SIGMA Brings Key Issues to Capitol Hill
WASHINGTON, D.C. -- Some 60 convenience store operators and fuel marketers concerned about the implications of potential data security breaches on their businesses, as well as logistical impediments to fuel supplies and other key issues, visited the nation's capital July 15-16.
Sponsored by SIGMA: America's Leading Fuel Marketers (formerly known as the Society of Independent Gasoline Marketers of America), the annual Legislative Meeting and Day on the Hill event included a legislative briefing by the law firm Steptoe & Johnson to prepare marketers for their face-to-face meetings with 200 members of Congress.
"Congress has the authority to shape public policies that directly affect our members' ability to compete within the motor fuel industry," said Tom Gresham, president and CEO of Double Quick Inc. and chairman of SIGMA's legislative committee. "It is important for SIGMA members to participate in our Day on the Hill to make our positions known on issues that affect the way we do business."
When meeting with lawmakers, SIGMA members discussed these key issues:
- Legislative initiatives that could unfairly burden retailers with credit-card data security requirements;
- The need for credit card interchange transaction fee reform;
- Logistical constraints that prevent plentiful fuel supplies from reaching the consumer;
- The Renewable Fuel Standard (RFS) and a proposal by the Environmental Protection Agency to adjust RFS requirements;
- The need for adequate funding for transportation and infrastructure improvements; and
- Support for increasing the Affordable Care Act definition of "full-time employees" from 30 hours per week to 40 hours for employer-required coverage.
“The reason I’m here, and the reason why RaceTrac brings a team of people here, is because we have an opportunity to interface with members of Congress in a centralized, highly effective way,” said Max McBrayer, chief supply officer for RaceTrac Petroleum Inc., based in Atlanta.
THE FUTURE OF FUELING
Held in conjunction with Day on the Hill was a panel discussion sponsored by The Fuel Foundation, focusing on trends and financial opportunities. SIGMA established the Fuel Foundation in 2012 to drive change in the fuel marketing industry through research, education and independent studies to promote forward thinking and in-depth analysis on the issues facing fuel marketers each and every day.
The panel featured former Gulf Oil CEO Joe Petrowski, founder and managing partner, Mercantor Partners; Michael Johns, managing director, Food and Consumer Group, BMO Capital Markets; and Ron Gale, director, KeyBanc Capital Markets.
Petrowski predicted declines in crude oil prices over the next few years, perhaps even to $60 per barrel, depending on developments in the Middle East.
Influencing this, he said, is continued urbanization reducing the numbers of cars per household; the graying of America, with older people driving less; vehicle fuel economy improvements; and use of alternative fuels. All of this combined will mean reduced gasoline and diesel consumption in coming years, he noted, advising c-store operators to prepare.
While echoing that fuel volume is declining, Johns noted that consumers are spending more money inside convenience stores. The days of “channel shifting” in cigarette sales are largely over, he said, adding that “best-in-class retailers are already moving away” from their traditional reliance on cigarettes as their primary source of profit.
With major oil companies divesting themselves of branded convenience stores, Johns said there are investment opportunities for c-store operators. “The power seems to have shifted into your hands,” he observed.
Gale discussed industry consolidation trends. “You’ve got to have a plan" when it comes to managing capital and considering acquisitions, he said. “Don’t hesitate to reach out for a consultant.”