by John Keller | Jun 3, 2010 | Fuel Price Management, Fuel Price Optimization, Industry News, Retail Fuel Margins
In today’s edition of the US Energy Information Administration’s “This Week In Petroleum” report, the US EIA reported a drop in US average fuel prices for the third consecutive week. The cumulative drop across the country for these three weeks is almost $.18 for regular unleaded, which now averages $2.72 per gallon.
This week regular unleaded fuel dropped $.06 on average, which is still priced $.20 per gallon higher than last year at this time. Prices dropped in all regions of the country, with the East Coast and Midwest dropping the most at $.07 per gallon. On the West Coast, fuel prices dropped $.03 bringing the average to $2.98. The last time averages were below $3.00 on the West Coast was back in March 2010. California averages also dropped $.03 but still remained above $3.00 with an average price of $3.02 per gallon.
by John Keller | May 20, 2010 | Fuel Price Management, Retail Fuel Margins
As reported in CSP News, the latest Lundberg survey of 5000 US gas stations determined that over the past two weeks, the average price of fuel decreased $.42 per gallon. With the price of crude oil increasing $.20 per barrel over that same time period, retail fuel margins shrank by 2.16 cents per gallon.
So far this year, the combined retail fuel margin of all three grades of gasoline stands at 11.51 cents per gallon, just one tenth of one cent below the retail fuel margins of 2009.
Such razor thin retail fuel margins continue to reinforce the urgency to manage fuel prices, volumes, and margins with a robust Fuel Pricing Software system. These systems provide the strategic capabilities and speed to the street beyond those provided by simple homegrown Excel systems built for fuel price management.
by John Keller | May 14, 2010 | Fuel Price Optimization, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
In today’s Short-term Energy Outlook published by the U.S. Energy Information Administration, the independent statistics and analysis organization predicted the Unleaded fuel price annual average will hit $2.86 per gallon for 2010. That’s slightly more than 22% over the 2009 average of $2.35. The report predicts the annual average will rise again in 2011 to $2.98 per gallon.
The report does not blame the Louisiana oil spill for this rise in fuel prices, though it does say there may be a longer term impact on energy supplies, prices, and infrastructure in the region.
As Fuel Managers navigate the gradual rise in fuel prices over the next few years, it’s critical to leverage a fuel pricing software application to make the best strategic decisions from a volume and profit standpoint, day by day.
by John Keller | May 3, 2010 | Fuel Price Optimization, Industry News, Retail Fuel Margins
On April 14, 2010, the National Association of Convenience Stores presented a summary of 2009 performance statistics at their annual State of the Industy Summit. Key statistical takeways:
- Motor fuel sales represent 68.4% of all convenience store sales dollars. That’s despite a 28% drop in fuel prices and a corresponding 26.9% drop in fuel revenue during 2009.
- Total gallons of fuel sold rose 1.3% over 2008.
- Motor fuels retail fuel margins were at 13.8 cents per gallon.
- Motor fuels contribution to the industry’s profit dollars was 27.3%, where in-store sales contributed 72.7% to store profits.
Once again these statistics reinforce the importance of two things:
1. Monitoring fuel volume and retail fuel margins require diligence on the part of Fuel Managers, who are responsible for an enormous amount of revenue, at razor thin margins.
2. While fuel sales contributions to c-store profits may only be one-third of overall in-store profits, there’s no question that effective fuel strategies drive business to that critical profitabilty gained from in-store sales.
by John Keller | Apr 27, 2010 | Fuel Price Optimization, Retail Fuel Margins
As reported in CSP News, the latest Lundberg survey of 5000 US gas stations determined that over the past two weeks, the average price of fuel decreased $.42 per gallon. With the price of crude oil increasing $.20 per barrel over that same time period, retail fuel margins shrank by 2.16 cents per gallon.
So far this year, the combined retail fuel margin of all three grades of gasoline stands at 11.51 cents per gallon, just one tenth of one cent below the margins of 2009.
Such razor thin retail fuel margins continue to reinforce the urgency to manage fuel prices, volumes, and margins with a robust Fuel Pricing Software system. These systems provide the strategic capabilities and speed to the street beyond those provided by simple homegrown Excel systems.
by John Keller | Apr 15, 2010 | Fuel Price Optimization, Industry News, Retail Fuel Margins
In a statement that sets consumer expectations for fuel to top out at $3/gallon this year, the Troy Messenger reported today that an expert with AAA doesn’t expect fuel prices to go much above $3/gallon if even that.
“This is just the time of year where we see prices increase because our demand naturally increases,” said Clay Ingram, public relations and marketing manager for Alabama AAA.
Ingram said the trend occurs every year around spring after drivers have recovered financially from the holidays and have begun to get out and enjoy the weather. “It’s not unexpected by any means,” he said.
Ingram said economic factors may be currently influencing fuel prices, as well. “There seems to be a little optimism on the Wall Street side of things that the economy might be turning around,” he said. That confidence drives up the price of commodities as investors rush to buy crude oil.
Still, Ingram said that at $83 per barrel, the price of oil is where it should be, and while demand is rising as expected, it is still relatively low. “Our demand right now comparatively, is really mild,” he said. For that reason, Ingram explained consumers shouldn’t worry about any dramatic increases in fuel prices like what was seen two years ago.
“That will be why we won’t see our fuel prices go up a dollar per gallon in a month,” he said. “I don’t think we’ll see anything that extreme this year.”
Ingram said that high inventories and favorable refining capacities are also factors that will likely prevent sudden fuel price increases since they would allow for the accommodation of a sudden spike in demand.
In fact, Ingram said fuel prices could be near a high-mark for the year. “I’m not even sure we’ll go over $3 a gallon this year. If we do, it won’t be by much,” he said.
