by John Keller | Aug 10, 2011 | Fuel Price Management, Fuel Price Management Solutions, Fuel Pricing Strategy, Industry News
Fuel Price Managers should base their fuel pricing strategies on the general consensus that retail gas prices will continue to drop through the rest of 2011.
USA Today picked up a story from the New York Times, proclaiming that gasoline prices are sure to continue to drop. The article predicts that next month, the national average for Regular Unleaded could drop to $3.25/gallon. That would be over $.40/gallon less than today’s national average. A spokesman from NUS Consulting, the often quoted specialist firm in energy sourcing, risk management and sustainability, was quoted as predicting that crude will fall from today’s price of $82 to between $55 and $60 before finishing the year at $70.
UPDATE 8/12/11 The Los Angeles Times published an article saying “motorists should see pump prices drop as much as 50 cents a gallon over the next several weeks…”.
Today’s US Energy Information Administration Short-Term Energy Outlook projects Unleaded fuel price national averages to drop $.09/gallon in the 3rd quarter of this year and reach $3.58/gallon; predictions for the 4th quarter include an additional $.14/gallon drop to reach $3.44/gallon. That’s about $.06/gallon lower than what the US EIA published last month. On August 8th, the US EIA announced the national average for Unleaded was $3.67/gallon, a $.04 drop from the previous week.
Fuel Price Management strategies should include consumer expectations that fuel prices will fall.
by John Keller | Aug 8, 2011 | Industry News
In today’s US Energy Information Adminstration weekly fuel price report, the USEIA revealed a $.04 drop for the national average price of Unleaded Regular fuel. The US national average retail fuel price of unleaded gasoline now sits at $3.67/gallon, a gallon of midgrade dropped to $3.79, and a gallon of premium dropped to $3.92.
All regional areas saw fuel price decreases except for the Rocky Mountains, who saw a $.01 increase. The Gulf Coast and the Midwest each saw a $.05 decrease.
As for individual states, Minnesota had the largest fuel price decrease of the week, where prices lowered $.09/gallon for unleaded, with an average price of $3.73/gallon. All states now have Unleaded averages under $4.00 for the first time in two weeks.
The highest average price in the nation for Unleaded continues to be in New York, at $3.99/gallon. In Chicago, a gallon of Unleaded is priced the highest in any major city, at $3.96 per gallon which is $.05 less than last week.
by John Keller | Jul 27, 2011 | Fuel Price Management, Fuel Price Management Solutions, Fuel Price Optimization, Retail Fuel Margins
Valero Energy in their quarterly report announced that US retail fuel margins for the past three months were $.204 per gallon. That’s an increase of nearly $.02 compared to the same time period last year.
For the six months ended June 30, retail fuel margins were $.142 per gallon, essentially unchanged compared to $.148 for the same six months the previous year.
For the three months ended June 30, Valero retail sales in the US were 5,094 gallons per day per site (154,518 gallons per month per site), down 2% from 5,196 gallons per day per site the previous year. For the six months ended June 30, Valero retail sales in the US were down 1.5% from the previous year, with 2011 sales reaching 4,995 gallons per day per site (151,515 gallons per month per site) compared to 5,070 gallons per day per site for the same period in 2010.
According to NACS, the average US c-store sells 121,000 gallons of fuel per month annually. That means over the past three months, Valero stores sold about 27% more than the US national monthly average.
According to Valero’s press release, “Valero’s retail segment continued its record-setting performance with $135 million in operating income, which was the best second quarter in Valero’s history. The increase in operating income was mainly due to higher retail fuel margins….”
Clearly Valero is tremendously successful with their retail fuel price management solutions.
Valero has nearly 1000 company operated stores in the US.
by John Keller | Jul 19, 2011 | Industry News, Retail Fuel Margins
Alimentation Couche-Tard Inc. in their quarterly report announced that US retail fuel margins for the past three months were $.14 per gallon. That’s a decrease of 1.2% compared to the same time period last year.
For the 12 months ended April 25, retail fuel margins were $.1579 per gallon, up from $.1451 for the same 12 months the previous year.
For the three months ended April 25, Couche-Tard retail sales in the US were approximately 145,000 gallons per month per site. Same-store US motor fuel volume was up .3% for the quarter.
According to NACS, the average US c-store sells 121,000 gallons of fuel per month annually. That means over the past three months, Couche-Tard stores sold about 20% more than the US national monthly average.
Couche-Tard currently has a total store count of 5795.
by John Keller | Jul 18, 2011 | Fuel Price Management, Fuel Price Management Solutions, Fuel Pricing Strategy, Industry News
Walmart joined the retail fuel price loyalty game this summer, partnering with Murphy Oil to offer $.10 discounts on fuel when the purchase is made using one of the Walmart payment cards. Loyalty reward incentives are becoming mainstream across retail fuel c-stores and grocery store chains.
So the question is, how can the fuel manager compete? The answer lies in understanding the fuel pricing strategy at Murphy.
Murphy focuses their fuel price management solution around the urgency of fuel price changes. At Murphy, the fuel price strategy is a volume game. Murphy uses price as their number 1 advertising, as their billboard. Murphy advertises their price on enormous gas price signs, projecting such confidence that the consumer believes Murphy must have a low price since the sign is so bold. Murphy has reached such operational efficiencies in the fuel price change process, they can react extremely quickly to hourly wholesale price fluctuations. Murphy routinely changes fuel prices 2-3 times per day to squeak out the highest possible volume and profit hour by hour, based on these hourly wholesale price fluctuations. Speed to the street wins. When wholesale prices go up, retail price changes can happen almost immediately. When wholesale prices go down, Murphy can make it very difficult on the stores around them by dropping retail prices right away. Murphy sells such high volumes of fuel, the difference of a fraction of a penny, multiplied out times every gallon sold across their enterprise, yields huge profits.
The only way to compete against Murphy is to implement a fuel price management solution that watches Murphy prices like a hawk. Subscribe to the OPIS Radius report and get pricing feeds througout the day. Track every Murphy price move by allowing store and territory managers in the field to quickly report new Murphy prices to headquarters, or better yet, empower these managers to use their mobile device to change prices immediately when Murphy moves. Then the fuel manager can know what’s happening in the field in real time, and analyze store performance in terms of my price vs. competitor price, and gallons sold as compared to the same day of the previous four weeks. With this fuel price management solution, fuel managers can quickly make adjustments to their Murphy competitor strategy, and maintain the strategy that makes sense, whether it is matching Murphy, or staying within the price differential that the market will bear.
by John Keller | Jul 18, 2011 | Fuel Pricing Strategy, Industry News
In today’s US Energy Information Adminstration weekly fuel price report, the USEIA revealed a $.04 increase for the national average price of Unleaded Regular fuel. That’s an $.11 increase over the past two weeks. The US national average retail fuel price of unleaded gasoline now sits at $3.68/gallon, a gallon of midgrade rose to $3.79, and a gallon of premium rose to $3.93. These prices now reflect levels not seen since mid-June.
The regional area hit hardest was the Lower Atlantic, where the average price for unleaded rose $.07 to $3.72/gallon. The region with the lowest increase was the “West Coast Less California” region, where prices were unchanged from last week, remaining at $3.69.
As for individual states, Texas had the largest fuel price increase of the week, where prices rose $.08/gallon for unleaded, with an average price of $3.65/gallon.
The highest average price in the nation for Unleaded is now in New York, up $.06 reaching $3.97/gallon. In Chicago, a gallon of Unleaded is priced the highest in any major city, at $4.02 per gallon.
