by John Keller | Nov 22, 2010 | Fuel Pricing Technology, Industry News
According to an MSNBC article posted today, utilities companies in several parts of California, North Carolina and Texas are bracing for increased demand for electricity brought on by the popularity of electric vehicles in specific markets. Fuel Pricing Managers in these markets would be wise to keep a close watch on the growth of electric vehicles in their area, since electric vehicles are likely to have an impact on fuel pricing strategies as the overall fuel market ultimately shrinks in these areas.
Electric vehicle clusters are expected in neighborhoods where:
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- Generous subsidies are offered by states and localities
- Weather is mild, because batteries tend to perform better in warmer climates
- High-income and environmentally conscious commuters live
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The article goes on to name the specific cities of Santa Monica, Santa Barbara and Monrovia in California as likely electric vehicle clusters. Other likely electric vehicle clusters are Charlotte, Raleigh, Cary and Asheville, North Carolina; Orlando and Tampa, Florida; Indianapolis, Indiana; and Austin, Texas.
The increased demand is analogous to the advent of air conditioners in the 1950’s and 60’s, and utilities companies are doing their best to be ready. “Electric vehicles have the potential to completely transform our business,” says David Owens, executive vice president of the Edison Electric Institute, a trade group.
But many expect a bumpy road at first. Transformers that distribute power from the electrical grid to homes are often designed to handle fewer than a dozen. Extra stress on a transformer from one or two electric vehicles could cause it to overheat and fail, knocking out power to the block.
The “nightmare” scenario, according to Austin Energy’s Rabago: People come home from work on a hot afternoon, turn on the air conditioner and the plasma television, blend some frozen cocktail, start cooking dinner on an electric stove —and plug their car into a home charging station. Auto executives say it’s inevitable that utilities will experience some difficulties early on. “We are all going to be a lot smarter two years from now,” says Mark Perry, director of product planning for Nissan North America.
“It’s like you’re about to have a baby,” says Duke Energy’s Rowand. “You know it’s going to be good, but you also know there’s going to be some throw up and some dirty diapers, and you just hope that it’s something you are prepared for.”
Read the entire article here.
by John Keller | Nov 19, 2010 | Industry News, Retail Fuel Margins
Retail fuel margins were a key factor in the financial results reported by TravelCenters of America for the three months ended September 30, 2010. Highlights of the report:
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- Total retail fuel sales were approximately $1.193 billion across 229 sites. That calculates to an average retail fuel sales per site of approximately $5.209 million, or $1.736 million per site per month.
- Same site retail fuel sales volume increased 5.6% over Q3 of 2009.
- Total gross retail fuel margins were $74.6 million, which is $14.2 million higher for the third quarter of 2010 than the third quarter of 2009.
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The report doesn’t explicitly list the retail fuel margins per gallon, but if average fuel prices were in the $3/gallon range, that would equate to a $.17 to $.18 margin per gallon.
The report listed one primary reason for the improved retail fuel margins as being a greater number of days of declining fuel commodity prices throughout the third quarter of 2010, as compared to the same quarter of the prior year. “Although other factors have an effect, retail fuel margins per gallon tend to be lower during periods of rising fuel prices and higher during periods of falling fuel prices” the report said.
by John Keller | Nov 10, 2010 | Fuel Price Management, Industry News
In the November 9, 2011 edition of the US Energy Information Administration’s Short-Term Energy Outlook report, the US government predicts unleaded retail prices to average $2.84/gallon this winter. That’s $.19 per gallon higher than last winter. This prediction is based on a model where West Texas Intermediate crude oil averages $83 per barrel. That’s a $5.50 per barrel increase over last winter. The model includes a 2010 forecasted growth in the US gross domestic product of 2.6%, and 2.2% growth in 2011. World oil consumption is predicted to grow 3.9% in 2010 and 3.3% in 2011.
If the US EIA’s predictions prove to be correct, unleaded retail fuel price averages will be $.02 less than they are as of the week of November 8, 2010.
by John Keller | Oct 19, 2010 | Fuel Price Management, Fuel Pricing Strategy, Industry News
A recent article in the Wall Street Journal quotes Xavier Mosquet, Sr. Director and Managing Partner (Detroit) of Boston Consulting Group, as saying fuel prices must be at $8 to $9 per gallon before electric cars will be cost effective for buyers. This takes into consideration the lack of US government incentives that can’t go on forever. Mr. Mosquet goes on to say that a fuel price of $4 per gallon, with current government incentives, will support electric car sales representing only 5% of the market by 2020.
So why the big push for electric vehicles from auto makers?
- US EPA credits that allow manufacturers to build more profitable luxury cars and trucks.
- California mandates that the top six car manufacturers offer a zero emission model in 2012 or pay severe fines.
As Fuel Managers peer over the horizon to see when electric vehicles should be folded into their fuel pricing strategy, a wait and see attitude may be best for the next five years so as not to get distracted from the core business.
The entire WSJ article is worth reading here.
by John Keller | Oct 13, 2010 | Fuel Pricing Technology, Industry News
Recently three different retailers have announced they’ll be offering charging stations for electric cars. Two of the three are traditional fuel retailers: BP/Arco, and Murphy. The third retailer to announce the charging stations is Best Buy.
BP announced they’ll install 45 high-voltage chargers at various BP/Arco gas stations in Arizona, California, Oregon, Washington and Tennessee. These sites are in cities and states that are part of the federally supported Electric Vehicle project, managed by the charging company ECOtality. The Electric Vehicle Project is operating with a $114.8m grant from the US Department of Energy to install 1100 public recharging stations over a three year period. Installation of these chargers at BP/Arco stations is scheduled to begin in March 2011.
Murphy Oil USA announced they will demonstrate a fast charger station at one of their retail fuel stores in Tennessee. Murphy is working with Eaton Corporation to use the Tennessee store as an initial test of the quick charger before looking at expanding their reach to Murphy’s other 1000 locations.
The current expectation is that the BP/Arco stations will charge a set dollar amount for two to three minute increments. Their fast chargers will be able to give an electric car 12 to 15 miles worth of power every five minutes. That means their chargers will be able to recharge the Nissan Leaf in 26 minutes.
Best Buy will offer lower volt charging stations at their stores, where it will take one hour’s worth of charging to provide the same 12 to 15 miles worth of power. Best Buy is considering offering the charging stations through a club membership or frequent-purchaser program.
by John Keller | Oct 12, 2010 | Fuel Price Management, Fuel Pricing Strategy, Industry News
In today’s US Energy Information Administration release of the latest weekly retail fuel prices, the average national price for all grades rose more than $.08 per gallon from the previous week. That’s the largest price increase in over six weeks.
The average national price of regular unleaded fuel rose from $2.73 to $2.81. Regional unleaded fuel prices ranged from a weekly increase of $.11 per gallon in the Central Atlantic states, to $.10 per gallon in New England, to $.06 per gallon on the West Coast. All regions of the country saw prices increase with the exception of the Rocky Mountains, which remained essentially unchanged at $2.79 per gallon.
Particularly hard hit was the city of Cleveland, which saw an increase of $.14 per gallon to $2.86. Across the country, the most expensive local averages for Unleaded was in San Francisco, with a price of $3.12 per gallon, up from $3.04 the week before. The lowest local averages for Unleaded were reported in Houston at $2.64, up $.08 from the previous week.
