Wednesday, May 13, 2015

Fuel Competition in California

Reporter and editor Landon Hall, writing for Fuel Freedom, says:

If you were to build a gas station today, from the ground up, you’d scribble out a list of the types of fuel you’d want to offer your customers. At the top, of course, would be regular 87-octane unleaded gasoline, which contains 10 percent ethanol. But next on the list likely would be E85 ethanol blend.

That’s right: Cheaper, cleaner-burning E85 might just be a hot seller, if you did it right. Mike Lewis, co-founder of Pearson Fuels in San Diego, has been selling it for 12 years, and he knows there’s a customer base out there for it. Last month he sold more than 34,000 gallons of E85 at his flagship station, accounting for 20.7 percent of his overall fuel sales.

Customers consistently buy more E85 at the station than mid-grade gas (89 octane), premium (91) or diesel combined.

“The reality is that there are flex-fuel vehicles everywhere, all over California, roughly 5 percent of the vehicles,” Lewis said. “So if you have a gas station, and you’re selling a lot of gasoline, then you can sell a lot of E85.”

Pearson supplies about 60 fueling stations with E85 and is partnering with station-retailer G&M Oil to put the fuel in 13 new stations in Southern California over the next year. The expansion is part of a national trend: Since 2007 the number of stations selling E85 has more than doubled, to about 3,000 today, roughly 2 percent of the nation’s total stations. E15 ethanol blend also is spreading across the country: Georgia got its first pumps Friday, and retailer Kum & Go added the fuel at its station in Windsor Heights, Iowa, and plans to introduce it at 60-some more over the next two years.

There are ample vehicles on the road that are ready to take the fuel: more than 17 million flex-fuel vehicles that can run on ethanol blends up to E85, including 1 million in California. And more customers are taking advantage of the many benefits of ethanol, including lower emissions and the fact that it’s made in the U.S.

Read the rest: Gas Stations Are Adding Ethanol Because It's Good For Business.

What is the difference between robust and feeble fuel competition? Find out here.

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