by John Keller | Mar 15, 2013 | Fuel Price Management Solutions, Fuel Price Optimization, Retail Fuel Margins
In the weekly OPIS report, average US retail fuel margins showed a drop of $0.043 per gallon. That’s a reverse in the trend across the previous two weeks where retail fuel margins increased nearly $0.16 per gallon.
Retail fuel margins now stand at $0.218 per gallon across the US, the second highest of the year, and at levels last seen in November 2012.
So far this year the average US retail fuel margin for all commodities is $0.151 per gallon. This provides a good comparison baseline when we review upcoming quarterly financial announcements from the large c-store chains.
by John Keller | Mar 12, 2013 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Fuel Pricing Technology, Retail Fuel Margins
In their Short-Term Energy Outlook report released today, the US Energy Information Administration issued a revised lower forecast for US gasoline consumption over the next two years. The report includes predictions for US gasoline consumption across each quarter in 2013 and 2014, and in every quarter the revised forecast is .2% to .8% lower than the US EIA predictions from their previous Short-Term Energy Outlook report.
The US EIA reports that fuel volume totals for the years 2012, 2013 and 2014 will remain essentially unchanged, explaining that increased travel will be offset by increased fuel efficiency.
From a fuel price management perspective, the news is not as bad as it could be; while fuel volumes have been in a steady decline for the past eight years, at least total anticipated fuel volumes are not expected to decline over this year and next.
The fuel pricing strategy and fuel price optimization game intensifies each year as c-stores battle for an ever-shrinking fuel volume pie. PriceAdvantage fuel pricing software is the key to optimizing both volumes and margins in this battle.
by John Keller | Mar 11, 2013 | Fuel Pricing Strategy, Retail Fuel Margins
This week’s OPIS report showed a $0.097 per gallon jump in retail fuel margins across the US, the largest weekly fuel margin increase since October 2012. Retail fuel margin averages now stand at $0.261 per gallon. That’s almost a $0.16 per gallon increase in just two weeks.
Retail fuel margin averages for 2013 now stand at $0.144 per gallon. It looks like the calendar Q1 fuel margins for 2013 will recover from their abysmal start, and end up at the low end of annual averages.
by John Keller | Mar 8, 2013 | Fuel Price Management, Fuel Pricing Strategy, Retail Fuel Margins
An NBC News article published in their Online Business section discusses the addition of Propane to the list of alternative fuels being considered for vehicle retrofitting.
The home satellite provider DISH Network Corp has announced they will run 200 of their trucks on Propane. The DISH Network Corp expects a 55 percent reduction in fuel costs for the Ford E-250 cargo vans that will run on propane – amounting to a saving of about $2,500 per vehicle per year. There are more than 13 million vehicles using Propane worldwide but Propane is a niche product in the United States.
But over the past 3-4 years, the wholesale cost of Propane has dropped in half, and Propane production has increased nearly 50%. The cost of adding a Propane fueling station is less than $50,000 and takes less than one day. That makes it much less of a commitment than adding CNG or LPG fueling stations.
According to the US EIA map of the alternative fuel stations in the lower 48 United States, the number of Propane stations is second only to Electric, and just ahead of E85 stations. But while Electric stations are concentrated in the urban areas on the coasts and Great Lakes, Propane stations are more widely distributed across the whole US, including Texas and the Mid-west.
As we monitor the growth of alternative fuels in the retail fuel management industry, retail fuel pricing managers would be wise to consider adding Propane to their product portfolio as a market differentiator, and an opportunity for high fuel margins.
by John Keller | Mar 1, 2013 | Fuel Price Management, Fuel Pricing Strategy, Retail Fuel Margins
The latest OPIS report showed retail fuel margins jumped $0.062 for the week, the largest weekly gain since late October 2012. The average retail margin throughout the US now stands at $0.164 per gallon.
The gain this week brings the retail fuel margin for the month of February to $0.096 per gallon. The average US fuel margin for all of 2013 now stands at $0.131 per gallon.
This week’s number is a welcome relief to the fuel pricing manager and we can only hope the roughest times for this season are behind us.
by John Keller | Feb 21, 2013 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
In the latest US Energy Information Administration “This Week In Petroleum” report, the US EIA says there are signs that improved fuel margins may be on the horizon.
From the report: “Despite the significant rise in retail gasoline prices since the start of the year, a part of the even steeper rise in wholesale prices has not yet been fully reflected in pump prices. Thus, if wholesale prices were to remain steady rather than decline, a modest further increase in pump prices would be expected.”
That means the potential is there for retail fuel prices to increase a little more to cover the wholesale price increases seen since the beginning of the year. That would allow c-stores to catch up in their margins. How likely are wholesale fuel prices to remain steady? The report states that refinery maintenance typically peaks in February, so we should be nearly finished with that part of the season. The report also states that 11 million barrels of waterborn gasoline are on their way to the US and Canada. And finally, the report states that reformulated gasoline blendstock for oxygenate blending (RBOB) futures and Brent spot prices have declined recently.
It has been a tough start to the 2013 year for c-store fuel margins. We can expect Q1 retail fuel results to reflect these low fuel margins in January and February. Hopefully the wholesale prices will settle and allow c-stores to return to normal retail fuel margins in March and on into the spring when retail fuel demand begins its annual increase.
