In 2005, that figure was 7.2%, [image-nocss] but spiked up to 12.5% in 2008. Percentages from January through August thus far are 14%, she told the group of about 40 conference attendees.
"On the West Coast, midday price changes had been seen for a long time," Duncan said in a session called "Fuel Profits in Today's Volatile Marketplace." "But for the rest of the country [it] was like a 9/11 event."
Midday price changes have also been significant in spread, sometimes as much as 7 cents, where changes historically were fractions of a penny. The trend does not bode well for the retailers, she said. "[Pricing trends are] slow to change, but once it takes off...you'll see it increase steadily."
Revealing numbers from an internal study, Duncan said that petroleum marketers surveyed said 89% see more midday price changes. In addition, 71% believe fuel buying will get more difficult.
At the same time, she said fuel buyers can do more. While 73% watch movement on the NYMEX as a way to track pricing changes, for instance, only 39% follow the spot markets.
Today, retailers face issues including the complexity of product and increasing regulation, changing directions in the way the market moves and the need to drive organizational and culture change to adapt to the current volatility.
Though retailers long for days where they can lock pricing in at the rack and lock in costs at the current prices, she said those in the petroleum retail business have access to solutions that can help them respond. These solutions can help them take advantage of events that, for instance, may make driving a few more miles for product actually more lucrative.
Even logistical issues such as making sure the driver pulls the amount of product ordered or that prices match between headquarters and the terminal. Duncan says as little as $0.005 per gallon savings can mean $10,000 for someone pulling 2 million gallons a year and up to $1.25 million for an operator pulling 250 million gallons a year.
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