by John Keller | Mar 29, 2013 | Fuel Pricing Strategy, Industry News
One of the most interesting trends we’re following on this site is the growth of natural gas as a viable product for c-stores to add to their fuels product portfolio. In December of 2012 we discussed when it may be time to add CNG to your fuels product line. And in January 2013 we reported on the independent fuel retailer IGS building a network of CNG fueling stations.
Now according to Reuters, ENN Group has announced plans to build a network of Liquified Natural Gas (LNG) stations across the US to target long-haul trucking companies. Almost half of the garbage trucks sold in the US last year run on Compressed Natural Gas (CNG), but the long-haul trucking market is significantly higher than that municipality market.
The typical LNG station costs $1m to build. Liquified Natural Gas stations cost less than CNG stations because LNG stations have the liquid fuel trucked in, and do not tap into natural gas lines.
The new stations are being built under the company BluLNG, a partnership created with the Salt Lake City company CH4 Energy Corp. The CH4 Energy Corp had already built one CNG and LNG station in Salt Lake City prior to the partnership, and now five stations are operating, with three more stations scheduled to be opened within the next few weeks.
Both Blu and Clean Energy (who already has 70 LNG stations) plan to build 50-60 new stations this year. Clean Energy has an arrangement with Pilot Flying J for these stations. Blu’s longterm strategy may be to build up to 500 stations, one source said. Shell has also said they are working toward an arrangement with TravelCenters of America, LLC to build natural gas stations at their truck stops.
Whether or not you choose to add natural gas to your fuels product portfolio, as the natural gas momentum continues to build, it will contribute to the overall shrinkage of the traditional petroleum market pie. And that makes it a trend that is too important to ignore.
by John Keller | Mar 29, 2013 | Industry News
In the city of Greer, South Carolina, the Greer Commission of Public Works has installed a new fast fill CNG station with two hoses. The fast fill stations take 3-4 minutes, where the slow fill stations require an entire overnight visit. The 3-4 minute refill is a critical metric because it is equivalent to how long it takes to fill up using traditional fuel.
Unleaded gas is averaging $3.35 per gallon in Greenville County and the CNG cost is $1.70 for the gas gallon equivalent (GGE). That makes CNG half the price of unleaded for the cars and trucks that can access the station.
The Commission of Public Works has three CNG vehicles now, with two more coming in Q2. In addition, several local companies including AT&T and Frito-Lay have shown interest in refueling at the CNG station.
Obviously the GPW is an early adapter in the area of CNG, but other utility companies have said they are already saving $100 per day by operating their garbage trucks on CNG, so clearly GPW is not the first in the marketplace.
This is one more indicator that fuel managers would be wise to monitor the adoption of CNG as a fuel alternative, as CNG continues to gain momentum and mindshare. Perhaps in 3-5 years, or maybe sooner, it would be time to make plans to include CNG in your product offering.
by John Keller | Mar 22, 2013 | Industry News, Retail Fuel Margins
OPIS in their report this week showed US retail fuel margins were down for the second straight week. Retail fuel margins across the US now average $0.195 per gallon, down $0.023 per gallon from last week.
With one week to go for the quarter, average retail fuel margins now stand at $0.154 per gallon, which is roughly the average of January this year. We can expect the average Q1 retail fuel margins for this year will be in this same range since there isn’t enough time to bring up the three month average.
On the positive side, the average retail fuel margin now stands at $0.210 per gallon. If Q2 can begin with retail fuel margins at that level, it will make for a good headstart to the calendar year.
by John Keller | Mar 22, 2013 | Fuel Price Management Solutions, Fuel Pricing Strategy, Industry News
The PriceAdvantage team would like to congratulate the GasBuddy OpenStore team on their announcement of E-Z Mart becoming a customer. E-Z Mart is the latest c-store chain to recognize the importance of social media in the fuel price management process.
The PriceAdvantage and OpenStore teams recognized the importance of integrating social media into fuel price management several years ago, and started working together in late 2010. It was then that we began developing an integration that allowed PriceAdvantage to post the latest fuel price changes to OpenStore, and then in turn to the GasBuddy sites. Rutter’s was our crucial partner as we built out to the requirements, and the initial implementation was completed by Rutter’s in 2012. In 2013 Parker’s completed their combined implementation as well. And PriceAdvantage customer Valero is also pushing fuel prices to GasBuddy.
More and more we’re seeing the marketing department saddling up with the fuel pricing team, as both groups are recognizing the importance of making sure customers see the most recent and accurate fuel prices on the map, using OpenStore to broadcast marketing promotions, all to drive more traffic and fuel volumes to the store.
by John Keller | Feb 23, 2013 | Fuel Price Management, Industry News
In their weekly report, OPIS revealed another loss in retail fuel margins. This week retail fuel margins lost $0.02 per gallon across the US to settle at $0.102 per gallon.
The loss this week brings the year to date average down to $0.127 per gallon. The average US fuel margin for February is likely to be nearly $0.02 lower than January.
With these numbers it’s clear to see that despite all the bad press around rapidly fuel prices this year, it is not the c-store industry that is making money.
by John Keller | Feb 22, 2013 | Fuel Price Management, Industry News
Compressed natural gas is continuing to gain mindshare with Convenience store retailers this year. According to CSNews.com, Convenience Store News lists among their top 10 predictions for 2013 “Natural gas gains more believers”.
Specifically, CSNews writes “Compressed natural gas and liquefied natural gas generated a lot of buzz in 2012, as several c-store operators added natural gas to their fuel offer. We expect the buzz to keep building, with more convenience stores joining in on the trend in 2013.”
Earlier this week, Qwik Trip announced that based on the success of their nine natural gas fueling stations, they are planning to build an additional 12 over the next few months. Both fleet vehicles and individual consumers are buying the natural gas.
Not only does natural gas provide a significantly lower price point for the retail customer, it provides dramatically higher retail fuel margins for the retailer as well. This is the year for fuel managers to ask themselves “Is there a market for natural gas in my customer base?”