December 3, 2020 | Vol. 70, No. 24

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In This Issue

Dear PEI Member:

Each fall, PEI surveys our members on business and industry trends. Here are some of the key results from this year’s survey:

  • COVID-19: 47% of survey participants reported at least one confirmed COVID-19 diagnosis on their staff.
  • PPP loans: 76% of distributors and contractors and 63% of manufacturers obtained Paycheck Protection Program (PPP) loans.
  • Revenue: 52% of distributors and contractors and 44% of manufacturers reported revenue increases.
  • Net profit: 59% of distributors and contractors and 44% of manufacturers saw their net profit grow.
  • Retail work: Jobs at retail fueling facilities accounted for 58% of distributor and contractor revenue — up from 52% in 2019.
  • 3D printing: 56% of manufacturers now use 3D printing technology — up from 20% last year.
  • Aging underground storage tanks (USTs): 19% of distributors and contractors reported accelerating UST replacement work. The recently released UST Finder tool from the U.S. Environmental Protection Agency (EPA) shows: 198,731 USTs installed between 1988 and 1998 remain open in the U.S; and an average of 16,338 USTs will reach the end of their 30-year warranty each year from 2021 to 2030.
  • EMV forecourt upgrades: 49.5% of the roughly 25,000 retail sites survey participants oversee have completed EMV forecourt upgrades; 43.3% have not yet placed upgrade orders.
  • EV charging stations: Distributors and contractors offering electric vehicle (EV) charging station installation and service tripled this year — from 7.9% to 24.1%.
  • E15: 23% of PEI members anticipate at least a moderate increase in the number of retailers offering E15. That’s up from 17% last year.
  • Member optimism: 81% of distributors and contractors and 77% of manufacturers are extremely or moderately optimistic about business prospects for the next three years.

The “State of the Industry” address during the 2020 PEI Virtual Convention & Expo included an in-depth analysis of these and other findings. If you missed the live event, you still can register to view all content, including the State of the Industry, on demand through Dec. 31.

PEI Business Outlook Survey Results

Forecourt Payment Developments

2021 PEI Priority Club Launches

FFV Models Decline, E15 Approvals Rise

PEI/RP800-20 Released

PPP Tax Benefits Reduced

 

 

 

 

 

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by e-mail to the editor, Rick Long at rlong@pei.org

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FORECOURT PAYMENT DEVELOPMENTS
Four fuel brands recently announced major forecourt payment initiatives.

  • Sunoco is offering cash incentives to the first 2,500 branded stations that complete forecourt EMV upgrades by Feb. 28, 2021 — well before the April 2021 liability-shift deadline. The earliest stations to convert will receive $2,000. Those that complete the work later in the incentive period are eligible for as much as $500. 
  • Chevron U.S.A. launched incentives for EMV upgrades completed by March 31, 2021. The incentives are based on annual fuel volume. Stations selling less than 600,000 gallons per year can receive $2,000. Facilities that sell more than 2.4 million gallons per year are eligible for as much as $10,000.
  • Phillips 66 customers now can use the Google Pay app for fuel purchases at the company’s 7,000 Phillips 66, Conoco and 76 stations.
  • ExxonMobil enabled Google Pay for fuel purchases at 11,500 U.S. retail locations.

Members participating in PEI’s recent business outlook survey predict that in five years, contactless mobile payment will account for 27% of all fuel purchases.

2021 PEI PRIORITY CLUB LAUNCHES
PEI began accepting applications for the 2021 Priority Club last week. Thank you to the first 12 members who have signed up to be part of this special group:

Gold

Silver

Bronze

PEI will announce additional 2021 Priority Club members in future TulsaLetter issues. In return for their extra financial commitment to PEI, Priority Club members receive added recognition and benefits throughout the year, including early booth selection for the 2021 NACS Show. To learn more and apply for Priority Club membership, email Tom Leibrandt. 

2021 FFV MODELS DECLINE, E15 APPROVALS RISE
The Renewable Fuels Association (RFA) reported that the 2021 light-duty fleet includes only 11 flexible fuel vehicles (FFVs) from two manufacturers (Ford and GM). In 2015, eight vehicle manufacturers offered 80 FFV models.

According to RFA’s analysis, light-duty vehicle manufacturers approve E15 for nearly 95% of all 2021 models. That’s up from 89% three years ago. Only Mercedes-Benz, Mazda, Mitsubishi and Volvo — which collectively represent less than 6% of sales — do not authorize E15 in their vehicles.

PEI UPDATES BULK PLANT RP
The 2020 edition of PEI/RP800: Recommended Practices for Installation of Bulk Storage Plants is available for purchase.

PEI/RP800-20 consolidates published and unpublished best practices on the construction of petroleum bulk-storage systems, including underground, aboveground, atmospheric and shop-fabricated tanks, associated piping, diking, and spill containment equipment.

The document’s practices will help distributors, contractors, owners and operators maximize system efficiency; prevent surface and groundwater contamination; minimize environmental hazards; reduce safety hazards; and avoid needless installation costs.

Public comments this summer yielded no recommendations for major changes to the 2013 edition. The 2020 edition includes updated references and revisions approved by the PEI Bulk Plant Installation Committee to conform to current PEI style guidelines.

Learn more and order PEI/RP800-20 here.

PPP TAX BENEFITS REDUCED
The Internal Revenue Service (IRS) ruled Nov. 18 that expenses covered by PPP loans are not deductible this year if “the taxpayer reasonably expects to receive forgiveness of the covered loan … even if the taxpayer has not submitted an application for forgiveness of the covered loan by the end of such taxable year.”

PEI members who received a PPP loan in 2020 should discuss this ruling with their tax advisors.

Today, PEI joined 563 other trade associations in a letter urging congressional leaders to reverse the IRS policy before Dec. 31. The letter states, in part:

“Included in the CARES Act was a provision stating that any portion of a PPP loan that qualified for loan forgiveness ‘shall be excluded from gross income’ for tax purposes. This tax-free treatment of any forgiven loan amount was a key provision in the law and featured prominently in the debate leading up to and following the legislation’s enactment. … The effect of [the IRS) ruling is to transform tax-free loan forgiveness into taxable income, raising the specter of a surprise tax increase of up to 37 percent on small businesses when they file their taxes for 2020.”

BRIEFLY NOTED
“Ontario is moving to phase in the mandatory sale of gasoline with 15% renewable content — such as ethanol — over the next 10 years, making it the first province in Canada to require the higher blend. Under rules revealed last week, the province will raise the current 10% renewable content requirement to 11% in 2025, 13% in 2028 and 15% in 2030. The province had begun mandating 10% renewable content in January.” — Oil Express Alert, Dec. 1

“Plug-in hybrid cars put out far more CO2 in real-world driving than in tests that determine emissions compliance and ratings advertised to consumers, according to a group urging governments to roll back support for such models. Three of the most popular plug-in hybrids — BMW’s X5, Volvo’s XC60 and Mitsubishi’s Outlander — exceed their advertised carbon-dioxide emissions ratings by as much as 89% when tested on a fully charged battery, Brussels-based Transport & Environment said … .” — Bloomberg, Nov. 23

“General Motors Co. is laying the groundwork for a bigger bet on electric vehicles, telling investors at a virtual conference it plans to boost spending on them by more than a third to US$27 billion as part of a push to introduce 30 battery-powered models by 2025. The initiative outlined Thursday represents an increased investment of US$7 billion and 10 more EVs than previously planned, including some that will be cheaper than US$35,000. The announcement comes as rival automakers plan dozens of new all-electric models, which could benefit from EV-friendly policy changes expected under the administration of President-elect Joe Biden.” — Bloomberg, Nov. 19

DEATHS
Eva Chambers, 59, died Nov. 19. A former PEI board member, Chambers was with Veeder-Root from 2001 to 2013. She also served as a managing editor and digital media manager for Convenience & Carwash Canada magazine from 2013 to 2017. Editor’s Note: Eva was one of the first members I met after joining PEI in 2009; I always appreciated her kindness and valued her perspective.

PEI MEMBER NEWS
Steve Fort, vice president of sales for Modern Welding, will retire Dec. 31 after 51 years with the company. Fort recently commented that during his career he saw more technological and regulatory changes than he can count. After Dec. 31, Fort can be reached at sfortmodern@gmail.com.

Dwight Rutledge, business development manager for Champion Labs Inc., will retire Dec. 31 after 37 years in the industry. A former PEI board member, Rutledge was instrumental in establishing the Petro Clear Filter product line. After Dec. 31, reach Rutledge at repddr@aol.com

Petrosoft LLC announced a partnership with Bulloch Technologies to provide a back-office software solution for Canadian convenience stores. Under the agreement, Petrosoft will integrate its CStoreOffice software with Bulloch's point-of-sale (POS) BT9000.

Dover Fueling Solutions promoted Wendi Pitman to vice president of the newly created digital customer experience (CX) organization and IT team. Pitman has been with DFS for 15 years.  She previously held IT leadership positions with Newell Rubbermaid/Burnes Group and Newellco.

ADMITTED TO PEI

  • Smart Money EPS Inc. dba A Smart Petro Services, Bakersfield, California (affiliate)
  • Tora Petrol Urunler Muh. Elek. San. Tic. Ltd. Sti., Istanbul, Turkey (distributor)
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The TulsaLetter is published two or three times each month by the Petroleum Equipment Institute. Richard C. Long, Editor. Opinions expressed are the opinions of the Editor.