Despite the Upheaval Caused by COVID-19, Seasonality Still Dominates the Refining Cycle and Turnarounds

 Global Planned Refinery Turnarounds (in 1,000s of barrels of capacity offline)

What Does This Mean for Gasoline Retail Marketers?

Retail gasoline marketers have a seasonal problem. The robust profit margins they often enjoy in the late autumn and winter can deteriorate as spring arrives. This spring margin squeeze does not occur every year, of course, but the pressure on profit margins between New Year’s Day and Memorial Day can be severe.

Wholesale gasoline inventories usually peak in the last few weeks of February. Refineries perform maintenance, also known as turnaround, during late winter/ early spring. Spring turnaround reduces refining capacity just when the market begins to anticipate an increase in gasoline demand due to the summer driving season.

This causes gasoline prices at the terminal to move higher. When this happens, retailers’ street margins get squeezed.

What can you do about it?

The gasoline retailer can establish hedge positions to offset this expected margin squeeze. POWERHOUSE works with clients across the country to develop customized strategies to protect margins.

Each company operates in unique conditions, so call us to discuss how we can help your business protect your margins and grow your business.

For more information,

contact David Thompson

at david@powerhousetl.com

or (202) 333-5380