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Price Still #1 for Consumers – Opportunity for Ethanol

March 10, 2015


It should come as no surprise that price remains the number one consumer concern when thinking about fuel, as Americans spend on average 5% of their household income on fuel. Because of this concern, consumers have become savvier when shopping for fuel, often utilizing new mobile apps and discount cards, as well as tracking prices along their commutes. In January, the National Association of Convenience Stores (NACS) unveiled their 2015 NACS Consumer Fuel Survey. The results show that when consumers were asked "When buying gas, which of the following factors is most important to you?" price topped the list at 71%, followed by location of store/station at 18%, brand at 8%, ease of entrance or exit at 3%, and other at 1%. NACS also found other trends that show consumers place a high priority on pricing:

  • "Approximately two in three consumers consistently shop on price, whether gas was as low as $1.62 per gallon in 2009 or as high as $3.28 per gallon in 2013. Even after the sharp gas price declines over the past few months, consumers still price shop for gasoline."
  • " do price-sensitive consumers shop by price? The traditional gas price sign remains the most common method...Loyalty cards remain a strong second choice..."
  • "Nearly half of all consumers have a preferred gas station or chain (48%), and not surprisingly, the main reason is lower prices."
  • "Of those ages 18-34, 82% would seek out debit card discounts and 78% would seek cash discounts."
  • Beyond payments, consumers also would go out of their way to save money on their gas purchases. Nearly two in three say that they would take a left-hand turn across a busy street (64%) or drive 5 minutes out of their way (63%) to save 5 cents per gallon.
  • "...more than one in three consumers say that they would drive 10 minutes out of their way to save 5 cents per gallon. While it might feel good to find a "deal" on gas prices, the action is a money-losing proposition, even with gas prices hovering around $2.20 per gallon."
This cost-conscious consumer thinking provides an excellent opportunity for ethanol-blended fuels, which are typically priced below regular unleaded. The key to successful utilization of these fuels is making sure consumers understand their options and are conscious of the often lower prices that accompany ethanol-blended products. RFA understands the need to provide information in a clear and easy to use manner and has continued building on its already existing slate of websites and mobile applications by purchasing and However, these applications and websites are only beneficial if stations offer their consumers access to these higher-level ethanol fuel blends. Today, the most popular fuel sold by fuel retailers is regular unleaded, which — in nearly all cases — includes 10% ethanol. However, if retailers would consider adopting E85, E15 or other mid-level blends, their opportunities for more customers immediately climb. These ethanol blends have proven that they can quickly outpace the sales of premium and midgrade, and ultimately dip into the regular unleaded sales. Some E15/E85 retailers even report that the combined sale of these two ethanol-fuel blends now make up over 25% of their total fuel volume. I have heard retailers claim that no one has asked them to offer higher-level ethanol blends. Let's take away that excuse.