Retail fuel prices in the UK hit a new record last week. Fuel is priced by pence per liter in the UK, and fuel prices averaged the equivalent of $7.30/gallon in US dollars. Higher crude costs were the cause.
Source: NACSOnline and Automobile Association
Retail fuel margins in the third quarter at Kroger hit $0.127, compared to $0.119 for the same period last year. Michael Schlotman, CFO, reported in the Kroger earnings call December 2, 2010: “On a rolling four-quarter basis, the cents per gallon retail fuel margin was $0.121 compared with $0.107 in the comparable prior period. In the third quarter, our retail fuel operations benefited our total Company results by about a penny per share on a year-over-year basis”.
The US Energy Information Administration today reported national average US fuel prices reversed the two week trend of declines and increased to prices not seen since October 2008. Regular Unleaded fuel increased $.10/gallon this week, the largest change week-to-week since May 2009. The average price for Unleaded across the US is now $2.95 per gallon.
Regionally, the biggest increases were in the Midwest and Gulf Coast, where Unleaded fuel rose $.14/gallon. The Lower Atlantic states saw an increase of $.11/gallon for Unleaded, but in the Central Atlantic states and on the West Coast, Unleaded fuel only increased $.06/gallon this week. In the Rocky Mountain states, the price of Unleaded fuel was unchanged.
The highest prices for Unleaded were in California, with the average Unleaded fuel price in Los Angeles hitting $3.28 and in San Francisco $3.29.
Retail Fuel margins are projected to be $.12/gallon for fiscal year 2010 in the Kroger Q3 earnings report issued December 2, 2010. Kroger’s Form 8-K filed with the US Security Exchange Commission also projects “continued strong growth in gallons sold”.
This $.12/gallon retail fuel margin projection is 5 to 7 cents lower than many other companies selling retail fuel in a comparison of financial results in 2010.
Thirty years after exiting the fuel service business, Cracker Barrel Old Country Store will again be offering alternative fuel to their restaurant customers, this time via electric vehicle charging stations at 24 locations.
“In the early days, Cracker Barrel provided food for our guests and fuel for their cars. While we expect that use of the electric chargers will be light during this pilot project, making this available to our guests is consistent with our brand reputation of hospitality, service, and value,” CEO Michael Woodhouse said. The company removed fueling pumps in the early 1970s.
The project will allow guests to receive an 80% charge in under a half hour at the 12 participating Cracker Barrel locations with DC Fast Charging stations. Twelve additional locations will have the slower Blink EV L2 chargers. Installation is scheduled to begin in the spring of 2011 and to be completed within a few months.
It’s interesting to see new players enter the retail fuel market as electric vehicle charging stations slowly become available.
Source: NACS Online
Retail fuel margins in the US improved by $.0134 per gallon to reach $.1712 per gallon, according to the second quarter financial report from Alimentation Couche-Tard. These retail fuel margin improvments helped net earnings improve by 19.7%. The company also cited additional sites offering fuel as a reason for the improved earnings.
Alain Bouchard, president and chief executive officer, said it was the company’s focus on margins that allowed them to deliver good results, as well as their focus on merchandise sales and expense control.
Fuel volumes in the US were up .5%. Total fuel gross profit in the US hit $143 million USD, and in Canada fuel gross profit hit $33 million USD, for a total of $176 million USD for the quarter. For the past two quarters, US fuel margins hit $.1811 per gallon.
The US Energy Information Administration today reported national average US fuel prices declined for the second straight week. Regular Unleaded fuel dropped $.02 this week, making it a $.04 drop since 11/15/2010. The average price for Unleaded across the US is now $2.85 per gallon.
Regionally, Unleaded fuel was almost unchanged across New England and the Mid-Atlantic states, but in the Midwest it dropped on average $.038 this week. In Colorado, the price of Unleaded dropped $.03, but in New York State, Unleaded rose $.015.
The highest prices for Unleaded were in California, with the average price in Los Angeles hitting $3.16 and in San Francisco $3.18.
When consumers hear there is an increase in oil prices, they expect to see an immediate increase in retail fuel prices. Actual fuel price management practices show the increases in retail fuel prices are often two weeks later.
In today’s This Week In Petroleum report published by the US Energy Information Administration, the US EIA documents this lag time between changes in spot fuel prices and retail fuel prices.
The spot price for a fuel commodity reflects the cost of crude oil and other inputs to refiners as well as the costs and profits of processing that crude oil into products. While retail fuel prices do follow changes in spot fuel prices, there is a consistant lag time between when spot fuel prices change and retail fuel prices change. The report shows that on a regional level, 50% of the retail fuel price change happens within two weeks of the spot fuel price change, and 80% of the retail fuel price change happens within four weeks.
The entire report can be found here.
According to an MSNBC article posted today, utilities companies in several parts of California, North Carolina and Texas are bracing for increased demand for electricity brought on by the popularity of electric vehicles in specific markets. Fuel Pricing Managers in these markets would be wise to keep a close watch on the growth of electric vehicles in their area, since electric vehicles are likely to have an impact on fuel pricing strategies as the overall fuel market ultimately shrinks in these areas.
Electric vehicle clusters are expected in neighborhoods where:
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The article goes on to name the specific cities of Santa Monica, Santa Barbara and Monrovia in California as likely electric vehicle clusters. Other likely electric vehicle clusters are Charlotte, Raleigh, Cary and Asheville, North Carolina; Orlando and Tampa, Florida; Indianapolis, Indiana; and Austin, Texas.
The increased demand is analogous to the advent of air conditioners in the 1950’s and 60’s, and utilities companies are doing their best to be ready. “Electric vehicles have the potential to completely transform our business,” says David Owens, executive vice president of the Edison Electric Institute, a trade group.
But many expect a bumpy road at first. Transformers that distribute power from the electrical grid to homes are often designed to handle fewer than a dozen. Extra stress on a transformer from one or two electric vehicles could cause it to overheat and fail, knocking out power to the block.
The “nightmare” scenario, according to Austin Energy’s Rabago: People come home from work on a hot afternoon, turn on the air conditioner and the plasma television, blend some frozen cocktail, start cooking dinner on an electric stove —and plug their car into a home charging station. Auto executives say it’s inevitable that utilities will experience some difficulties early on. “We are all going to be a lot smarter two years from now,” says Mark Perry, director of product planning for Nissan North America.
“It’s like you’re about to have a baby,” says Duke Energy’s Rowand. “You know it’s going to be good, but you also know there’s going to be some throw up and some dirty diapers, and you just hope that it’s something you are prepared for.”
Read the entire article here.
Retail fuel margins were a key factor in the financial results reported by TravelCenters of America for the three months ended September 30, 2010. Highlights of the report:
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The report doesn’t explicitly list the retail fuel margins per gallon, but if average fuel prices were in the $3/gallon range, that would equate to a $.17 to $.18 margin per gallon.
The report listed one primary reason for the improved retail fuel margins as being a greater number of days of declining fuel commodity prices throughout the third quarter of 2010, as compared to the same quarter of the prior year. “Although other factors have an effect, retail fuel margins per gallon tend to be lower during periods of rising fuel prices and higher during periods of falling fuel prices” the report said.
