by John Keller | Oct 28, 2014 | Fuel Pricing Software, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
According to Lundberg Survey, Inc., unbranded rack prices are starting to rebound, and that means we may very well start to see the average retail fuel price start to bounce back up as well. Read more at CSP.net here.
The retail price of unleaded has fallen $.1818 over the past two weeks to $3.0759. That’s $0.65 per gallon lower than the peak price of 2014 on May 2, and the lowest price in four years.
If we see rack prices drop again, it will be because global supply continues its downward pressure. As always, eyes are on OPEC to see if they continue their recent strategy of strong sales at current competitive but profitable prices, ignoring requests from Venezuela to cut production levels so prices can increase to a level closer to what Venezuela needs to be profitable. The next OPEC meeting is November 26.
My guess is that prices settle at current levels, with perhaps a slight increase, until the OPEC meeting.
by John Keller | Oct 24, 2014 | Fuel Price Management, Fuel Software, Industry News, Retail Fuel Margins
The average retail fuel margin remained at the top level of the year this week, according to OPIS. The average retail fuel margin dipped $0.001 per gallon to $0.369 per gallon. That’s $0.175 per gallon higher than this week last year.
The year to date average inched upward again to hit $0.200 per gallon while the Q4 average broke $0.30 to hit $0.312 per gallon. The six week average is now $0.293 per gallon, the highest of the year.
We’re now counting down nine weeks until the end of the year. Last year, these nine weeks averaged $0.19 per gallon. Even if retail fuel margins go into a free fall through the end of this year, and there are no industry indications that we will, we’re still looking at what will likely be the best quarter of the year.
by John Keller | Oct 17, 2014 | Fuel Price Management, Fuel Pricing Technology, Industry News, Retail Fuel Margins
There has been so much press lately about the falling gas prices this season. Everywhere you turn, it seems, there’s another article explaining why gas prices are falling and predicting how much lower they’ll go.
The beautiful thing about falling gas prices for the fuel retailer is that margins are strongest when retail prices are falling. Nothing proves that point better than the OPIS report today. Retail fuel margins on average rose $0.076 per gallon, making it a $0.156 per gallon increase over two weeks. The average retail fuel margin across the US stands at $0.370 per gallon, the highest in two years. That increase helped the year to date retail fuel margin to rise to $0.196 and the Q4 average to hit $0.332 per gallon. The six week average is now $0.265 per gallon.
The retail fuel margin now stands $0.18 per gallon above last year at this time. Will fuel revenue numbers be impacted by these lower gas prices? Absolutely. Will fuel profits be helped by these margins? Absolutely! And that’s the number you can take to the bank, to fund investments, and to grow the business.
The way things are going, the last quarter of the year may have the strongest margins of the entire year. Of course volumes this quarter can never match the numbers of Q3 which include the peak driving season. But this quarter may be as much as $0.10 per average retail margin above the average in Q2. And that makes for a great way to finish off the year.
by John Keller | Oct 10, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
The OPIS report today revealed that the average retail fuel margin across the US had the largest weekly jump since January of this year. The average retail fuel margin increased $0.08 per gallon to $0.294 per gallon, the highest margin of 2014. The year to date average continued its gentle climb upward to $0.192 per gallon, the highest year to date average of this year. The six week average continued strong at $0.236 per gallon.
Last year at this time the average retail fuel margin was $0.236 per gallon, meaning we’re currently up $0.058 per gallon over last year.
As we approach the final 12 weeks of the year, it’s interesting to try to make predictions for how the year will end. When 2013 was done, the overall retail fuel margin finished at $0.190 per gallon. It took us until October to achieve that margin level, starting 2014 off at $0.112 per gallon, and clawing our way up to today. Last year the final weeks of the year had some up and down margin averages, but overall the weeks lost margin more often than they gained. Hopefully this year we can hold on to this margin level and maintain the $0.19 year to date average, and the six week average margins of $0.20 that we’ve been seeing since July.
by John Keller | Oct 3, 2014 | Fuel Price Management, Fuel Pricing Strategy, Industry News, PriceAdvantage, Retail Fuel Margins
The OPIS report today revealed the average retail fuel margin across the US dropped again this week, down $0.027 to $0.214 per gallon. The equivalent day in 2013 we had an average of $0.255. That makes the second consecutive week where retail fuel margins are lower than last year.
The year to date average is a solid $0.190 per gallon, and the six week average is $0.222 per gallon. The Q4 average in 2013 ended at $0.200 per gallon, so we’re starting the quarter above that number. However, 2013 began the fourth quarter at $0.255 so it lost $0.05 over the three month period. Let’s hope we can hold margins steady this year.
by John Keller | Oct 1, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
TravelCenters of America announced their second quarter financial results with the following highlights:
1) fuel gross margin was up $0.02 per gallon year over year from $0.172 to $0.192 per gallon
2) total gallons sold was down 4 million gallons to 517 million gallons of fuel
Lower fuel volumes were blamed on conservation efforts on the part of professional drivers and TA’s decision to avoid selling fuels that bring in lower margins. Additionally, TA warned that their customers continue to have improved fuel efficiency.
These results seem to be consistent with industry trends – fuel volumes continue downward, and the margins for this past quarter were quite strong. It will be interesting to compare these results to others in the industry as the coming weeks unfold.
