Gasoline Margins Dive Following Slow May Increase

Raymond James predicts lower CPG for most major petroleum retailers

Steve Holtz, Editor in Chief, CSP Daily News

ST. PETERSBURG, Fla. -- National retail fuel margins for regular unleaded gasoline were nearly 40% above levels in May for the four-week period ended July 1, according to a Raymond James research report.

"Despite the improvement, margins in June averaged 4% lower year over year at 23 cents per gallon (down about 1 CPG [year over year])," the report said. "Diesel margins for the month averaged 28% lower year over year at 30 CPG (down from an abnormally high margin of 42 CPG last year)."

The report said that the rise in oil prices through mid-July "has been taking a toll on margins across the country, with margins nationally cut to one-third levels seen two weeks earlier."

Meanwhile, the most recent data available from The Federal Highway Administration (FHWA) shows miles driven during April and May increased 1.2% and 0.9% year over year to approximately 251 billion and 262 billion vehicle miles, respectively.

Using this information, Raymond James is predicting lower margins during the second quarter for the major public convenience store retailers:

  • The Pantry, Cary, N.C.: Raymond James lowered its fiscal 3Q CPG estimate on The Pantry to 13.5 CPG (from 15.5), representing a 1 CPG or 8% decrease year over year.
  • Susser Holdings, Corpus Christi, Texas: The analyst lowered its 2Q fuel-margin estimate from 24.0 to 22.0 CPG.
  • TravelCenters of America, Westlake, Ohio: Raymond James lowered its 2Q fuel-margin estimate from 18.0 to 17.5 CPG (-0.7 CPG or 4% year over year).
  • Casey's General Stores, Ankeny, Iowa: Raymond James is maintaining its fiscal 1Q (ending July 31) fuel-margin estimate of 19.0 CPG (up 4.1 CPG year over year.

St. Petersburg, Fla.-based Raymond James is one of the leading equity offering and advisory practices in investment banking today. Since 2009, it has participated in raising nearly $400 billion in capital for its corporate clients. During this same time, it has completed more than 170 merger and acquisition (M&A) advisory assignments.

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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