Let’s Talk About Specs Imagine walking into a Baskin Robbins and just asking for “ice cream.” The server will look at you like you’re nuts. What kind of ice cream? 2020 It’s the same deal with fuel – there are now “31 Flavors” Fuel Regs & Specs of fuel sold at the rack. Fuels vary depending upon the A State-By-State Handbook rack and what fuels are mandated in that state or county. For example, many parts of the United States have been deemed particularly high in pollutants – those areas are deemed “non-attainment” and are required by the EPA to have “reformulated gasoline.” That’s a special flavor. Spot replacement costs vary depending on the fuel. So, to truly anticipate rack price changes accurately, it’s critical to know which fuel is required in your market, so you know what spot market to keep an eye on. Having a fuel spec book is critical, especially if you buy or sell fuel in multiple geographic areas. That’s because fuel is not “fungible,” meaning there’s little or no interchangeability in the market. For example, the OPIS Fuel Regs & Specs Handbook is updated every year and can give you the full picture of what’s required in each region. That can help you stay compliant and make sure you are referencing the proper fuel in your contract. Rack Market Wrap Up There are about 400 racks in the United States, where jobbers, retailers and end users pull truck- sized fuel volume to take to storage facilities or retail outlets. Price changes, which go into effect at 6 p.m. each day, are based on “spot replacement costs,” meaning spot + freight + other costs. It’s critical to know what type of fuel is required in your region, so you know what spot prices to track – not to mention making sure you are pulling the right fuel at the rack. That means you need to stay on top of what’s required in your area. Remember: not referring to the right fuel can cause nightmares for anyone trying to be compliant or trying to verify the prices they are being charged are correct. But, it is also critical to have a consistent and reliable feed of rack pricing data and to remember the factors that influence price changes, from futures to spots to racks, so you are not caught off guard. Fuel Buying 101, Part 2: Wholesale Rack Markets | Oil Price Information Service (OPIS) © 2020, all rights reserved 17