We’ve all seen the trend and heard the rumors surrounding spikes in gas prices around Memorial Day, July 4th, and Labor Day; but are those rumors and trends true? If they are true, what causes spikes in gas prices at those specific times throughout the year and how can your business best manage these occasions?
Out to Get You?
Your customers should not worry that the entire industry is out to get them. In fact, the reality is quite the opposite. The increase in price is purely due to a seasonal increase in demand. Memorial Day, for example, signifies the first day of summer for most the population, and it also kicks off a lot more driving.
It should come as no surprise that Memorial Day weekend is a big travel weekend. The kids are out of school and many adults taking an extended weekend from work; road trips are common. The increase in price is simply a result of increased demand for gas.
According to NACS Online, “In six of the past 17 years (35% of the time), the seasonal peak took place between May 9 and May 24.” That peak, unfortunately, is hitting just in time for most Memorial Day celebrations.
This up and down wave that customers see reflected in the price at the pump is all just a part of how crude oil is refined. NACS Online reports,
“The blends of gasoline used in the summer months are different than the blends used in the winter. In the winter, fuels have a higher Reid vapor pressure, meaning they evaporate more easily and allow cars to start in colder weather. In the warm summer months, these evaporative attributes would lead to increased emissions and the formation of smog.”
Most consumers aren’t aware that the petroleum industry switches over from winter-blend fuels to summer-blend fuels in February and continues those processes through June (when they then switch back to winter-blend processes).
This is not an act done to dig into the wallets of consumers, but merely a way to give better performing blends of gasoline to consumers based on the needs of the season. These processes have different costs associated with production which are passed on to you, the gas station, and are ultimately reflected at the pump as well.
How to Prepare For It
There are some things you can do during these time frames to cushion the blow of rising gas prices for your customers. While you can’t see the future, and know exactly what the cost of fuel is going to be; you can lessen the impact in some ways.
While customers will never enjoy a price increase, you can mitigate their frustrations with savings clubs or loyalty programs. If a customer is already saving a certain amount per gallon or per visit; a temporary hike in price won’t be as impactful on their wallet.
You can also plan promotional activities around high-travel holidays such as a complimentary or discounted beverage with fuel purchase. The volume may be there anyway due to the occasion, but customers have choices. Give them a reason to choose you!
In general, when prices are high; customers are more likely to be discerning in their gas station choices. It’s likely your competitors will also be raising prices so it’s a good idea to give customers an extra nudge in your direction.
Of course, the opposite is also true. Lower prices are a great incentive for customers. A little something extra only sweetens the pot!
Managing Your Fuel
Understanding these trends is a step towards anticipating them. And that will help you better prepare for the future. By utilizing effective fuel management software such as CStorePro, you can have access to a world of information to help you control and track your fuel.
From simple tank reconciliation to profit statements and pool margins; knowing your supply and your cost can go a long way toward preparing for a change in price. What’s more, CStorePro allows you to adjust fuel prices from anywhere with our cloud-based fuel management software.
Knowing and tracking is half the bottle of any inventory an supply system. Don’t get caught unaware! To learn more, today with one of our c-store experts.