by John Keller | May 13, 2011 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
There’s a great MSNBC news article out today discussing the role of the US Federal Government in helping fuel prices trend downward. The key takeaway for the Fuel Price Manager is that fuel prices are going to continue their downward trend of recent days. From a Fuel Price Management perspective, that means it’s a critical moment to invest in fuel pricing solutions that allow the continued monitoring of wholesale costs, and the competitor fuel price reaction. As cost drops, now is the time to increase retail fuel profits, while carefully managing the gradual fuel price decreases that the consumer expects.
News agencies are making it common public knowledge that retail fuel prices are quick to rise when wholesale costs increase, and slow to drop when wholesale costs decrease. But these agencies are setting customer expectations for retail fuel prices to drop over the coming months. That means people will be looking for price decreases, and will be quick to jump on them with a fill-up when they see a well-advertised price.
Here are highlights from the article:
- Oil prices have peaked and appear to be coming down.
- After flooding the financial system with cash for more than two years in an effort to stabilize financial markets and economy, the Fed is getting ready to turn off the taps. The anticipation is one reason oil prices are coming back down.
- For all of the complex forces acting on the global oil market, the dollar has a powerful sway for the very simple reason that oil is priced in dollars. The dollar has begun showing signs of strength. Just as a weaker dollar helped send oil prices surging, a stronger dollar is reining them in.
- The forces that drove prices higher seem to have reversed course. Global growth seems to be slowing. The dollar is strengthening. And the inflation threat from the Fed’s easy-money policies may be easing.
- Until the outlook for oil prices becomes clearer, expect more daily price swings that will send even the most seasoned traders looking for cover.
The full article may be found here.
by John Keller | Apr 8, 2011 | Retail Fuel Margins
According to an OPIS Price Watch Alert issued today, OPIS predicts the average fuel prices in the US will hit $3.75/gallon this week. The national average hasn’t been that high since September 21, 2008. Soon after that date, the Lehman Brothers financial crash ultimately brought fuel prices down below $1.70/gallon by the end of 2008.
The alert goes on to attribute the ongoing price increase to “several cents of pure catching up for retail gasoline numbers”.
by John Keller | Mar 28, 2011 | Industry News, Retail Fuel Margins
In today’s US Energy Information Adminstration weekly fuel price report, the USEIA revealed another $.03 increase for Unleaded Regular fuel. The US national average retail fuel price of unleaded gasoline now sits at $3.59/gallon, a gallon of midgrade rose to $3.71, and a gallon of premium rose to $3.83. Fuel prices have now risen $.46 in the last six weeks, and are now at their highest levels since September 2008.
The regional area hit hardest was the West Coast once again, along with the Rocky Mountain region, where the average price for unleaded rose $.06 to $3.91/gallon on the West Coast and $3.44/gallon in the Rocky Mountains. Despite the $.06 increase, the fuel prices in the Rocky Mountains are still the lowest there of any other region. The lowest increase of any region was $.01 in the Central Atlantic, where a gallon of unleaded is $3.57.
As for individual states, Washington had the largest fuel price increase of the week, where prices rose $.08/gallon for unleaded, with an average price of $3.77/gallon.
The average price of Unleaded in California broke the $4 barrier for the first time in recent history, reaching $4.02/gallon. In Los Angeles and San Francisco, a gallon of Unleaded is priced the highest in any major city, at $4.06 and $4.04 per gallon.
by John Keller | Mar 24, 2011 | Fuel Price Management, Retail Fuel Margins
The US Energy Information Administration just released their latest “This Week In Petroleum” report with updates regarding retail fuel price management. Here are the highlights.
The U.S. average retail price of regular gasoline decreased half of a cent versus last week, the first decline since January 31, 2011. At $3.56 per gallon, gasoline is $0.74 per gallon higher than last year at this time. The biggest decrease was on the Gulf Coast, where the gasoline price fell almost two cents. The gasoline average on the East Coast lost a penny on the week and the Midwest price was down just under a cent. Moving in the other direction, the West Coast average moved up about two cents. In the Rocky Mountains, the price was almost three cents higher than last week. Despite this increase, the gasoline price in the Rocky Mountains remained the lowest in the country at $3.39 per gallon. The most expensive gasoline among the major regions is on the West Coast, where the average retail price is $3.86 per gallon.
Diesel prices fell for the first time in sixteen weeks, albeit a small decrease, with the national average down just a tenth of a cent from last week. At $3.91 per gallon, the diesel price is $0.96 per gallon higher than last year at this time. Diesel prices were mixed across the country, with prices falling less than a penny on the East Coast, Gulf Coast, and in the Midwest. Prices in the Rocky Mountains were up almost four cents. The average on the West Coast was also up on the week, adding over a penny to last week’s price.
by John Keller | Mar 14, 2011 | Fuel Price Management, Fuel Pricing Strategy, Retail Fuel Margins
In today’s US Energy Information Adminstration weekly fuel price report, the USEIA revealed another $.04 increase. The US national average retail fuel price of unleaded gasoline now sits at $3.56/gallon, a gallon of midgrade rose to $3.69, and a gallon of premium rose to $3.80. Fuel prices have now risen $.42 in the last month, and are now at their highest level since September 2008.
The regional area hit hardest was the West Coast, where the average price for unleaded rose $.08 to $3.84. Next was the Rocky Mountain region where unleaded rose $.06 to an average price of $3.35, though fuel prices are still the lowest there than in any other region. The lowest increase of any region was $.03 in the Gulf Coast, where a gallon of unleaded is $3.43.
As for individual states, Ohio had the largest fuel price increase of the week, where prices rose $.09/gallon for unleaded, with an average price of $3.54/gallon.
In Los Angeles and San Francisco, a gallon of Unleaded is priced at $3.97 and $3.96 per gallon. Mid-grade in these cities is now priced above $4.00 for the first time in recent history, at $4.07/gallon.
by John Keller | Mar 11, 2011 | Fuel Pricing Strategy, Retail Fuel Margins
Alon USA in their management reports revealed their retail fuel margin results for Q4 2010 and for the entire 2010 fiscal year.
Management reported retail fuel margins for the fourth quarter were 14.8 cents per gallon, versus 10.8 cents in the fourth quarter of 2009. Retail fuel margins for the entire 2010 fiscal year hit 12.9 cents per gallon, compared to 13.9 cents per gallon in FY2009.
The annual fuel volume per site per month was 39,000 gallons. According to NACS, the average c-store sells 121,000 gallons of fuel per month annually. That means Alon stores sold about one-third of the national monthly average.
The total number of stores at the end of the fiscal year was 304, four stores fewer than in 2009. Alon USA is the largest 7-11 Licensee in the US, operating sites across the southwest under the FINA brand.
