ST. PETERSBURG, Fla. — National regular gasoline retail margins hit nearly 30 cents per gallon (CPG) for the month of July, placing them just short of year-ago levels. By the end of July, they beat the monthly average.
In the latest C-Store Grab-N-Go research note by Raymond James & Associates, St. Petersburg, Fla., analysts crunched financial results for chains in a coverage area that includes Casey’s General Stores, CST Brands, Murphy USA, CrossAmerica Partners, Sunoco LP and TravelCenters of America. The team found margins increasing toward the end of July as retail prices fell slower than wholesale costs (which were off about 16 CPG over the five-week period ending Aug. 3, 2015).
National margins for the five weeks ending August 3 averaged 3.5 CPG or 14% below year-ago July levels. Sequential from June, margins averaged 23 CPG, up 22% or about 4 CPG. In the last two weeks of the month of July, retail gasoline margins rose above year-ago levels. Most regions of the country saw healthy margin growth from a prior-month perspective. Of note:
- In the Southeast, home to Murphy USA, margins fell 17%, or 4 CPG year over year. From a prior-month perspective, they rose about 4 CPG to 19 CPG for the five weeks ending August 3.
- Fuel margins in Texas, where CST Brands is based, fell about 3 CPG or 14% year over year (CST had reported a 12% year-over-year drop in its July margin to 23 CPG).
- While Midwest fuel margins were off about 13% year over year, from a prior-month perspective, they rose 15%, or around 3 CPG, to hit 23 CPG. (Iowa-based Casey’s General Stores had reported margins greater than 16.7 CPG in the June/July time period).
National diesel margins for the five weeks ending August 3 averaged 32% above year-ago levels and grew 25% sequentially from June.
Raymond James analysts expect margins to moderate for the group in August and September, as oil price declines slow down. For the group of companies covered by the firm in aggregate, Raymond James projects third-quarter margins ending higher seasonally from the June quarter. Year over year, it projects a 2.3-CPG decline in national fuel margins, or off 12%, with only a 1-CPG quarter-to-date decline.