by John Keller | Jul 1, 2010 | Fuel Price Management, Fuel Price Optimization, Retail Fuel Margins
Associated Press reports BP will begin reimbursing their dealers with fuel rebates of $.01-.02 per gallon purchased at terminals to help offset the decline in fuel sales reported by many BP dealers after the gulf oil spill began. BP says the rebate money may be used however the dealers wish. While some may use the money to help cover lost sales since April, others may pass on the rebate directly to a fuel price reduction at the pump.
Given that studies have shown people will drive miles out of their way to save a few cents per gallon on fuel, I would expect most dealers will use this money to lower their fuel prices.
by John Keller | Jun 14, 2010 | Fuel Price Management, Fuel Price Management Solutions, Fuel Price Optimization, Fuel Pricing Software, Fuel Pricing Technology
This weekend I decided to fill up my car at the local c-store down the street. The advertised fuel price was $2.59, a few cents higher than the store a mile away, but since I was in a hurry, I figured it was worth the time saved. Plus I knew I’d get the $.03 per gallon grocery store reward discount. I entered in my phone number and zip code at the pump, and noticed the price per gallon dropped to $2.52. I eagerly filled my tank, recognizing what a good deal I was getting, and wondering if maybe I was taking advantage of a system breakdown. When I was finished, I drove past the other pumps to see what price they were set to. Sure enough, all the pumps were $.04 less than the advertised price on the sign, and with my $.03 per gallon rewards discount, that explained the $2.52.
It occurred to me how much more business the store could be generating if they brought their price signs in line with their pumps, and let everyone know they had the best fuel prices in town. Or if they chose to, they could raise their pump prices to accurately reflect the advertised price on the sign.
Thankfully, with electronic sign and fuel pricing software solutions from Skyline Products, these scenarios are easily avoided. PriceAdvantage fuel pricing software makes it easy to price your electronic price signs in line with your pumps and POS systems. Whether you’re using VeriFone, Radiant, or Gilbarco POS systems, it’s easy to make sure they stay in synch with your fuel price signs and pumps. And that’s the way to make the most of your fuel pricing strategy.
by John Keller | Jun 9, 2010 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Retail Fuel Margins
In the June 8, 2010 edition of the US Energy Information Administration’s monthly “Short-Term Energy Outlook”, the EIA revised their forecast for summer unleaded retail fuel price national averages down $.15 per gallon. The EIA now projects the national average fuel price for unleaded will be $2.79 per gallon for the summer 2010 driving season that lasts through September 30. The summer gasoline price forecast is down primarily as a result of the lower crude oil price forecast. The average price in the summer of 2009 was $2.44 per gallon.
This downward projection is despite the estimates of reductions in production resulting from a 6-month deepwater drilling moratorium announced by Secretary Salazar in May. The reductions in crude oil production resulting from the moratorium are estimated to average about 26,000 barrels per day (bbl/d) in the fourth quarter of 2010 and roughly 70,000 bbl/d in 2011.
EIA projects crude oil prices will average about $79 per barrel over the second half of this year and rise to $84 by the end of next year.
EIA projects that OPEC, which did not change its production targets at its March meeting, will keep its crude oil production largely unchanged for the remainder of 2010. The countries that have the bulk of OPEC ‘s spare capacity – Saudi Arabia, Kuwait, and the United Arab Emirates – have maintained their quota discipline at current levels for an extended period and are expected to continue doing so barring significant changes in the world oil market outlook.
by John Keller | Jun 9, 2010 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Industry News
Today the US Energy Information Administration announced that US national average fuel prices were essentially unchanged this week. In their “This Week In Petroleum” report, the EIA announced that fuel price increases in the Midwest and on the West Coast offset price decreases in the East, Gulf Coast, and Rocky Mountains.
This week US national averages dipped less than half a cent, remaining essentially unchanged at $2.73 per gallon. The price was a dime higher than last year at this time. Price changes were mixed, with the East Coast seeing the largest regional decrease, of nearly four cents, to $2.69 per gallon. The averages on the Gulf Coast and in the Rocky Mountains declined about three cents to $2.61 per gallon and $2.79 per gallon, respectively. Moving up three and a half cents, the average in the Midwest reached $2.66 per gallon. The West Coast price rose three cents to $3.01 per gallon, while the average in California increased over four cents to settle at $3.07 per gallon.
Now we all wait to see the what impact hurricane season will have on fuel prices this summer. August and September are typically the most common for hurricanes in the US. In 2008 fuel prices were impacted dramatically by hurricanes, and according to EIA software simulations, the likelihood of experiencing disruptions similar to the 2008 hurricane season (outages of 65 million barrels) or worse is estimated to be 17 percent during the upcoming season, which is quite a bit higher than the probability expected during a normal season (5 percent).
by John Keller | Jun 3, 2010 | Fuel Price Management, Fuel Price Optimization, Industry News, Retail Fuel Margins
In today’s edition of the US Energy Information Administration’s “This Week In Petroleum” report, the US EIA reported a drop in US average fuel prices for the third consecutive week. The cumulative drop across the country for these three weeks is almost $.18 for regular unleaded, which now averages $2.72 per gallon.
This week regular unleaded fuel dropped $.06 on average, which is still priced $.20 per gallon higher than last year at this time. Prices dropped in all regions of the country, with the East Coast and Midwest dropping the most at $.07 per gallon. On the West Coast, fuel prices dropped $.03 bringing the average to $2.98. The last time averages were below $3.00 on the West Coast was back in March 2010. California averages also dropped $.03 but still remained above $3.00 with an average price of $3.02 per gallon.
by John Keller | May 20, 2010 | Fuel Price Management, Retail Fuel Margins
As reported in CSP News, the latest Lundberg survey of 5000 US gas stations determined that over the past two weeks, the average price of fuel decreased $.42 per gallon. With the price of crude oil increasing $.20 per barrel over that same time period, retail fuel margins shrank by 2.16 cents per gallon.
So far this year, the combined retail fuel margin of all three grades of gasoline stands at 11.51 cents per gallon, just one tenth of one cent below the retail fuel margins of 2009.
Such razor thin retail fuel margins continue to reinforce the urgency to manage fuel prices, volumes, and margins with a robust Fuel Pricing Software system. These systems provide the strategic capabilities and speed to the street beyond those provided by simple homegrown Excel systems built for fuel price management.
