/// Guest post by contributor Jon Scharingson, Renewable Energy Group
Earlier this year I had the opportunity to visit with Denton Cinquegrana, chief oil analyst for the Oil Price Information Service (OPIS), to talk about the trends he’s expecting in the fuel industry in 2015 and what the impact will be on fuel retailers.
Falling oil prices have already received attention, but the American public really took notice of the trend late last fall when a convenience store in Oklahoma set the price of regular gasoline at $1.99 per gallon.
While that was an anomaly — the statewide average at the time was about 50 cents per gallon higher — it drove home the reality that gas was the cheapest it had been in half a decade.
Those low prices have continued into 2015, and not just for gasoline. Diesel may sometimes fall in the shadow of gas, but its price also is declining and demand from consumers is increasing.
Here are five trends Denton expects to see in 2015:
- Experts at OPIS and the U.S. Energy Information Administration are forecasting that fuel prices will continue to fall. Cinquegrana says the traditional springtime increase will still occur for gas, but he expects low prices to be lower this year compared with 2014 and high prices not to be as high.
- Profit margins for c-stores and travel centers will return closer to normal after many experienced margins up to three times higher than usual last fall.
- With fuel prices so low, lawmakers in some states may view now as a good time to tackle the controversial issue of raising motor fuel taxes. Iowa recently increased its motor fuel tax.
- Diesel prices are starting to drop precipitously too, and demand for diesel will continue to climb as gasoline consumption decreases. “Stations that do not offer diesel will possibly miss out on the potential to move more gallons … and capture even higher margins,” Cinquegrana says.
- With biodiesel’s reputation as a high-tech alternative fuel and the public’s desire to have more environmentally friendly vehicles, it is “making big strides,” Cinquegrana says.
To learn more about these trends, listen to this video interview with Denton:
/// Read more guest posts on biodiesel posts here.
{Guest Post} Guest post provided by NATSO Chairman's Circle member Jon Scharingson, Renewable Energy Group. Renewable Energy Group® is a leading North American biodiesel producer with a nationwide distribution and logistics system. With more than 210 million gallons of owned/operated annual production capacity at biorefineries across the country, REG is a proven biodiesel partner in the distillate marketplace. Learn more about Renewable Energy Group.
The opinions and advice given by guest post contributors are not necessarily those of NATSO Inc. The posts should not be considered legal advice. Qualified professionals should be sought regarding advice and questions specific to your circumstances.
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