ST. PETERSBURG, Fla. -- First-quarter 2015 national retail gasoline margins beat expectations slightly, averaging around 18 cents per gallon (CPG), according to the latest C-Store Grab-N-Go research note by Raymond James & Associates. This represents a 40% decline sequentially from the 31-CPG margin of fourth-quarter 2014, a 10-year high. It was 13% higher than the year-ago quarter.
March national retail margins for regular gasoline were on average 30% higher than year-ago levels, and an improvement from February, which saw a five-year low, said St. Petersburg, Fla.-based Raymond James. National retail diesel margins for the quarter about doubled year over year, if 3% lower than fourth-quarter 2014.
That being said, Raymond James is modeling first-quarter 2015 margin 9 CPG lower than fourth-quarter 2014 for the group of publically owned convenience-store chains it covers in aggregate, which includes Casey’s General Stores, CST Brands, Murphy USA, TravelCenters of America and fuel distributors CrossAmerica Partners LP and Sunoco LP.
“While the 1Q margin capture may exceed our expectations for the group and lower fuel prices present a potential demand catalyst, we remain neutral across the majority of our convenience retail coverage given what we see as limited multiple expansion from near-record valuation levels and risk of fuel margins compressing while lapping record (or near-record) year-ago margins 2H15,” the Raymond James report said.
Regionally, the Midwest, West and Northeast saw fuel margins expand over year-ago levels by 8%, 37% and 17%, respectively, during the quarter. In the Midwest, where Casey’s General Stores is located, March margins rose about 3 CPG year over year, or up 18%, and grew 8 CPG sequentially from February to reach 19 CPG, Raymond James reported.
The Southeast and Texas were relatively flat compared to year-ago levels. In the Southeast, reflective of Murphy USA’s performance, margins rose about 4 CPG year over year and 8 CPG sequentially to reach close to 15 CPG. In Texas, where CST Brands is based, margins for March rose about 1 CPG year over year, or up 11%, and grew more than 4 CPG from February to hit 12 CPG.
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