by John Keller | Nov 15, 2010 | Retail Fuel Margins
Delek US announced in its 2010 Q3 results that retail fuel margins increased to 19.6 cents per gallon with total gallons sold of 108.2m across their 420 c-store locations. That works out to be 85,873 gallons per month at each store.
Their retail fuel margin of 19.6 cents per gallon is 1.6 cents up from their retail fuel margins for the same quarter last year. Delek attributed their retail fuel margin gains to their E-10 blended fuel program and their strategic fuel price management efforts.
Same store fuel gallons sold increased 5.2% in the quarter. Their total number of c-stores was down to 420 locations from 452 locations the previous year. Delek operates under the MAPCO brand name in the Southeast US, more than half of which are in Tennessee.
These earnings reflect another data point as evidence to a strong 2010 across the retail fuel industry.
by John Keller | Nov 10, 2010 | Fuel Price Management, Industry News
In the November 9, 2011 edition of the US Energy Information Administration’s Short-Term Energy Outlook report, the US government predicts unleaded retail prices to average $2.84/gallon this winter. That’s $.19 per gallon higher than last winter. This prediction is based on a model where West Texas Intermediate crude oil averages $83 per barrel. That’s a $5.50 per barrel increase over last winter. The model includes a 2010 forecasted growth in the US gross domestic product of 2.6%, and 2.2% growth in 2011. World oil consumption is predicted to grow 3.9% in 2010 and 3.3% in 2011.
If the US EIA’s predictions prove to be correct, unleaded retail fuel price averages will be $.02 less than they are as of the week of November 8, 2010.
by John Keller | Nov 10, 2010 | Customer News, Fuel Price Management Solutions, PriceAdvantage
Royal Farms is now using PriceAdvantage as their exclusive fuel price management solution at all 95 stores. With PriceAdvantage, Royal Farms has fully automated their fuel price management system, giving them complete command and control over the Skyline electronic price sign, POS, and pump for all retail fuel price changes. Fuel price optimization now happens in minutes, as Royal Farms headquarters sends the price of the day each morning via PriceAdvantage, and receives a confirmation date and time stamp when the price change is complete.
by John Keller | Oct 19, 2010 | Fuel Price Management, Fuel Pricing Strategy, Industry News
A recent article in the Wall Street Journal quotes Xavier Mosquet, Sr. Director and Managing Partner (Detroit) of Boston Consulting Group, as saying fuel prices must be at $8 to $9 per gallon before electric cars will be cost effective for buyers. This takes into consideration the lack of US government incentives that can’t go on forever. Mr. Mosquet goes on to say that a fuel price of $4 per gallon, with current government incentives, will support electric car sales representing only 5% of the market by 2020.
So why the big push for electric vehicles from auto makers?
- US EPA credits that allow manufacturers to build more profitable luxury cars and trucks.
- California mandates that the top six car manufacturers offer a zero emission model in 2012 or pay severe fines.
As Fuel Managers peer over the horizon to see when electric vehicles should be folded into their fuel pricing strategy, a wait and see attitude may be best for the next five years so as not to get distracted from the core business.
The entire WSJ article is worth reading here.
by John Keller | Oct 13, 2010 | Fuel Pricing Technology, Industry News
Recently three different retailers have announced they’ll be offering charging stations for electric cars. Two of the three are traditional fuel retailers: BP/Arco, and Murphy. The third retailer to announce the charging stations is Best Buy.
BP announced they’ll install 45 high-voltage chargers at various BP/Arco gas stations in Arizona, California, Oregon, Washington and Tennessee. These sites are in cities and states that are part of the federally supported Electric Vehicle project, managed by the charging company ECOtality. The Electric Vehicle Project is operating with a $114.8m grant from the US Department of Energy to install 1100 public recharging stations over a three year period. Installation of these chargers at BP/Arco stations is scheduled to begin in March 2011.
Murphy Oil USA announced they will demonstrate a fast charger station at one of their retail fuel stores in Tennessee. Murphy is working with Eaton Corporation to use the Tennessee store as an initial test of the quick charger before looking at expanding their reach to Murphy’s other 1000 locations.
The current expectation is that the BP/Arco stations will charge a set dollar amount for two to three minute increments. Their fast chargers will be able to give an electric car 12 to 15 miles worth of power every five minutes. That means their chargers will be able to recharge the Nissan Leaf in 26 minutes.
Best Buy will offer lower volt charging stations at their stores, where it will take one hour’s worth of charging to provide the same 12 to 15 miles worth of power. Best Buy is considering offering the charging stations through a club membership or frequent-purchaser program.
by John Keller | Oct 12, 2010 | Fuel Price Management, Fuel Pricing Strategy, Industry News
In today’s US Energy Information Administration release of the latest weekly retail fuel prices, the average national price for all grades rose more than $.08 per gallon from the previous week. That’s the largest price increase in over six weeks.
The average national price of regular unleaded fuel rose from $2.73 to $2.81. Regional unleaded fuel prices ranged from a weekly increase of $.11 per gallon in the Central Atlantic states, to $.10 per gallon in New England, to $.06 per gallon on the West Coast. All regions of the country saw prices increase with the exception of the Rocky Mountains, which remained essentially unchanged at $2.79 per gallon.
Particularly hard hit was the city of Cleveland, which saw an increase of $.14 per gallon to $2.86. Across the country, the most expensive local averages for Unleaded was in San Francisco, with a price of $3.12 per gallon, up from $3.04 the week before. The lowest local averages for Unleaded were reported in Houston at $2.64, up $.08 from the previous week.
by John Keller | Oct 5, 2010 | Fuel Price Management, Fuel Pricing Strategy, Industry News
Just how important is the c-store industry to the American economy, and the retail fuel industry specifically? Take a look at these statistics from an article in the Atlanta Journal-Constitution, as reported by NACS Online:
- There are 144,500 convenience stores in the USA as of 2010
- Total convenience store US sales for 2009 was $511 billion
- The average convenience store selling fuel sees 1,100 customers per day
- Convenience stores have an 80 percent share of the gasoline market
On a related note, in a Balvor/NACS Motor Fuels Retail Survey, fuel retailers surveyed sold an average of over 125,000 gallons of fuel per month.
Clearly the c-store industry plays a critical role in the daily lives of American consumers.
by John Keller | Oct 1, 2010 | Retail Fuel Margins
Marathon Oil reported in their quarterly financial earnings statement a 26% increase in retail fuel margins. Gasoline and distillate gross retail fuel margin per gallon averaged 13.28 cents in the second quarter of 2010, compared to 10.51 cents in the second quarter of 2009.
This earnings report is more good news in a long line of positive reports from c-store companies who are reporting increased retail fuel margins in 2010. At this rate, 2010 will go down in the history books as a blockbuster.
by John Keller | Oct 1, 2010 | Fuel Pricing Strategy, Industry News
The market research firm NPD Group reports that convenience store traffic and sales were up for the quarter ending June 2010 compared to a year ago. Convenience store traffic was up 8% and sales increased 11% over 2009. This is a reversal in the trend from 2009, when the number of visits was down.
The report is based on tracking the behavior of 49,999 convenience store shoppers in the USA. Over an average 30 day time period in the second quarter, the average number of visits customers made to a convenience store rose from 6.1 visits in 2009 to 6.4 visits in 2010.
The number of pay at the pump visits to buy fuel only are virtually the same year over year, while visits to purchase at the store only are increasing. The number of visits to buy both fuel at the pump and items in the store are declining. Consumers say the top two reasons for visiting convenience stores remain “convenience location” and “in-and-out-quickly”.
The research was reported by National Petroleum News at http://bit.ly/b2UBLA.
by John Keller | Sep 14, 2010 | Fuel Price Management, Fuel Price Optimization, Retail Fuel Margins
According to NACS Online, demand for Diesel fuel in the US is on the rise, while demand for E85 is on the decline.
While still not at its 2006 peak demand where it reached 4% of the fuel market, demand for Diesel this year is back up to 2.2% of the market, with a projected increase of 2.9% by 2013.
Meanwhile, E85 has fallen from its 2008 peak down to 1.4% market share this year. Supporters of E85 explain the decrease on what they see as a standard cyclical pattern of E85 fuel use, impacted by the relative price of gasoline.
While these statistical numbers are valid across the US as a whole, each Fuel Manager must carefully monitor trends of Diesel and E85 on a market by market basis. For example, the largest US branded retail chain of E85 is Cenex, and they report a 20% increase in E85 this year. In Minnesota, however, E85 is down 25% from its peak level in 2008.
Only by carefully monitoring trends in in each of his markets can the Fuel Manager be sure his Fuel Price Management strategies are being successful.
