by John Keller | Jun 9, 2010 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Industry News
Today the US Energy Information Administration announced that US national average fuel prices were essentially unchanged this week. In their “This Week In Petroleum” report, the EIA announced that fuel price increases in the Midwest and on the West Coast offset price decreases in the East, Gulf Coast, and Rocky Mountains.
This week US national averages dipped less than half a cent, remaining essentially unchanged at $2.73 per gallon. The price was a dime higher than last year at this time. Price changes were mixed, with the East Coast seeing the largest regional decrease, of nearly four cents, to $2.69 per gallon. The averages on the Gulf Coast and in the Rocky Mountains declined about three cents to $2.61 per gallon and $2.79 per gallon, respectively. Moving up three and a half cents, the average in the Midwest reached $2.66 per gallon. The West Coast price rose three cents to $3.01 per gallon, while the average in California increased over four cents to settle at $3.07 per gallon.
Now we all wait to see the what impact hurricane season will have on fuel prices this summer. August and September are typically the most common for hurricanes in the US. In 2008 fuel prices were impacted dramatically by hurricanes, and according to EIA software simulations, the likelihood of experiencing disruptions similar to the 2008 hurricane season (outages of 65 million barrels) or worse is estimated to be 17 percent during the upcoming season, which is quite a bit higher than the probability expected during a normal season (5 percent).
by John Keller | Jun 3, 2010 | Fuel Price Management, Fuel Price Optimization, Industry News, Retail Fuel Margins
In today’s edition of the US Energy Information Administration’s “This Week In Petroleum” report, the US EIA reported a drop in US average fuel prices for the third consecutive week. The cumulative drop across the country for these three weeks is almost $.18 for regular unleaded, which now averages $2.72 per gallon.
This week regular unleaded fuel dropped $.06 on average, which is still priced $.20 per gallon higher than last year at this time. Prices dropped in all regions of the country, with the East Coast and Midwest dropping the most at $.07 per gallon. On the West Coast, fuel prices dropped $.03 bringing the average to $2.98. The last time averages were below $3.00 on the West Coast was back in March 2010. California averages also dropped $.03 but still remained above $3.00 with an average price of $3.02 per gallon.
by John Keller | May 26, 2010 | Fuel Price Optimization, Fuel Pricing Strategy, Industry News
In the 5/26/2010 edition of “This Week in Petroleum” released by the US Energy Information Administration, the U.S. average price for regular gasoline this week dropped almost 8 cents to $2.79 per gallon. The national average price for diesel fuel fell 7 cents to $3.02 per gallon.
This drop in regular gasoline is the largest weekly decrease since July 13, 2009. The diesel weekly decrease is the largest since December 15, 2008.
Prices for both regular gasoline and diesel fell in all areas of the country; the largest drop occurred in the Midwest and the smallest drop was in the Rocky Mountains. On the East Coast the weekly drop was $.07 for both regular gas and diesel, and in California regular gas dropped $.07 while diesel dropped $.08.
The national average price for regular gasoline is $0.35 higher than last year at this time while diesel is $0.75 higher than last year.
by John Keller | May 20, 2010 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Industry News
The Associated Press continues to set consumer expectations that they can expect to pay less at the pump this summer then the summer of 2009.
Highlights of the article:
“Prices for heating oil, gasoline and Brent crude all dropped by at least 3 percent. “People are saying it’s time to get out,” said Michael Lynch, president of Strategic Energy & Economic Research. Earlier this year, Lynch stood out from many of his peers by predicting that oil prices would fall. “The market has gotten way ahead of itself,” Lynch said. “People kept saying that soon demand will go up and inventories will go down. But that’s not happening.”
“Traders started getting nervous as the debt crisis unfolded in Europe. U.S. government data showing that Americans continue to have a relatively weak appetite for fuel have sunk energy prices even further.”
“If the world doesn’t start sopping up excess supplies, oil prices may fall into the $40-per-barrel range this year, Lynch said.”
“At the pump, retail gasoline prices dropped 1.2 cents overnight to a new national average of $2.84 a gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 1.9 cents cheaper than it was a month ago, but it’s 50.6 cents more expensive than a year ago. Experts say gas prices have likely peaked already this year, and it should cost less to fill up this summer than in the summer of 2009. That’s good news for the travel industry as Americans get ready to hit the highways over the Memorial Day weekend, the unofficial start of the summer driving season.
The full AP article can be read here.
by John Keller | May 14, 2010 | Fuel Price Optimization, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
In today’s Short-term Energy Outlook published by the U.S. Energy Information Administration, the independent statistics and analysis organization predicted the Unleaded fuel price annual average will hit $2.86 per gallon for 2010. That’s slightly more than 22% over the 2009 average of $2.35. The report predicts the annual average will rise again in 2011 to $2.98 per gallon.
The report does not blame the Louisiana oil spill for this rise in fuel prices, though it does say there may be a longer term impact on energy supplies, prices, and infrastructure in the region.
As Fuel Managers navigate the gradual rise in fuel prices over the next few years, it’s critical to leverage a fuel pricing software application to make the best strategic decisions from a volume and profit standpoint, day by day.
by John Keller | May 3, 2010 | Fuel Price Optimization, Industry News, Retail Fuel Margins
On April 14, 2010, the National Association of Convenience Stores presented a summary of 2009 performance statistics at their annual State of the Industy Summit. Key statistical takeways:
- Motor fuel sales represent 68.4% of all convenience store sales dollars. That’s despite a 28% drop in fuel prices and a corresponding 26.9% drop in fuel revenue during 2009.
- Total gallons of fuel sold rose 1.3% over 2008.
- Motor fuels retail fuel margins were at 13.8 cents per gallon.
- Motor fuels contribution to the industry’s profit dollars was 27.3%, where in-store sales contributed 72.7% to store profits.
Once again these statistics reinforce the importance of two things:
1. Monitoring fuel volume and retail fuel margins require diligence on the part of Fuel Managers, who are responsible for an enormous amount of revenue, at razor thin margins.
2. While fuel sales contributions to c-store profits may only be one-third of overall in-store profits, there’s no question that effective fuel strategies drive business to that critical profitabilty gained from in-store sales.
