by John Keller | Sep 20, 2016 | Fuel Price Management, Fuel Pricing Software, Fuel Pricing Strategy, Industry News
The Colonial Pipeline leak last week continues to impact supplies in the Southeastern United States, especially in Alabama, Georgia, Tennessee, North Carolina and South Carolina. According to AAA, Georgia fuel prices rose $.05 per gallon overnight, but consumers report increases of $.20 per gallon. Alabama Governor Robert Bentley said Monday that gas prices in parts of Alabama rose 20 cents over the weekend, but the governor says he didn’t consider that price gouging. North Carolina Attorney General Roy Cooper on Monday urged North Carolina consumers to report gas prices that seem unreasonably high; over 400 consumers have filed complaints.
Some chains are without fuel in specific areas. A QuikTrip spokesman reported 21 of the 37 stores in the Charlotte, North Carolina area were out of unleaded gas Monday afternoon. In metro Atlanta, more than 60 of the 131 QuikTrip stores were also out of unleaded gas Monday afternoon. QuikTrip is keeping a list on its website of stores in both markets that have gas available.
On that page, QuikTrip writes “Due to supply issues caused by a major pipeline break in the Southeast, several stores are currently out of Regular and Premium Unleaded gasoline. The stores listed below DO have gasoline. Please note we are doing our best to keep this up to date, however this is a very dynamic situation. We apologize if the list below is inaccurate.”
What does this mean from a fuel price management perspective? Four things:
- More than ever it’s critical to keep a close watch on how the competition is priced, since market pricing can change multiple times a day.
- Executing new prices to the street, sometimes multiple times a day in order to keep up with market conditions, is vital.
- Maintaining a complete fuel pricing audit trail for every location, especially comparing prices to the competition, is important if the government ever makes an accusation of price gouging.
- When comparing this time period to previous and future years, it’s important to mark these days as a time when there was a supply crunch. These extraordinary circumstances must be taken into consideration when comparing volumes and margins, since they’re likely to be anything but normal. It is these kinds of special events that can wreak havoc on economic models.
PriceAdvantage makes it easy to track market price moves, and to execute new prices to the street in a hurry. PriceAdvantage reports make quick order of providing audit trails if the government comes knocking. And in the PriceAdvantage analysis views, it’s easy to see notes that you can enter to designate these days as being out of the ordinary.
These are the days when a PriceAdvantage system pays for itself many times over.
by John Keller | Jun 15, 2016 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Industry News
According to the latest report from the US Energy Information Administration, US weekly gasoline demand continues its steady growth from 2015. For the week ending June 10, 2016, supplied finished motor gasoline hit 9,762 thousand barrels per day. That number ties the all time high set August 17, 2007. The third all time high was a month ago on May 13, 2016 when gasoline demand reached 9755 thousand barrels per day. These recorded volumes go back to February 1991.
Year to date, these numbers are 4% above 2015.
What does this mean from a fuel price management perspective? Business may be a little easier to come by right now, as long as you watch margins carefully. During this time of revenue gains on the fuel side, now is the time to make investments in retail fuel management software like PriceAdvantage so that when profits turn more lean, you’ll be better prepared to maximize overall store profitability.
by John Keller | Feb 23, 2016 | Fuel Price Management, Fuel Price Management Solutions, Fuel Price Optimization, Fuel Pricing Software, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Industry News, PriceAdvantage, Retail Fuel Margins
Here we are heading into the end of February and everyone in the retail fuels business knows the season of rising gas prices is just around the corner. It happens every year: refinery prices increase, wholesale costs go up, and eventually the retail fuel marketer must respond.
We’re already seeing signs of this season being upon us. According to the Lundberg Survey, the average unbranded rack price for Regular Unleaded across the US has risen over seven cents since February 10. In the Midwest, the regional unbranded rack price average has shot up almost $0.23 per gallon in ten days. Yet refiner margins are still low, and pressure to increase margins continues to build .
Demand is higher year to date than 2015. That makes sense because in 2015, total US miles traveled broke a new record at 3.1 trillion miles. That record has stood since 2007, before the recession started. This number reflects miles traveled by passenger vehicle, bus, and truck. All indications are that 2016 will continue with similar numbers.
What does this mean to the Retail Fuel Manager? I recently spoke with one of our customers who manage a large number of locations across a number of dramatically different markets. He said that as he sees big increases in wholesale cost like what has happened recently in the Midwest, he’s faced with playing a game of chicken. Retailers are looking at each other to see who is going to move first. In order to be most effective in this retail fuel pricing game, you must go beyond simply responding to replacement cost and competitor price changes. You must have access to retail fuel pricing software that quickly shows you historical fuels volume performance for a store and market, compared to budget targets. You must be able to quickly see actual fuels margins store by store and across a region. You must be able to track past history of your prices vs. competitor prices, to get a sense of typically who moves first. And of course, the best retail fuel pricing strategy is a well executed fuel pricing strategy: once you determine the proper price for each grade at each location, you must be able to execute those prices out to the street across all locations.
One could say that recently it was relatively easy to make money in retail fuels because of falling wholesales prices and healthy margins. But as we head into the spring, this is when times get tougher and it takes more insight and faster response times to maximize retail fuel and overall store profits.
by John Keller | Sep 3, 2015 | Fuel Price Management, Fuel Price Optimization, Industry News
AAA is predicting that this Labor Day weekend we’ll see the highest travel miles in seven years. The prediction is for a 1% increase over last year, and the fifth consecutive increase in miles traveled by automobile this holiday weekend. The weekend officially starts Thursday September 3 and concludes Monday September 7.
More details can be found on CSPNet.com here.
Timing for these high travel mile numbers couldn’t be better for fuel retailers since according to the latest OPIS retail fuel margins on NACS Daily, fuel margins are up 0.159 per gallon this week to a whopping 0.345 per gallon. Even the midwest seems to have recovered from the refinery outage that caused retail fuel prices to skyrocket and fuel margins to plummet.
From a fuel price management perspective, this is a key money making weekend, where fuel pricing software is key for keeping an eye on competitors, volumes, and margins in order to make the best of the opportunity.
by John Keller | Jul 10, 2015 | Customer News, Fuel Price Management, Fuel Pricing Technology, Fuel Software, Industry News
Longtime PriceAdvantage and Skyline sign customer Parker’s announced the release of their new mobile app built by Zingon LLC. Among other things, the mobile app displays fuel prices at each of their locations. The Parker’s implementation of this mobile app includes an automated fuel price feed from PriceAdvantage to make sure gas prices are always accurate. Convenience Store Decisions reported the story here.
“Our customers told us they wanted an easy-to-use app that would enable them to access gas prices and Parker’s information at their convenience,” said Greg Parker, Parker’s president and CEO. “This new app represents our fast, fresh and friendly culture. It makes it easier than ever for Parker’s customers to see the best deals on gas prices and our specials on other products.”
Zingon mobile apps are available on both Android and iOS. The apps are designed to be easy to use and to eliminate carrying all the individual elements for store chains: Credit Card, Loyalty Card, Clipped Coupons and a phone to look up store locations and gas prices. Read more about Zingon here.
by John Keller | Jul 9, 2015 | Fuel Price Management, Fuel Pricing Strategy, Industry News
The US Energy Information Administration in their July Short Term Energy Outlook projects increased fuel volumes again this year. The full US EIA STEO report can be found here.
In the tug of war between ongoing increased fuel efficiency of new vehicles driving fuels demand down, and employment growth and lower fuel prices that drive fuels demand up, the US EIA projects that employment growth and lower fuel prices will continue to win and pull up volume demand in 2015.
In 2014, motor gasoline consumption rose by 80,000 b/d. In 2015 the US EIA projects that growth to be over twice as much, or 170,000 b/d (1.9%). But looking ahead to 2016, the US EIA says higher prices and increased fuel efficiency will reverse the two year trend, projecting a decrease in gasoline consumption by 20,000 b/d (0.2%). Still, if that projection proves to be accurate, demand in 2016 will be 150,000 b/d higher than 2014 and 230,000 b/d higher than 2013.
Consumption of distillate fuel, which includes diesel fuel and heating oil, is forecast to rise 2.3% or 90,000 b/d in 2015 and by 1.7% or 70,000 b/d in 2016. This growth is driven by increasing manufacturing output, foreign trade, and marine fuel use.
From a fuel price management perspective, this volume growth is a welcome respite from the many years of volume declines. While it’s certain that volumes like this cannot last forever, this report points to the urgency to make hay while the sun shines and take advantage of the opportunity at hand.