OPIS reported this week that average retail fuel margins increased for the second consecutive week, rising $0.042 per gallon this week. Retail fuel margins are now at $0.240 per gallon.
The increase this week erases the loss in fuel margins seen the last half of November, resetting margin levels to those of mid-November.
All indications are that 2012 will finish with robust fuel margins.
Everyone knows that GasBuddy provides rich content for gas station pricing in cities all across the US. GasBuddy makes it easy to view a list of fuel prices across a city and view the location of each c-store with its fuels prices.
But what fuel analysts may not know is that GasBuddy also provides a valuable “Trip Cost Calculator” tool on their www.gasbuddy.com website. This tool allows travelers to plan their trips based on a start and end destination, miles per gallon for their auto, and tank size. The tool then provides a Google map view of the optimal route with directions, along with the best location to stop for gas, and the current cost of gas at that location.
From a fuel pricing strategy perspective, this is yet one more motivation to integrate fuel price optimization software to GasBuddy OpenStore so that each time a price change occurs, the latest information is automatically posted to GasBuddy. This insures that your locations always appear on the GasBuddy map, with the most accurate fuels prices.
Mutual PriceAdvantage and OpenStore customers including Valero, Parker’s, Family Express and Rutter’s have already integrated their fuel pricing strategy with GasBuddy OpenStore. These industry leaders have proven they know what it takes to succeed in the fuel price management world, and how to leverage the best technology to win.
“We couldn’t be happier that PriceAdvantage has replaced our previous fuel pricing solution. It is a superior tool in that it gives us the ability to pull historical data easily, manage multiple price changes per day, and provide a user-friendly interface at the headquarters and store level.” So says Stewart Spinks, founder of The Spinx Company and member of the Convenience Store News Industry Hall of Fame. The Spinx Company uses PriceAdvantage as their fuel price optimization software to manage all their c-stores across South and North Carolina.
“We needed a solution that would allow our managers to spend more time taking care of our customers instead of entering data that was already available through our POS systems,” adds Mr. Spinks. “PriceAdvantage has saved Spinx store managers an estimated 45 per minutes per day as they no longer enter volume or sales data. Additionally, we are implementing price changes faster and more accurately than ever as PriceAdvantage changes prices from the POS to the pump and electronic price signs with one click. We are extremely happy with our decision to install PriceAdvantage across our network of stores. PriceAdvantage has reduced the amount of time it takes us to respond to competitor moves as well as other market conditions.”
The PriceAdvantage team has established a strong partnership with The Spinx Company, as is typical of the relationships we like to establish with all our customers. These partnerships inevitably lead to ever improving features in the PriceAdvantage software. With Valero, it was heat maps, robust store and market performance analytics, and fuel price optimization. With Cefco it was powerful fuel pricing strategy business rules. With The Spinx Company it was a series of reports that provide business insight in numerous ways, and most recently the ability to text a store manager when a price change has been submitted.
The PriceAdvantage team is proud to have such a strong partnership with The Spinx Company, a partnership that leads to mutually beneficial ongoing improvements in the business at both of our companies.
The Alternative Fuels Data Center of the US Department of Energy tracks the number of public alternative fueling stations, and the location of each, on their site here. The page includes public (not private) stations for propane, biodiesel, ethanol, electric plug-in, hydrogen, compressed natural gas, and liquid petroleum gas. According to the data as of November 25, 2012, here is the current rank order of each alternative fuel type by number of public stations.
From a fuel pricing strategy perspective, the fuel volume pie continues to shrink as traditional fuel demand decreases and alternative fuel demand increases. It is increasingly important to manage fuel performance at each region down to the market and even the store level. The traditional fuel price management game is not for the faint of heart, and only fuel analysts with the best fuel price optimization software can be successful.
Ever since last July when Valero announced the idea of spinning off their retail division to help add shareholder value, speculation in the c-store industry has been rampant. Would there be a large scale sell-off to a particular suitor or series of suitors? Would Valero sell off the stores piecemeal? Would the 1027 company-owned store chain remain in tact?
Yesterday Valero brought all speculation to an end by officially announcing the spin-off of their retail division, keeping it entirely in tact. The new company will be named Corner Store Holdings, Inc., and it will be publicly traded on the NYSE under the code CST. Valero expects to complete the spin-off by March or April 2013.
The CEO of the new company will be Kim Bowers, replacing Gary Arthur who is moving to the Wholesale Marketing division. Bowers will be in charge of the 1027 stores Valero owns in the US, while Arthur will be in charge of the independent branded stores Valero doesn’t own.
It will be interesting to see what fuel brand options Corner Store Holdings decides to explore, now that they will be out from under the wing of Valero refining. We can expect Corner Store Holdings to enter a growth mode in store count based on a statement from Bill Day, Valero spokesman. “Bowers has a lot of experience in mergers and acquisitions, and expanding lines of business,” Day said. “That’s what retail is all about.”
Valero Retail uses the PriceAdvantage fuel pricing optimization software for their gas pricing strategies at all 1027 company-owned retail stores in the US.
In their Short-Term Energy Outlook released today, the US Energy Information Administration reported that fuel demand in 2012 will be .3% lower than 2011. The agency also projected in the report that 2013 fuel demand will be unchanged from 2012.
In 2012, the .2% projected increase in highway travel was offset by the .5% increase in fleet-wide fuel efficiency, thus the net of a .3% decrease in fuel demand.
In 2013, the US EIA predicts that despite higher assumed growth in U.S. real disposable income and a projected decline in gasoline retail prices of 5.5 percent, forecast motor gasoline consumption will remain almost unchanged from 2012 because of continued slow growth in the driving-age population, improvements in the average fuel economy of new vehicles, and increased rates of retirement of older, less-fuel-efficient vehicles.
From a fuel price management perspective, if these projections prove to be accurate, retail fuel analysts will need to enlist the best fuel price optimization software available to win their share of the fuel volume pie.
The full report may be found here.
There’s a new mobile gas prices app available for the iPhone and Android, and this time the prices are not reported by drivers but by the trusted source of OPIS. It’s the MapQuest Gas Prices app available here, and it automatically detects the location of the phone to display nearby retail fuel locations. It also allows the user to enter an address to find gas prices near there, and it can store favorites for quick reference to someone’s most commonly frequented fueling stations.
With the PriceAdvantage OPIS integration, now fuel managers can be sure their latest fuel price information is displayed on the app, and their retail fuel prices are 100% accurate. After price changes are complete, PriceAdvantage sends the newest prices to OPIS, who then posts the price on MapQuest, AAA, Garmin and other sites.
I use the new MapQuest Gas Prices app on my Droid and I find the user interface to be simple to use and extremely accurate.
In Dekalb County Georgia, east of Atlanta, there are now seven compressed natural gas (CNG) stations providing retail fuel to consumers. Two new stations opened in October, including one with eight fueling bays, making it one of the largest in Georgia. The other new station is the first in the nation to simultaneously produce CNG from landfill gas, dispense it to consumers on site and pipe any excess back into the natural gas pipeline. The renewable natural gas not used as CNG at the fueling station is injected into the natural gas pipeline and transported to other CNG fueling stations throughout the Atlanta metro area. DeKalb County Sanitation Department has converted 40 vehicles from diesel fuel to CNG. The county’s goal is to replace or adapt its entire fleet of 306 sanitation vehicles with natural gas vehicles over the next six years.
Gas South provides CNG fuel for six of metro Atlanta’s seven public CNG stations.
These two new stations are owned by DeKalb County, so the DeKalb County Board of Commissioners is setting the gasoline gallon equivalent price for private users. From a fuel price management perspective, there are times when the price set by the Board is less than the market price.
OPIS reported this week that average retail fuel margins reversed a four week trend and increased by $0.03 per gallon this week. Retail fuel margins are now at $0.198 per gallon.
The increase this week virtually offsets the loss in fuel margins last week, resetting margin levels to those of November 23.
This news is welcome relief to the fuel analyst as we enter into the final weeks of 2012.
If you’re not already offering compressed natural gas (CNG) as a retail fuels alternative, next year may be the year to start planning for a future retail fuels product offering that includes CNG. Consider the following set of data points:
Without question, fuel analysts need to keep a close watch on their markets to gauge the growing CNG opportunities. This alternative fuel may be a critical new way to help with retail fuel margins, and to help maintain fuel volumes, as part of the overall fuel price management strategy.
