by John Keller | Dec 16, 2011 | Fuel Price Management, Retail Fuel Margins
In the latest US Energy Information Administration’s Short-Term Energy Outlook report, the EIA projects lower fuels price averages for next year.
The EIA forecasts that the annual average regular-grade gasoline fuel retail price, which was $2.78 per gallon in 2010, will be $3.53 per gallon in 2011 and $3.45 per gallon in 2012. The EIA expects that on-highway diesel fuel retail prices, which averaged $2.99 per gallon in 2010, will average $3.85 per gallon in both 2011 and 2012.
From a fuels price management perspective, it looks like business as usual for 2012 with regard to fuel price trends.
by John Keller | Dec 9, 2011 | Fuel Price Management, Fuel Price Management Solutions, Industry News
GM announced their goal of selling 10,000 Chevy Volts this year is now a sales goal that is out of reach. With one month remaining in 2011, GM has sold only 6,100 Volts.
UPDATE: GM officially announces they’ll miss their 10,000 target by 38%.
From a fuels price management perspective, it’s more clear than ever that electric cars are not on a near-term path to have a significant impact on overall fuels volumes. Petroleum is clearly the on-going primary source of fuels volumes sold.
by John Keller | Dec 5, 2011 | Fuel Price Management, Fuel Price Management Solutions, Fuel Price Optimization, Fuel Pricing Strategy
A federal antitrust complaint is alleging that QuikTrip is setting their fuel prices below cost. Parker’s is another c-store chain that is fighting to keep their fuel prices aggressive. These allegations are part of the fuel pricing game for those who are fighting at the low end of the fuel price market.
When c-stores find themselves in these suits, the key to minimizing legal costs is to have access to a fuel price management system that maintains a complete audit trail of fuel prices and cost over time, down to the daily and even hourly level on a store by store basis. To prove innocence, it may be required to report both replacement and actual cost.
With the PriceAdvantage fuel price management system, these lawsuits are nothing to be afraid of.
by John Keller | Dec 5, 2011 | Industry News, Retail Fuel Margins
In a December 4 CNN article Trilby Lundberg of the Lundberg Survey said retail fuel margins are on a downward trend as a result of ongoing reduced fuel demand throughout the US market. From a fuel price management and c-store public relations perspective, these articles are positive in that they present a realistic picture to the consumer, bringing awareness to the public that higher fuel prices do not mean more profits for fuel retailers.
According to NACS Online, average US retail fuel margins were at $0.215 on December 2, down from $0.27 the previous Friday.
by John Keller | Dec 2, 2011 | Fuel Price Management, Fuel Pricing Strategy, Industry News
NACS Online reported today that after 30 years of not allowing credit card payments at the fuel pump, Arco will now allow customers to use credit cards. Arco will advertise cash and credit fuel pricing on their fuel price signs.
The change in the Arco fuel price management strategy has already begun in Seattle and is expected to spread to the remaining Arco stores throughout the US west of the Rockies.
Since 1982, Arco has only accepted cash, debit and gas cards. A return to credit cards by Arco could have a major impact on pump prices in western states where the company and Costco often vie for the title of lowest-priced fuel retailer in the market, experts say.
The NACS article continues: “There’s no telling what the landscape would be like as to price and volume rankings if Arco is going to accept credit cards market-wide, but such a decision will be the second massive game-changing move in three decades, by the same brand,” says petroleum marketing analyst Trilby Lundberg.
“Everyone, from Chevron to Costco, and of course consumers, would be affected if Arco dumps its ultra low-price strategy. Brand loyalty would be transformed in one way or another. Arco’s price personality may or may not be revolutionized, but it would be affected not only by its taking credit cards but by the reactions of its competitors,” Lundberg added.
The fuel price differential between Arco and Costco has shrunk dramatically over the years, causing speculation for the basis of this change in Arco’s fuel price management strategy.
Fuel Pricing Analysts will be watching each of their markets carefully to see the impact of this fuel price strategy change across their competitors, and the fuel volume and margin impact. No question this is a significant change to the fuel pricing landscape.
The full NACS article may be found here.
by John Keller | Dec 2, 2011 | Industry News
Fuels demand was lower again in October year over year. According to the American Petroleum Institute, and reported by NPNweb.com, motor fuels demand was down 0.3 percent in 2011 compared to 2010. API chief economist John Felmy blames the “disappointing consumer confidence”.
This is another data point indicator showing the competitive nature of the fuels pricing industry, where c-stores are chasing an ever diminishing fuel volume market, albeit slight this month.
