Weakest Margins in More Than Two Years
February retail fuel margins declined as whole sale costs grew
NEW YORK -- Estimates of February fuel margins by publicly owned convenience-store companies show retail gasoline margins declined as wholesale costs edged higher, with the last week of February the weakest margins in more than two years.
"National fuel margins averaged 12.2 cents per gallon (CPG) for the month of February, down approximately 0.6 CPG year over year, and were sown 1.3 CPG below the three-year average of 13.5 CPG," Morgan Keegan reported in its "Monthly Grab-N-Go" research note for February. "Fuel margins were strongest in week 1 of the month, which reached an average of 13.5 CPG."
Year-over-year comparisons show fuel demand has fallen through 2012 thus far, based on U.S. Energy Information Administration (EIA) data, declining 4.9%, 6.8% and 7.8% in December, January and February, respectively; however, the most recent miles-driven data from the Federal Highway Authority (FHWA) shows an increase of 1.4% year over year for the month of December.
The investment-banking firm estimates the following margins for February:
- Casey's General Stores: 14.0 CPG for Q4 (April) 2012 vs. 13.6 a year ago.
- Delek US: 12.8 CPG for Q1 2012 vs. 12.2 a year ago.
- The Pantry: 11.5 CPG for Q2 (March) 2012 vs. 13.0 a year ago.
- Susser Holdings: 12.5 CPG for Q1 2012 vs. 12.7 a year ago
- TravelCenters of America: 12.4 CPG for Q4 2011 vs. 13.3 a year ago.
Estimates of January fuel margins by publicly owned c-store companies showed gasoline margins for the month decreased 15% compared to the previous year, indicating a downturn with the new year.
"[CPG] declined as retail prices held while wholesale costs edged high, seemingly ignoring weak demand fundamentals," Morgan Keegan reported in its "Monthly Grab-N-Go" research note for January. "January/February typically mark low points for fuel prices, a discouraging implication for 2012 with prices [nearing $4 per gallon]."
National fuel margin averaged 12.9 CPG for the month of January, down approximately 2.3 CPG year over year. But margins were 0.3 CPG above the three-year average of 12.6 CPG, Morgan Keegan reported.
The firm estimated the following margins for January:
- Casey's General Stores: 14.0 CPG for January 2012 vs. 13.9 a year ago.
- Delek US: 12.8 CPG for December 2011 vs. 13.1 a year ago.
- The Pantry: 11.5 CPG for Q2 2012 vs. 13.7 a year ago.
- Susser Holdings: 18.0 CPG for December 2011 vs. 15.0 a year ago
- TravelCenters of America: 12.4 CPG for December 2011 vs. 11.9 a year ago.