by John Keller | Aug 3, 2010 | Fuel Price Management, Industry News
Crude oil today is trading $2 higher than yesterday at $81.34/bbl. Sweet crude futures for delivery in September traded at $81.43 a barrel early today. The price increase is attributed to the dollar weakening broadly, and to tropical storm Colin. Additionally, weekly inventory data is expected to show crude oil stockpiles in the United States fell last week.
Some analysts are now looking for crude to hit $87/bbl in 2010. There are 42 gal of oil in a barrel, and it takes between 1.5 and 2 gal of oil to make a gal of gas, depending on the refining process and type of oil.
by John Keller | Jul 28, 2010 | Fuel Price Management, Fuel Price Management Solutions, Fuel Price Optimization, Fuel Pricing Strategy, Industry News
These are good days to be in the retail fuel business. Valero announced in their Q2 results that their retail fuel operations segment had a record-setting performance with $109 million in operating income. These are the best second quarter results in Valero’s history. Valero reported their success is due to strong fuel margins at its gas stations and convenience stores.
A Fuel Executive for one of our PriceAdvantage customers reports they are up $2.4M so far this year. Other PriceAdvantage customers report recent months are some of the strongest ever.
In times like these, what do companies do to keep the momentum going? BJ’s Wholesale and High’s Dairy are investing in Fuel Price Management solutions from Skyline Products to automate their fuel pricing process to further improve speed to the street, and to maximize their fuel margins and profits. Shrewd companies like BJ’s and High’s recognize that using these strong profits to further optimize their fuel pricing strategies and to improve pricing efficiency is the way to make the most of these times of plenty.
by John Keller | Jul 22, 2010 | Fuel Price Management, Fuel Price Optimization, Industry News, Retail Fuel Margins
According to the US Energy Information Administration report issued July 21, the U.S. average price for regular gasoline fuel was, in essence, unchanged at $2.72 per gallon, $0.26 higher than last year. On a regional basis, price changes were mixed with the East Coast average dropping a penny to $2.65 per gallon. The Gulf Coast fell less than a cent to remain at $2.56 per gallon. The average in the Rocky Mountains moved up about a penny to $2.75 per gallon. Prices in the Midwest and on the West Coast increased about two cents to settle at $2.70 per gallon and $3.06 per gallon, respectively. The average in California went up nearly two cents to $3.13 per gallon.
The national average price for diesel fuel decreased for a fourth consecutive week. However, the price dropped less than half a cent and, consequently, remained essentially unchanged at $2.90 per gallon but was $0.40 above a year ago. Despite increasing by small fractions of a cent, the average prices in the Midwest and on the Gulf Coast were effectively unchanged at $2.87 per gallon and $2.86 per gallon, respectively. Prices on the East Coast and in the Rocky Mountains slipped a penny to $2.91 per gallon and $2.90 per gallon, respectively. The largest decline took place on the West Coast, where the average dipped a penny and a half to $3.04 per gallon. The average in California slipped less than a cent to stay at $3.12 per gallon.
by John Keller | Jul 8, 2010 | Fuel Price Management, Fuel Price Optimization, Retail Fuel Margins
According to the US Energy Information Administration report issued July 8, the U.S. average fuel prices dropped for the first time in three weeks. The price for regular gasoline fell three cents to $2.73 per gallon. The national average was $0.11 higher than last year.
Regionally, average fuel pricing slipped in all sections of the country. The averages on the East Coast and on the Gulf Coast dropped about three cents each to $2.67 per gallon and $2.58 per gallon, respectively. The largest drop took place in the Midwest where the average slumped more than a nickel to $2.68 per gallon. The average in the Rocky Mountains declined a penny to $2.76 per gallon. The West Coast price slipped half a cent to settle at $3.05 per gallon and the average in California fell a penny to $3.12 per gallon.
by John Keller | Jul 2, 2010 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
July 1, 2010 – According to the latest edition of the US Energy Information Administration’s “This week in petroleum” report, the average retail fuel price for regular gasoline rose for the second straight week as of June 28th. Current retail gasoline prices are above their year-ago level, but lower than prices during the same period in 2008, 2007, and 2006.
For the second week in a row, the U.S. average fuel price for regular gasoline increased, moving up more than a penny to settle at $2.76 per gallon, $0.12 higher than last year. With the exception of the Rocky Mountains, average fuel prices increased in all other regions of the country. The average on the East Coast went up a penny to $2.70 per gallon. The increases in the Midwest and on the Gulf Coast amounted to a bit less than two cents, taking the prices to $2.73 per gallon and $2.61 per gallon, respectively. The Rocky Mountain price slipped a half cent but remained essentially unchanged at $2.77 per gallon. The West Coast average climbed the most of any major region, moving up over two cents to $3.06 per gallon. The average in California moved up nearly three cents to $3.13 per gallon.
From the supplier point of view, the US EIA expects gasoline retail fuel margins to remain moderate, with gasoline demand showing slight growth in 2010. This implies that retail prices are likely to average under $3 per gallon this summer barring unexpected events.
by John Keller | Jul 2, 2010 | Fuel Price Management, Retail Fuel Margins
OPIS reported today that for the first half of 2010, retail fuel margins across all US operators, including c-stores, were the best in many years. Oil prices stumbled, while demand at the pump held steady. Retail fuel margins from January to June 2010 were at the highest levels in 10 years.
The average gross retail fuel margin was at 16.9 cents per gallon. That’s a 64% increase over 2009. Some specific fuel retailers have reportedly doubled their retail fuel margins so far this year. Even the wholesale membership clubs of BJ’s, Costco and Sam’s Club have reported positive retail fuel margins this year. In previous years these wholesale retailers have sold fuel as a low price leader, sometimes at negative margins.
Perhaps it is these retail fuel margins that have attracted the attention of Green Equity Investors, the private equity firm who purchased roughly 10% of BJ’s stock on July 1, with an intent to discuss options for improving shareholder value. BJ’s stock closed 18% higher that day.
And with the beginning of the second half of the year seeing the barrel of crude trading at $6 under the previous month, these retail fuel margins are likely to continue into the summer.
These numbers reinforce the critically important role the Fuel Manager plays in contributing profits to the company. By carefully monitoring the fuel pricing strategy at each location, Fuel Managers can optimize their prices at each store, and keep these retail fuel margins strong. Now is the time to invest in a robust fuel pricing software application such as PriceAdvantage to continue this trend through the rest of 2010 and into the future. Fuel pricing software allows the Fuel Manager to make these retail fuel margins the new norm.
