by John Keller | Mar 6, 2012 | Fuel Price Management, Fuel Price Management Solutions
The Governor of Massachusetts has directed state inspectors to intensify searches for fuel price gouging, according to the Boston Globe. Barbara Anthony, the Massachusetts undersecretary of consumer affairs and business regulation, said the state wants to make sure “no one’s even thinking about price-gouging.” Ms. Anthony has assigned more inspectors to audit gas stations.
The inspectors will also check for fuel price discrepancies between sign and pump, where signs are advertising a lower price.
From a fuel price management perspective, it’s critical for Massachusetts c-stores to make sure fuel price changes go through properly, pricing the sign in line with the pump, sign first when prices go up, pump first when prices go down. The PriceAdvantage fuel pricing software solution maintains the correct sequence for fuel price increases and decreases, in order to maintain legal pricing. The PriceAdvantage solution also provides a complete audit trail of retail store and competitor fuel prices, cost, and margin (both actual and replacement), on a daily basis. This makes it quick to respond to auditors who make accusations of fuel price gouging.
by John Keller | Mar 6, 2012 | Fuel Pricing Strategy, Retail Fuel Margins
The US Energy Information Administration reported their Short-Term Energy Outlook report today, and the administration expects regular‐grade retail fuel prices to average $3.79 per gallon in 2012 and $3.72 per gallon in 2013, compared with $3.53 per gallon in 2011. During the April through September summer driving season this year, prices are forecast to average about $3.92 per gallon with a peak monthly average price of $3.96 per gallon in May.
The value of futures and options contracts imply a 2 percent probability there will be a monthly average regular-grade fuel retail price of approximately $5.00 per gallon.
From a fuel price management perspective, if history repeats itself, these fuel price averages will have a high impact on fuel volumes, causing a significant decline in fuel volumes in 2012 and 2013.
by John Keller | Mar 6, 2012 | Fuel Price Management, Retail Fuel Margins
NACS held a media briefing on gas prices and one of the highlights was their report on the average retail fuel mark-up thus far in 2012. For the past six years going back to 2006, the retail fuel mark-up as a percent of price was between 5.1% and 6.0%. So far in 2012, the retail fuel mark-up has been only 3.8%.
It’s a well known industry fact that as retail fuel prices increase, c-stores suffer from low retail fuel margins. The long suffering fuel price increases so far in 2012 have been rough on retail fuel margins across the US. Couple the low margins with the continued trend of lowering fuel volumes, and certainly the c-store retail fuel business is not for the faint of heart.
As the retail fuel business continues to be more and more competitive, expect to see continued consolidation, where those who have invested in fuel price management systems are the only ones who are able to survive.
by John Keller | Mar 5, 2012 | Fuel Price Management Solutions, Fuel Price Optimization
In the US Energy Information Administration “Today’s Gasoline Prices” report released today, unleaded fuel prices in the Rocky Mountain region rose $0.14 per gallon, the highest of any region in the country. In two weeks, that’s a $0.24 per gallon increase in fuel prices for the Rocky Mountains.
The next highest fuel price increase for the week was $0.12 per gallon in the Midwest. Third highest increase was $0.08 per gallon in the “West Coast less CA” region. Overall, the US average unleaded fuel price increased $0.07 to $3.793.
by John Keller | Feb 22, 2012 | Industry News
The Federal Highway Administration reported that in 2011 Americans drove 35.7 billion miles fewer than in 2010. That’s a decline of 1.2%. The first half of 2011 showed a 1% decline, while the second half showed a 1.4% decline.
From a fuel price management perspective, the decline in miles driven helps explain the overall decline in fuel gallons sold. On a national level, the market for fuel continues to be more and more competitive. Fuel pricing strategies need to be a key focus in order to maintain optimized profits at each store and across all markets.
by John Keller | Feb 21, 2012 | Fuel Price Management, Industry News
According to the latest US Energy Information Administration report, the Rocky Mountain fuel prices remain the lowest in the US, $0.37 lower than the next lowest region.
Average unleaded fuel prices in the Rocky Mountain region are at $3.097 while in the Midwest region, average unleaded fuel prices are $3.464. Average unleaded fuel prices in the West Coast region are at $3.896.
