by John Keller | Aug 27, 2012 | Industry News, Retail Fuel Margins
Congratulations to Sheetz as they open their 426th store. Sheetz has been using PriceAdvantage as a key part of their gasoline pricing strategy for over three years and has credited PriceAdvantage with an estimated annual savings of $141,000. PriceAdvantage has reduced onsite service calls by 49% with its ability to remotely reset fuel prices. PriceAdvantage has also increased customer face-time by up to 50 hours per store manager per year.
PriceAdvantage allows Sheetz to instantly react to competitive market changes, and thereby maximize retail fuel margins.
“Our overriding team goal is to ensure that store managers can maximize their time with our customers,” says Mark Wilson, Director of Store Support. “This is a key corporate initiative and competitive advantage for Sheetz. To achieve that, I look for the smartest, most efficient technology in our devices that will allow for low maintenance and high productivity. PriceAdvantage gives us that for our electronic price signs, directly impacting our top line revenue.”
by John Keller | Aug 21, 2012 | Fuel Pricing Strategy, Industry News
A number of articles in the press are proclaiming that experts predict retail gasoline prices will drop after Labor Day. For example, in the Houston Chronicle, Tom Kloza, the chief oil analyst at OPIS is quoted as saying “I suspect the last 100 days of the year will see a strong trend toward lower retail gas prices. That may be the case even if crude drifts a bit higher.”
The most common reasons given for the predicted lower gasoline pricing is the decreased demand after the summer months, and the seasonal shift to less expensive winter blends. Of course those in the industry know this is the standard pattern for retail gasoline prices every year.
From a fuel price management perspective, the fuel manager’s gasoline pricing strategy should include the expectation of a downward trend in retail fuel prices. That’s what the consumer is now expecting.
by John Keller | Aug 17, 2012 | Fuel Pricing Strategy, Industry News
According to an article in the LA Times, the gasoline price increases caused by the Chevron Richmond refinery fire are likely to stop. A spokesman for the Automobile Club of Southern California was quoted as saying “It appears that wholesale gasoline buyers feel that for now, they have captured most of the cost increase that will result from the fire.”
From a fuel price optimization strategy standpoint, the gasoline pricing strategy needs to take into consideration the consumer expectation that gasoline prices are not likely to keep increasing. Fuel price optimization software needs to be able to annotate the historical event of the Chevron Richmond refinery fire, to allow the specific dates of the fire and the market impact to be easily recalled next year.
by John Keller | Aug 15, 2012 | Fuel Pricing Strategy, Industry News
US EIA predicts 2012 retail gasoline prices to match 2011 prices
In the US Energy Information Administration Short-term Energy Outlook report for August, the agency predicts 2012 retail regular unleaded gasoline prices to match 2011 prices of $3.53 per gallon. In 2010 retail prices for regular unleaded gasoline were $2.78 for the year. The US EIA predicts 2013 retail gasoline prices for regular unleaded to dip down to $3.33 per gallon.
These predicted gasoline prices are based on the assumption that Brent crude will average $103 per barrel for the second half of 2012, and $100 per barrel for all of 2013. These gasoline price forecasts also assume that world oil-consumption-weighted real gross domestic product (GDP), which increased by 3.0 percent in 2011, grows by 2.8 percent in 2012 and 2.9 percent in 2013.
From a gasoline pricing strategy and a fuel price management perspective, if these predictions hold true, the overall size of the retail gasoline fuel market is likely to remain steady because drastic gasoline price increases to the $4 threshold are not within sight for the next 18 months.
by John Keller | Aug 13, 2012 | Fuel Pricing Strategy, Industry News
US EIA reports a $0.076 fuel price increase from last week.
In today’s Gasoline and Diesel Fuel Update, the US EIA reported regular unleaded retail fuel prices across the US increased for the 6th consecutive week, this time by $0.076 per gallon to $3.72. Fuel prices are now at levels last seen May 21, 2012. Unleaded regular fuel prices are now $0.117 per gallon higher than one year ago.
Retail gasoline prices increased everywhere tracked by the US EIA except the state of Ohio which saw a $0.126 per gallon drop, and the cities of Chicago and Cleveland which saw a $0.020 and a $0.102 per gallon drop, respectively.
The biggest fuel price increase was found in California at $0.228 per gallon, with a $0.28 increase in San Francisco and a $0.219 in Los Angeles.
From the fuel price management perspective, the Fuel Manager should use this data in their fuel price optimization software to optimize the gasoline pricing strategy in each of their markets.
by John Keller | Aug 13, 2012 | Fuel Pricing Strategy, Industry News
US EIA reports gasoline fuel consumption increases in April and May over 2011.
In the US Energy Information Administration report “Today in Energy” dated August 13, 2012, the US EIA reported gasoline consumption was up slightly in April and May this year compared to last. Bucking the trend going on for years, April 2012 showed a one month consumption increase of 55 thousand bbl/d compared to 2011. May 2012 showed a consumption increase of 200 thousand bbl/d compared to the same month previous year.
U.S. gasoline consumption peaked in 2007 at 9.3 million bbl/d and fell by an average of 3.2% (300 thousand bbl/d) in 2008 due to the recession and high gasoline prices, which topped $4 per gallon in June and July 2008. Gasoline consumption remained flat the next two years, increasing by just 0.1% in 2009 and falling slightly in 2010. In 2011 gasoline consumption fell by 2.9% (260 thousand bbl/d) from the year before.
The first three months of this year, gasoline consumption averaged 124 thousand bbl/d lower compared to last year.
From a Fuel Price Management perspective, this data is critical for comparing overall market size fluctuations vs. differences year over year, and manipulating the gasoline pricing strategy for various markets.