Being a buyer in the downstream oil and gas industry isn’t always easy and finding the right product at the right time and location is even harder. While your task is difficult, there are ways to improve the process and ensure you don’t leave money on the table. Here are three fundamentals to help reduce your risk and optimize your fuel buying.
1. Strike a balance
Before you purchase product, check prices in that location and the surrounding areas. Having accurate, real-time pricing information at your fingertips allows you to see opportunities in the market that you might have otherwise missed. It also keeps you informed on the current market rate of fuel. Visibility into your allocations with supply partners at any given time is also critical.
Striking a balance between taking advantage of opportunities in the market based on your current allocations and leveraging the best available price while maintaining your supplier relationships is one of the keys to success.
2. The right amount at the right time
Avoiding overpaying for product or overbuying product that you end up being unable to move, resulting in lost margin, is the name of the game. Understanding fuel demand is vital to maximizing every opportunity that presents itself. You need data that shows you the overall market demand and volume in near real-time — not just information based on your internal systems.
Access to on-the-spot gasoline consumption insights will help you better understand your position and allow you to act on opportunities quickly.
3. You get what you pay for
It seems like a simple concept, right? Unfortunately, we know it’s not always that easy. There is science involved. The critical question is the temperature of the fuel itself at the time of purchase. In a recent survey of 11 terminals in the Dallas area, we found discrepancies of more than 50 gallons of fuel per load. Considering the number of loads lifted in the area, that’s a significant amount of money.
To ensure you are getting the best price for your product — and not losing precious margin — it’s important to utilize terminal product temperature data.
Better data = profitable decisions
Fuel buying is a complex process, but with the right tools and insights, it gets easier. Access to a complete and accurate set of data that provides a macro view of the environment, such as pricing information, fuel demand data, and terminal product temperatures, will empower you to make confident decisions that protect your margin.