per gallon, down $0.028 per gallon from last week, but still $0.025 per gallon higher than this same week last year.
The year to date average is the same as last week, remaining at $.205 per gallon. The average for the quarter is down slightly to $0.297 per gallon. The six week average is up slightly to $0.311 per gallon.
What can we expect in the upcoming weeks? Last year we saw margins dip slightly through the rest of November, before bottoming out the end of December. Last year the final week of the year had retail fuel margins of $0.14 per gallon, which was $0.09 per gallon lower than this equivalent week last year. If wholesale costs don’t drop further, we may see such a drop again.
by John Keller | Nov 13, 2014 | Fuel Price Management, Industry News
The Natural Gas Vehicles for America, a national organization “dedicated to the development of a growing, profitable, and sustainable market for vehicles powered by natural gas or biomethane”, just unveiled a new interactive map to show natural gas stations and driving ranges from those stations. You can find the map here.
The map shows both CNG and LNG stations throughout the US. Existing stations and planned stations are included, as well as both public and privately owned stations.
According to NGV America, there are now 1,436 CNG and 101 LNG natural gas stations operating in the US, and it is projected that an additional 250 to 300 new stations will be built in 2014. Only a little more than half of these stations are “public access”. For comparison sake, there are currently over 126,000 gasoline / c-store stations across the US.
The highest density of planned CNG stations include the front range of Colorado, connecting the southern border of the state to northern Denver. Another planned increase of stations connects the southern end of San Diego to the Los Angeles basin, including Riverside. There is another series of stations planned to connect the DC area up to central Ohio, across Pennsylvania east to New Jersey, and north to Connecticut and Rhode Island. The number of planned CNG stations outnumbers the number of planned LNG stations 2:1.
What does this mean from a fuel price management perspective? While we’re not seeing a wave of new natural gas stations popping up across the US to meet the overwhelming demand, there may be opportunities to add natural gas to your product portfolio based on the demographics of your customer base.
by John Keller | Nov 7, 2014 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
The OPIS report today revealed the average retail fuel margin across the US remains higher than this same time last year. The retail fuel margin average stands at $0.275 per gallon, down $0.037 from last week, but still $0.044 per gallon higher than this week in 2013.
Once again the year to date average increased, up $0.002 per gallon to $0.205 . The average for Q4 remains at a robust $0.306 per gallon, the same margin as the six week average.
Earlier this week Saudi Arabia unexpectedly cut their prices for crude sold to the US, but raised their prices for crude sold to other locations including those in Asia. Earlier this week crude was trading below $77 per barrel, but at the time of this writing, it is trading at just under $79 per barrel.
From a fuel price management perspective, indications are that wholesale prices are likely approaching their bottom levels of the year, meaning retail fuel margins will likely continue to decrease slightly as retailers compete for volumes over the remaining weeks of 2014.
by John Keller | Nov 7, 2014 | Customer News, Fuel Price Management, Fuel Pricing Technology, Fuel Software, Retail Fuel Margins
The quarterly financial report from Murphy USA, Inc. showed an increase in both retail fuel margins and volumes for the three months ended September 30, 2014.
Retail fuel margins hit $0.175 per gallon for the quarter, up from $0.148 per gallon year over year. Retail fuel volumes were up 2.7% year over year to 281,185 gallons per store per month. Combining both increases yielded a fuel margin dollar per store per month of $49,347, an increase of 2.7%.
The NACS industry research states that the average c-store sells approximately 123,000 gallons per month. That means Murphy is selling more than double the average.
Skyline Products and Murphy Oil have an exclusive license agreement for the PriceAdvantage fuel price management software. The patent is based on the PriceAdvantage software determining the price of a fuel product, sending those price changes to the store including the electronic price signs, the POS, and the pumps, and then verifying the completion of the change. This rapid closed loop fuel pricing software process is key to the Murphy Oil fuel price management success.
by John Keller | Nov 3, 2014 | Customer News, Fuel Price Management, Industry News, PriceAdvantage
PriceAdvantage customer CST Brands opened yet another store last week, this time in Humble Texas, which is in the Houston Metropolitan area.
As part of the opening ceremony, CST Brands presented a check for $5000 to the Humble High School Band, as a sign of commitment and appreciation to the community.
This year, CST Brands plans to build 30 brand new stores in the U.S., adding to its network of 1,046 stores throughout Texas, Louisiana, Arkansas, Oklahoma, New Mexico, Colorado, Wyoming, Arizona and California.
CST Brands selected PriceAdvantage as their fuel price management solution company-wide when they were still under the Valero umbrella in 2011. The full PriceAdvantage implementation was completed in 2012.
Read more about the opening ceremony here.
by John Keller | Nov 3, 2014 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
According to the Wall Street Journal, four of the biggest oil companies are seeing lower profit margins and may be inclined to cut production.
These big four include Exxon, Shell, Chevron, and BP. Between the four, they are halting plans to expand, and selling off operations. Why? Because over the past twelve months, they averaged a 26% profit margin on their oil and gas sales, down 9% from ten years ago.
That’s what happens as the global cost of a barrel of crude goes through the steep decline we’ve seen this year. If these big four cut their output, it could result in a win for OPEC, which is betting that their strategy to keep up their output at current prices will apply enough pressure to force others to back down on their output as oil production becomes less profitable.
What does this mean from a fuel price management perspective? It means we may have hit a low point of wholesale prices, and that as retail prices continue to fall as retailers fight for business, margins will shrink as we finish off the year.
