There is a growing list of articles in the press predicting that fuel prices are going to drop in the coming months. Both a AAA report and a report from the US EIA say fuel prices should begin to drop, with regular unleaded fuel leveling out to $3.95 per gallon.
Fuel prices for regular unleaded from April to September should be $3.95 per gallon according to the US EIA. Average prices for that same period last year were $3.71.
In the OPIS Retail Fuel Watch, OPIS reported retail fuel prices dropped $0.8 cents per gallon nationally, the lowest level since March 27.
The most common fuel price is $3.799, with just under 19% of the stores across the nation having fuel prices above $4.00 per gallon.
PriceAdvantage allows you to display in your fuel price management system OPIS Radius report information about specific competitor stores, so you can compare your prices to the competition and quickly react with price changes as needed.
According to CSP Daily News, the convenience store industry is facing the lowest retail fuel margins in years. Lower retail fuel margins so far in 2012 are a result of wholesale fuels costs rising more rapidly than retail fuels prices.
During the last week of February 2012, retail fuel margins were the lowest in over two years.
“Estimates of January retail fuel margins by publicly owned c-store companies showed gasoline margins for the month decreased 15% compared to the previous year…”. The article continued “National retail fuel margins averaged 12.9 CPG for the month of January, down approximately 2.3 CPG year over year.”
From a fuel price management perspective, it’s clear there is only one way to stay afloat: carefully monitor the daily and even hourly changes in fuels costs, monitor competitor retail fuel prices hourly, and quickly implement fuel price changes to optimize retail fuel margins. C-store chains relying on the outdated methods of spreadsheets, emails and phone calls simply can’t keep up with today’s wildly dynamic retail fuel pricing environment.
The original CSP Daily News article may be found here.
According to the US EIA, average unleaded retail fuel prices across the US rose another $0.04 a gallon this week. Once again, hardest hit was the Rocky Mountain PADD region where average unleaded fuel prices rose by $0.15 to $3.623 per gallon. After having fuel prices more than $0.25 per gallon lower than the next lowest region for much of this year, the Rocky Mountain PADD region has now almost caught up to the Gulf Coast PADD region after rising almost $0.30 over the last two weeks, and now is only by $0.07 the lowest PADD region in the country.
Only one PADD region in the country has average unleaded retail fuel prices over $4.00 per gallon, the West Coast PADD region with average unleaded fuel prices of $4.234.
According to the US EIA, average unleaded retail fuel prices across the US rose another $0.03 a gallon this week. Hardest hit was the Rocky Mountain region where the average price for unleaded fuel rose $0.14 a gallon. Fuel prices in the Rocky Mountain region are still the lowest in the country, averaging $3.47 a gallon, $0.17 a gallon less than the next lowest region which is the Gulf Coast where the average gallon of unleaded is $3.647.
Average fuel prices increased in every region except New England, where the average price of a gallon of unleaded dropped $0.01 to $3.809.
The US Energy Information Administration reported their Short-Term Energy Outlook report today, and the administration expects regular‐grade retail fuel prices to average $3.79 per gallon in 2012 and $3.72 per gallon in 2013, compared with $3.53 per gallon in 2011. During the April through September summer driving season this year, prices are forecast to average about $3.92 per gallon with a peak monthly average price of $3.96 per gallon in May.
The value of futures and options contracts imply a 2 percent probability there will be a monthly average regular-grade fuel retail price of approximately $5.00 per gallon.
From a fuel price management perspective, if history repeats itself, these fuel price averages will have a high impact on fuel volumes, causing a significant decline in fuel volumes in 2012 and 2013.