by John Keller | Feb 20, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
In early February I wrote a blog entry about how retail fuel margins in January 2014 were stronger than in January 2013. I based this conclusion using weekly OPIS reports from this year and last. You can find that blog entry here.
On February 20, Samantha Oller, Sr. Editor of CSPNet.com, wrote an article about a similar conclusion. Her article Fuel Margins Hit 7-Year High for January uses a research note by Raymond James & Associates. The research note shows that retail fuel margins in January 2014 averaged 18.5 cents per gallon (CPG) for regular unleaded, a 39% improvement year over year.
The OPIS weekly retail margin report uses a different approach than Raymond James & Associates. The Raymond James & Associates research is based solely on a survey of a select group of c-store chains and fuel distributors: Casey’s General Stores, CST Brands Inc., Murphy USA Inc., The Pantry Inc., Susser Holdings Corp., TravelCenters of America, Susser Petroleum and LeHigh Gas Partners. The other significant difference between the two reports is that OPIS reports the overall average of all fuels on a weekly basis, while Raymond James & Associates focuses only on regular unleaded and for the entire month of January.
Whether you use the Raymond James & Associates research, or the OPIS weekly reports as a baseline, this information is a good cross check comparison for your January margins.
by John Keller | Feb 14, 2014 | Industry News, Retail Fuel Margins
In the OPIS report this week, the US average retail fuel margin dropped another $0.032 per gallon to $0.146 per gallon. That’s a net loss of $0.046 per gallon from the most recent high three weeks ago back on January 24 when average retail margins stood at $0.192 per gallon. Current retail margins are at the second lowest level of the year, only slightly higher than on January 3 when they were at $0.112 per gallon.
The year to date average dropped to $0.169 per gallon, while the six week average was up slightly to $0.178 per gallon. This week last year retail fuel margin averages were at $0.122 per gallon.
Last year February margins bounced in the $0.08 – $0.12 range, jumping to $0.22 per gallon at the end of March. Hopefully we’ll see a repeat performance in 2014, and finish the quarter strong.
by John Keller | Feb 7, 2014 | Fuel Pricing Software, Industry News, Retail Fuel Margins
OPIS reported this week that the average retail fuels margin remained steady since last week. Retail fuel margins across the US averaged $0.178 per gallon, compared to $0.179 last week. The year to date average ticked up $0.001 per gallon to $0.173 and the six week average jumped $.007 per gallon to $0.173 per gallon.
Our industry is in much better shape retail fuels margin-wise this year than last year. Consider that the average retail fuels margin is now $0.089 per gallon higher than the $0.084 national average across the US in 2013. That means retail fuel margins in the US are now double what they were this week last year.
According to the 2013 NACS Fuels Report, the industry switch over process from winter blend fuels to summer blend fuels begins in February, beginning with scheduled refinery shutdowns for maintenance. And that means an increase in wholesale cost to the fuels retailer, a cost increase that is not easily welcomed by the consumer. And that puts the squeeze on margins this time of year. Add all that up, and we can anticipate an increasingly competitive market for the rest of Q1, with difficult fuel margins, possibly in the negative range.
In 2013 we saw this trend where average retail fuel margins dropped one cent from February 1 to February 22, ending the month at $0.102 per gallon. That’s negative margin territory for many fuel retailers. Luckily this year our higher margin levels should keep us in positive territory, though that doesn’t mean we can rest easy in these coming weeks.
by John Keller | Feb 3, 2014 | Fuel Price Management, Fuel Software, Industry News, Retail Fuel Margins
According to the OPIS US retail fuel margins data, January 2014 was much stronger than January 2013. And for many retailers, that may mean the difference between making money and losing money on fuels.
The average retail fuel margins for January this year were $0.172 per gallon compared to $0.148 per gallon last year, a difference of $.024 per gallon.
That may not seem like a big difference, but according to the 2014 NACS Fuels Report, on average, it costs a retailer about 12 to 16 cents to sell a gallon of gasoline. That means the difference between retail fuel margin averages in January this year and last year is the difference between profit and loss. Such is the life of the retail fuels manager: always dancing on that fuels margin razor’s edge between making money and losing money on the largest product category in the c-store industry.
The retail fuels business truly is a game of pennies, or even fractions of a penny. But in order to stay in business, it’s not just a game, it’s a war game, requiring the best possible toolsets and processes to squeeze every fraction of a cent out of every gallon, every day, at every store.
Don’t just take our word for it – listen to what NACS has to say: “Over the course of a year, retail profits (or even losses) on fuels can vary wildly. In some cases, a few great weeks can make up for an otherwise dreadful year — or vice versa.”
Does your retail fuels software allow you to quickly compare store and market performance to these national benchmarks? Does your retail fuels software allow you to quickly make adjustments to execute the optimized price at every store, at every location, every hour of every day? If it doesn’t, that’s OK, it simply means you’re not using PriceAdvantage. And if you’re not using PriceAdvantage, you’re not equipping yourself with the best technology available on the market. And that means you’re simply operating at a competitive disadvantage in this game of war.
by John Keller | Jan 31, 2014 | Industry News, Retail Fuel Margins
According to today’s OPIS report, the average retail fuels margin across the US dropped just over a penny this week to $0.179 per gallon. That reflects a margin drop of $0.013 per gallon from last week, and more than offsets the gains the c-store industry saw a week ago.
The year to date retail fuels margin average across the US remains at $0.172 per gallon, while the six week average dropped to $0.166 per gallon. The same day last year retail fuel margins were $0.112 gallon.
In 2013, we saw a three week consecutive margin drop at this time, bottoming out at $0.084 per gallon on February 7, 2013. Let’s hope we don’t repeat that trend this year.
by John Keller | Jan 24, 2014 | Industry News, Retail Fuel Margins
OPIS reported the average retail fuel margin across the United States increased $0.01 per gallon this week to $0.192 per gallon. The one cent gain erased the loss of last week. Average year to date retail fuel margins continued to rise, hitting a mark of $0.170 per gallon. The six week retail fuel margin average held steady at $0.173 per gallon.
Last year on the equivalent of this date, average retail fuel margins were $0.02 cents per gallon lower, at $0.15 per gallon.
Hopefully 2014 won’t see the dramatic retail fuel margin drops we saw in 2013, when the average retail fuel margin dropped to $0.102 per gallon over the course of the equivalent next four weeks.
