by John Keller | Mar 2, 2011 | Fuel Price Management, Industry News
In the weekly “Today in Energy” report released March 1, 2011 by the US Energy Information Administration, there’s a good equation explaining how much a price increase for a barrel of oil equates to a retail fuel price increase.
“Many factors affect retail gasoline prices, but changing prices for domestic and global crude oils are particularly important. Typically, a $10 per barrel change in the spot price of crude oil translates into about a 24 cent per gallon change in the retail price of gasoline within about two months. About half of that price change usually occurs within the first two weeks of the crude oil price change. From the beginning of 2011 through February 18 – just before the Libyan crisis began – the spot price of Brent crude oil increased about $9 per barrel from $93 per barrel to $102 per barrel. Since then, the price of Brent crude oil has increased by a further $10 per barrel.”
That’s relatively consistant with what happened in the retail fuel market over the past 2 weeks, where the latter half of February 2011 saw a $10 increase in a barrel of oil equate to a $.25 retail fuel price increase.
by John Keller | Mar 2, 2011 | Retail Fuel Margins
Susser Holdings Corporation reported their retail fuel margin results for Q4 2010 and for the entire 2010 fiscal year.
Retail fuel margins for the fourth quarter were 15.0 cents per gallon, versus 22.8 cents in the third quarter and 11.9 cents in the fourth quarter of 2009. The report states that their retail fuel margins helped contribute to their 9.4 percent increase in companywide gross profit compared to last year’s fourth quarter. The Q4 gross profit for 2010 hit $112 million. Retail fuel volumes increased 4.8 percent from a year ago to 182.4 million gallons for the fourth quarter. That equates to 141,067 gallons per store per month on average. According to NACS, the average c-store sells 121,000 gallons of fuel per month annually. That means Susser stores sold about 16% more than the national monthly average.
Retail fuel margins for the entire 2010 fiscal year hit $.184 per gallon.
Sam Susser, President and CEO said “As the recovery gains momentum in 2011, we expect to see additional growth in both merchandise and fuel volumes, although we do not expect to match the unusually strong fuel margins of 2010.”
The Company added seven large format retail stores during the fourth quarter, converted three retail stores to dealer operations and closed three smaller underperforming stores, bringing the total number of retail stores in operation at year-end to 526.
For the 2011 fiscal year guidance figure, the report shows a range of $.14 – $.17 per gallon.
by John Keller | Feb 28, 2011 | Fuel Price Optimization, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
Retail fuel prices rose by $.20/gallon since last week, according to today’s US Energy Information Administration report. The US national average retail fuel price of unleaded gasoline spiked to $3.38/gallon, a gallon of midgrade rose to $3.49, and a gallon of premium rose to $3.62.
Fuel prices have risen 10 of the past 11 weeks, but the increase this week is four times any increases seen the previous 11 weeks. The fuel price increase this week is the largest since Hurricane Katrina hit in 2005, when the refinery output in the Gulf was disrupted.
The largest fuel price increases were in the Midwest, where the average gallon of unleaded gas rose 22 cents to $3.36/gallon. The smallest fuel price increases were in the Rocky Mountain region, where unleaded rose $.11 to $3.23/gallon. As for individual states, Ohio had the largest fuel price increase of the week, where prices rose $.30/gallon for unleaded, with an average price of $3.37/gallon.
In Los Angeles and San Francisco, a gallon of Unleaded is priced at $3.73 and $3.75 per gallon. In San Francisco, Premium is just short of $4.00 at $3.96/gallon.
by John Keller | Feb 21, 2011 | Retail Fuel Margins
TravelCenters of America announced in their annual report for 2010 that their retail fuel margins were 5.4%. Based on the 2011 NACS Annual Fuels Report, that equates to approximately $.16 per gallon. Retail fuel margins in 2009 were 6.4%. The last three months of 2010 had retail fuel margins at 4.7%, or approximately $.14 per gallon, essentially unchanged from the same period in 2009. According to NACS, the average c-store sold fuel at a 5.6% margin. That means TA sold in line with the national annual average for 2010.
Same site fuel volumes for the year were up 6% from 2009. The report attributes this volume increase to the effectiveness of the company’s marketing and customer service efforts, as well as increased economic activity. Fuel volumes for the final three months of 2010 were up 2.3% from the same period in 2009.
At the end of 2009, TravelCenters of America had 228 sites, five fewer than at the end of 2009. Of the 228 sites, 62 operate under the “Petro” brand.
Net losses for the year were $65m compared to a net loss of $89m in 2009. For the fourth quarter, net losses were $30m compared to $44.6m for the previous year.
by John Keller | Feb 21, 2011 | Fuel Price Management, Fuel Pricing Strategy, Industry News
OPIS (Oil Price Information Service) sent an email alert today warning of a $.05 wholesale fuel cost increase expected for February 22, 2011. The complete message is pasted here.
“The peace and calm for marketers who are today observing Presidents’ Day has been interrupted by a paroxysm in global prices for crude and refined products, which almost certainly will add 5cts/gal or more to wholesale prices tomorrow.”
“The New York open outcry markets are closed, but some hefty volumes have changed hands in electronic trading and sent overseas crude prices as high as they’ve been since September 2008, and pushed gasoline and diesel prices up 5- 7cts/gal in the process.”
“Brent crude, which has been the driving force behind NYMEX RBOB and heating oil futures price gains in 2011, traded for over $105/bbl this morning, spurred by violence that appeared to escalate into chaos in Libya. Libya produces some 1.7 million b/d of crude. There are also concerns that violence in the Persian Gulf may be ratcheted higher as unrest in the region shows no completion date.”
“April Brent crude was trading at $104.73/bbl, up $2.21/bbl at presstime. Even higher numbers were seen in electronic WTI action, where the expiring March contract moved up $4/bbl to $90.19/bbl and the April contract (which will soon represent the prompt month) rallied some $4.38/bbl to $94.08/bbl. This latter rally has the interest of technical analysts, who believe it may signal a much larger pop.”
“March RBOB futures were up 5.87cts/gal at $2.61/gal and April (the low RVP month) moved up 5.87cts /al to $2.749/gal. March heating oil was up 6.46cts/gal at $2.7775/gal and April barrels were 6.52cts/gal higher at $2.7912/gal.”
“Most U.S. oil companies are closed today (2/21/11), so OPIS has not yet seen a host of intraday moves. Terminals are quite busy, however, as jobbers race to get ahead of price increases that might add $400-$500 per load when spot markets reopen for business tomorrow.”
From a fuel price management perspective, this is one more indicator that the time is now to invest in fuel pricing solutions that allow for the monitoring of cost changes, competiitor responses, fuel volume actuals vs. targets, strategy review, price optimization, and price change execution, in order to make sure fuel budgets for the year stay on track.
by John Keller | Feb 14, 2011 | Fuel Price Management, Industry News
Fuel prices increased yet again, according to the US Energy Information Administration. The US national average retail fuel price of unleaded gasoline rose 1 cent to $3.14/gallon, a gallon of midgrade was unchanged at $3.25, and a gallon of premium rose 1 cent to $3.38. Prices have now risen 8 of the past 9 weeks.
The largest fuel price increases were on the West Coast, where the average gallon of unleaded gas rose five cents to $3.38/gallon. With the three cent increase in the Rocky Mountain and Gulf Coast regions, the average price for unleaded gas is now above $3.00/gallon in every region of the country. Only the Midwest region saw their average unleaded fuel price decrease, down three cents to $3.09/gallon.
As for individual states, Ohio had the largest fuel price decrease of the week, where prices dropped by $.13/gallon for unleaded, with an average price of $2.99/gallon.
After seeing a seven cent price increase for unleaded the week before, Chicago fuel prices dropped by three cents this week to $3.28/gallon.
by John Keller | Feb 14, 2011 | Customer News
After completing their pilot program, Rutter’s Farm Stores is now beginning their full rollout of the PriceAdvantage fuel pricing solution to all their stores. This project includes an integration to their Radiant POS system, as well as to their Skyline signs. The pilot program of their five stores has proven successful at improving their speed to the street when implementing fuel price changes, and at giving them complete command and control over their fuel price management.
by John Keller | Feb 9, 2011 | Customer News
Sheetz is now approaching 200 as the number of their stores fully automated with PriceAdvantage and Radiant Systems POS. With PriceAdvantage, Sheetz is now controlling prices at the sign, POS and pump, freeing up Store Manager time to be more available for customer service, and providing lower costs in sign operations.
by John Keller | Feb 8, 2011 | Fuel Price Management, Fuel Pricing Strategy, Industry News
Fuel prices increased again, according to the US Energy Information Administration. The US national average retail fuel price of unleaded gasoline rose 3 cents to $3.13/gallon, a gallon of midgrade rose 3 cents to $3.25, and a gallon of premium rose 3 cents to $3.37. The previous week showed a one cent decrease, but prices have risen 7 of the past 8 weeks.
Once again the largest fuel price increases were in the Rocky Mountain region, where the average gallon of unleaded gas rose five cents to $2.98/gallon. That region still has the lowest fuel prices in the country, one of only two regions where unleaded remains below $3.00/gallon. The other region below $3.00/gallon is the Gulf Coast, where the average price of unleaded is the lowest in the country at $2.97.
As for individual states, Minnesota had the only fuel price decrease of the week, where prices dropped by $.01/gallon for unleaded, with an average price of $3.13/gallon. California again has the highest fuel prices in the country where the average price for a gallon of unleaded is $3.39, up three cents from last week.
Chicago was hit with the highest fuel price increase in the country, where the price of unleaded rose seven cents to $3.31/gallon. Los Angelese and San Francisco were the only two cities with prices above $3.40/gallon, both reporting an average price of unleaded at $3.41/gallon.
by John Keller | Feb 3, 2011 | Retail Fuel Margins
Tesoro Corporation announced in their financial results for 2010 that US retail fuel margins for the year were $.21 per gallon, matching the retail fuel margins of 2009. This annual retail fuel margin is five cents higher than the national 2010 average of $.163 per gallon, as reported by NACS in their 2011 Annual Fuels Report. Retail fuel margins for Q4 were at $.17 per gallon, lower by $.09 per gallon than last year’s Q4.
Across their 880 total stations in the US, Tesoro sold 126,228 gallons per store per month, more than 2009 by just over 1000 gallons per month. This is 5,000 gallons per store per month more than the national average of 121,000 gallons sold by c-stores across the US.
Tesoro has 6 fewer stations at the end of 2010 compared to 2009. Tesoro now has 381 company-operated stores under the Tesoro, Shell, Mirastar, and USA Gasoline brands. Tesoro has an additional 499 branded jobber/dealer stores. The Tesoro locations are in the Western US, as far east as Minnesota, south to New Mexico, and West to the Pacific Coast states, as well as Alaska and Hawaii. Tesoro operates seven refineries in the Western US.
