The Importance of Accurate Data in Rack Pricing

How can your wholesale fuel company attain prosperity in the dynamic world we are all facing? The world economy has seen dramatic shifts due to the COVID-19 pandemic, and few industries have felt this impact more than the oil and gas industry. Optimizing rack pricing data is one way wholesale fuel buyers have faced the challenge.

Coming out of the pandemic, it is more important than ever for businesses to use every advantage available to maintain and grow profit margins. By utilizing insights gained from processing over 80% of all refined fuel lifts in the United States, DTN is poised to help fuel buyers rethink their analytics strategy.

DTN Refined Fuels Demand offers an unprecedented view of the entire marketplace, delivering trusted, location-specific data, plus the context clients to make decisions with confidence.

Don’t be caught off guard with unpredictable spikes in daily rack demand. Use our comprehensive data feed customized to your business needs and location. You will have a clear view of the impact fuel demand fluctuations have on your business and the ability to make informed decisions accordingly.

What is the rack price, and why is it essential for buyers?

Understanding rack prices is essential for wholesale fuel buyers. Rack prices are essentially the price of either gasoline or diesel at the terminal, ready for delivery. 

Delivery-ready fuel has been blended with ethanol or other additives and is loaded at the distribution terminal. Rack prices reflect the cost of transportation, terminal fees, and the difference in the contract price for branded or unbranded fuel.

Having access to the most current and accurate rack price data ensures you negotiate the best price available. Wholesale fuel buyers rely on rack price data to make informed business decisions, such as choosing suppliers and drafting contracts. To keep their business profitable despite a volatile market, companies must ensure they use the best available information. 

 

What it means to have better data

It is undeniable how essential data has become for a modern business. However, that same modern business must sift and evaluate multiple sources of interdependent data, making it hard to pinpoint the most critical information that company needs.

Data must come in at the right time – if it comes in too late, the profit window shrinks. On the other hand, if the data comes in on time, but is inaccurate, the resulting decisions would be detrimental to your business. And if you have to sift through irrelevant data to find the actionable insight you need, precious time is lost. Finally, for data to be helpful, it must also be comprehensive. If you only receive one or two standalone points of data, you lack the greater context surrounding the market landscape. Data outside of its context is meaningless.

For data to be effective in your business, it needs to be timely, accurate, comprehensive, and relevant. Let’s look at each of these factors individually and see how they are essential to supporting your business’ profitability.

 

Timely

In our globally connected world, the energy market never stops moving. The old standard of once-daily reports is no longer good enough. You need the most current data to ensure you react appropriately to market changes and take advantage of favorable conditions. 

Ideally, your data should be ready before you are – offering you actionable information at the start of your day. When you’re off the clock, your data should continue to work for you! Instant, current information keeps you up to date, no matter the time of day. 

 

Accurate

As mentioned, timely information is useless if it isn’t accurate. With data gathering and processing, manual errors are often at the root of the problem. Pricing data should be automatically collected, removing the possibility of human error and bias.

In order to identify trends on the cutting edge, large quantities of data must be gathered and evaluated. Outliers, or data points that seem to be outside the average, need to be verified and removed if necessary before they skew results. 

 

Comprehensive

Comprehensive data provides you with abundant information – not just from a few sources. For example, to be confident in your supplier selection and pricing, you need access to a comprehensive list of comparable rack prices across the market. With suitable systems in place, processing such a large volume of data becomes an easy task to produce greater prosperity for your company. 

 

Relevant

There’s a measurement audio engineers and broadcast professionals refer to: the “signal-to-noise ratio.” Briefly, it measures how much of the intended signal is received relative to any other, interfering, signal that could also be transmitted. The lower the ratio, the clearer the signal. 

Data processing has a similar concern: there can be such a thing as “information overload.” If your systems must deal with irrelevant data before the needed data can be revealed, time is wasted. Relevant data ensures that you get the information that matches your unique business needs. DTN can tailor this information according to a variety of factors, but one of the most common is location. 

However, your optimal purchase can also be calculated depending on a set of customizable factors, such as product, quantity, price, freight, surcharges, and more. This helps you see what the “best” rack really is, including even the cost of transportation. While it can seem minor to the general public, in the wholesale market, a difference of just a few cents per gallon adds up, possibly costing hundreds of lost dollars on any given order. 

 

DTN Refined Fuels Demand offers the solutions your business needs

Having access to daily, market-specific demand data has revolutionized decision-making in commodity-based businesses. While year-over-year data will always have value, “nearby” data and city-level data are proving to be critical in successful demand management. 

With DTN Refined Fuels Demand powering your business decision, you will be able to see firsthand the impact accurate data can have on your profitability. 

See for yourself how DTN Refined Fuels Demand can help you:

• Have confidence in your market positions
• Better manage data spend with relevant information
• Successfully integrate demand data into existing systems with a user-friendly API
• Increase margins by maximizing long/short market opportunities
• Eliminate sampling bias and manual errors
• Create data-based, robust, and actionable strategies

Learn more today about the suite of services offered by DTN, or request a demo. It’s time to put the full power of data to work in your business!