by John Keller | Mar 8, 2013 | Customer News, Fuel Price Management Solutions, Fuel Pricing Software, Fuel Pricing Strategy
Congratulations to Scott Hartman for his induction into the PCATS Hall of Fame, from all of us at the PriceAdvantage team. Scott has always been a thought leader in the c-store industry, and his visionary guidance has made a big impact on making PriceAdvantage the industry-leading fuel pricing software that it is today.
Scott’s leadership enabled Rutter’s to first roll out PriceAdvantage to all their stores beginning in early 2011. The Rutter’s implementation of PriceAdvantage included a complete command and control solution that included their Radiant (now under the NCR corporate umbrella) POS systems, as well as their Skyline electronic price signs.
Then in the latter half of 2011, Scott’s vision extended the Rutter’s PriceAdvantage implementation to include a GasBuddy integration. Scott recognized that the world of retail fuel price management includes virtual as well as physical signage. Scott led Rutter’s to incorporate their retail fuel price marketing into their overall retail fuel price management strategy by having PriceAdvantage automatically push fuel price updates to GasBuddy once PriceAdvantage finished the fuel price changes. This solution insures Rutter’s always has the most accurate and up-to-date prices on the GasBuddy sites.
What’s next for Scott’s vision for PriceAdvantage? Now that PriceAdvantage can push fuel price updates to OPIS, just like to GasBuddy, Rutter’s will be able to make sure all sites receiving fuel pricing information from OPIS will also have the latest and most accurate Rutter’s fuel prices. With the PriceAdvantage integration to OPIS, Rutter’s will be able to automatically push prices out to AAA, Garmin, and MapQuest, as well as a growing number of sites partnering with OPIS.
Thanks again, Scott. We couldn’t have done it without you. And we look forward to a continued strong partnership with Rutter’s for years to come.
by John Keller | Mar 8, 2013 | Fuel Price Management, Fuel Pricing Strategy, Retail Fuel Margins
An NBC News article published in their Online Business section discusses the addition of Propane to the list of alternative fuels being considered for vehicle retrofitting.
The home satellite provider DISH Network Corp has announced they will run 200 of their trucks on Propane. The DISH Network Corp expects a 55 percent reduction in fuel costs for the Ford E-250 cargo vans that will run on propane – amounting to a saving of about $2,500 per vehicle per year. There are more than 13 million vehicles using Propane worldwide but Propane is a niche product in the United States.
But over the past 3-4 years, the wholesale cost of Propane has dropped in half, and Propane production has increased nearly 50%. The cost of adding a Propane fueling station is less than $50,000 and takes less than one day. That makes it much less of a commitment than adding CNG or LPG fueling stations.
According to the US EIA map of the alternative fuel stations in the lower 48 United States, the number of Propane stations is second only to Electric, and just ahead of E85 stations. But while Electric stations are concentrated in the urban areas on the coasts and Great Lakes, Propane stations are more widely distributed across the whole US, including Texas and the Mid-west.
As we monitor the growth of alternative fuels in the retail fuel management industry, retail fuel pricing managers would be wise to consider adding Propane to their product portfolio as a market differentiator, and an opportunity for high fuel margins.
by John Keller | Mar 1, 2013 | Fuel Price Management, Fuel Pricing Strategy, Retail Fuel Margins
The latest OPIS report showed retail fuel margins jumped $0.062 for the week, the largest weekly gain since late October 2012. The average retail margin throughout the US now stands at $0.164 per gallon.
The gain this week brings the retail fuel margin for the month of February to $0.096 per gallon. The average US fuel margin for all of 2013 now stands at $0.131 per gallon.
This week’s number is a welcome relief to the fuel pricing manager and we can only hope the roughest times for this season are behind us.
by John Keller | Feb 21, 2013 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
In the latest US Energy Information Administration “This Week In Petroleum” report, the US EIA says there are signs that improved fuel margins may be on the horizon.
From the report: “Despite the significant rise in retail gasoline prices since the start of the year, a part of the even steeper rise in wholesale prices has not yet been fully reflected in pump prices. Thus, if wholesale prices were to remain steady rather than decline, a modest further increase in pump prices would be expected.”
That means the potential is there for retail fuel prices to increase a little more to cover the wholesale price increases seen since the beginning of the year. That would allow c-stores to catch up in their margins. How likely are wholesale fuel prices to remain steady? The report states that refinery maintenance typically peaks in February, so we should be nearly finished with that part of the season. The report also states that 11 million barrels of waterborn gasoline are on their way to the US and Canada. And finally, the report states that reformulated gasoline blendstock for oxygenate blending (RBOB) futures and Brent spot prices have declined recently.
It has been a tough start to the 2013 year for c-store fuel margins. We can expect Q1 retail fuel results to reflect these low fuel margins in January and February. Hopefully the wholesale prices will settle and allow c-stores to return to normal retail fuel margins in March and on into the spring when retail fuel demand begins its annual increase.
by John Keller | Feb 7, 2013 | Fuel Price Management, Fuel Pricing Strategy, Fuel Pricing Technology, Industry News
According to a new University of Michigan study, new vehicles sold in the US have a record miles per gallon rating, reaching 24.5 mpg. That is a full 1 mpg increase from January 2012, 2 mpg increase from January 2011, and 4 mpg increase from January 2008. A month by month detailed table can be found here.
Last month I wrote a summary of the US Energy Information Agency January report, where the USEIA explained that the primary cause for ongoing decreased fuels consumption in the US is increased auto fuel efficiency. This Michigan study correlates well to that study, and in combination, the two studies help us predict the future of US retail fuel sales volumes – we can expect lower volumes this year than last.
From a fuel pricing strategy standpoint, we can anticipate an increasingly competitive fuels market, as the overall fuels volume pie continues to shrink. The practice of fuel price management is not for the weary, and requires careful attention to monitor margins and volumes store by store, market by market, with a well executed fuel pricing strategies plan.
by John Keller | Jan 23, 2013 | Fuel Price Management, Fuel Pricing Strategy, Fuel Pricing Technology, Industry News
IGS is an independent retail supplier of natural gas, and a company with a vision of an energy independent United States. They now plan to build a network of CNG (compressed natural gas) fueling stations along I79 from West Virginia to Pennsylvania. IGS plans to finish this first corridor by the end of 2013, and continue to expand with more stations into the future.
IGS touts the main advantages of CNG fueling stations as 1) less expensive fuel than gasoline or diesel, and 2) refueling time is about the same as traditional fuels.
According to the US Department of Energy, there are now 558 CNG fueling stations in the US, excluding private stations. That is the fourth most common alternative fueling station behind electric, propane, and ethanol. But CNG expansion continues to be in the news, with municipalities announcing conversions of their fleets to CNG, announcements of more CNG fueling station networks being built, and auto manufacturers announcing the availability of stock CNG versions of their vehicles. It could be that 2013 becomes the year of CNG, laying the groundwork for a tipping point where we see a rapid increase of CNG vehicles on the road.
From a fuel price management standpoint, CNG presents another indicator of the overall traditional fuels volume pie shrinking, and the potential opportunity of a whole new fuels market for the taking. Which c-store chains will be the pioneers in this new opportunity, and which will follow?
