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gasisoutrageous

6 Indiana Gas City locations to pull

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Hey Dan,

 

I was browsing the Indiana page and I noticed that Gas City was still listed for six locations. Doing some sleuthing, I found that 4 of them were bought by Speedway and had the E85 tank converted to racing fuel (heaven knows why), and two of them went to other brands which yanked E85.

 

Thanks Dan.

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I'm thinking the profit margins are probably quit high on racing fuel vs E85

Oh no doubt, they are. At 7 bucks a gallon, you better believe that racing fuel is profitable. But, part of the issue was the UL listed E85 hoses that Speedway had needed. When they acquired Gas City in 2011, Speedway hadn't obtained this yet. But a number of other things are different now as well:

 

-The "blend wall" was not nearly as loud of a debate in 2011 and 2012 as what is has been since last fall.

-In the link I posted about Speedway's focus on alternative fuels a few weeks ago, they mentioned that they see E85 as immensely profitable. Tony Kenney, the company's president, stated that there still remain many logistical and legal questions concerning E15... not so with E85. All of Speedway's concerns about E85 seem to have been addressed, which was not the case in 2011.

-Speedway had only begun to experiment with E85 in the years prior, so they weren't sure enough that they knew how they would streamline the process of getting E85 to their stores, or how to price it.

-We've also discussed how more sales of a product with lower margins is often more profitable for retailers than a product with high margins but lower sales. E85 demand has significantly increased since I graduated high school in 2011. Heck, you could say this is the case simply because I wasn't able to use E85 then!  :lol:

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