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Commerce

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Issue #1903 September 26,2016

Minnesota Petroleum Marketer

Issue #1903 September 26, 2016

Inside this Issue:

MINNESOTA PETROLEUM MARKETERS ASSOCIATION

3244 RICE STREET ST. PAUL, MN 55126-3047

651/484-7227 800/864-3813 FAX 651/484-9189

E-Mail: [email protected] www.mpmaonline.com

The Minnesota Petroleum Marketer (ISSN 1062-8282) is published semi-monthly by the Northwest Petroleum Association dba Minnesota Petroleum Marketers Association. Standard—postage paid at the St. Paul, MN (USPS 5220). Subscription cost $25.00 per year. POSTMASTER: Send address changes to Minnesota Petroleum Marketer at address above.

Commerce 2

C-Store Retailers Facing Fines 3

Turning Problems Into Customer Loyalty 4

Minnesota Revenue 4

EIA Outlook 5

June U.S. Gasoline Demand Revised Lower 6

The Next Wave of EMV 7

Hunt Thank You 8

Convention Update 9

30 Days of Gas Station Food 10

Legal Corner 11

Insurance Corner 12

Classifieds 13

Bulletin No. 1903 -2- September 26, 2016

SAINT PAUL, MN-- The end of September signals the agricultural harvest along with corresponding cooler temperatures and the start of a new heating season. The demand increases for propane and diesel fuel for agricultural uses and for propane and heating oil for the Minnesotans who use those fuels to heat their homes. For those Minnesotans who rely on propane, diesel, and heating oil, the Minnesota Department of Commerce recommends the following:

Buy early. Fill up your fuel tanks now to minimize the high-demand prices of the winter months. It’s usually best to buy during the summer and early fall when there is less demand and prices are generally lower.

Consider a budget plan to spread out the payments. Most propane distributors offer budget plans for their customers. Distributors must also notify budget-plan customers of price or fee chang-es that may affect their monthly payment amount by more than 20 percent.

Know your rights. Legislation passed in 2014 established consumer protections such as transparent pricing (distributors must inform customers of current per-gallon price and additional charges, fees and discounts) and the prohibition of extraneous fees (adding any service, distribu-tion, transportation, or other fees to the bills of customers who enter into a contract with the dis-tributor are prohibited).

Get assistance. Low-income customers can apply for the state’s Energy Assistance Program that helps low-income customers pay their energy bills. An average grant per household is about $500 for the year. Information about the Energy Assistance Program is available on the Minneso-ta Department of Commerce website or by calling 1-800-657-3710.

Explore energy efficiency options. Commerce also recommends exploring options to reduce your propane and heating oil demand. Consider energy conservation and efficiency measures that will lower heating demand, such as programmable thermostats, air sealing, and insulation. Consider alternative heating systems such as solar thermal to supplement existing systems. See the Home Energy Guide (pdf) for ways to make your home more energy efficient.

Commerce is here to help If you have a question about how to stay cool and save energy, contact the Minnesota Commerce Department’s Energy Information Center at [email protected] or 800-657-3710.

Commerce urges propane, heating oil, diesel fuel users to prep for the heating season


Retailers who violate federal tobacco regulations will now face stiffer penalties.

According to the Food and Drug Administration's Center for Tobacco Products, the Department of Health and

Human Services recently issued a new regulation that adjusts for inflation the civil money penalty (CMP)

amounts assessed against tobacco retailers for violations.

The adjusted amounts apply to CMPs assessed after Aug. 1, 2016, even if the associated violations oc-

curred as far back as Nov. 2, 2015.

Under the revised amounts, a retailer who receives two violations within a 12-month period will face a $275

penalty, an increase of $25 from the previous amount. The changes increase as the number of violations

build. For example, a retailer who receives six violations within a 48-month period will now face a $11,002

penalty vs. a $10,000 under the previous CMP structure.

As a result of enactment of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74), the Department of Health and Human Services (HHS) recently issued a new regulation that adjusts, for inflation, the civil money penalty (CMP) amounts assessed against tobacco retailers who have violated the law. The adjusted amounts apply to CMPs assessed after August 1, 2016, even if the associated violations occurred as far back as November 2, 2015. The revised amounts are listed in the table below:

Number of Violations

Previous Amount

Adjusted Amount

1 $0 with a Warning Let-ter

$0 with a Warning Let-ter

2 within a 12-month period

$250 $275


$500 $550


$2,000 $2,200


$5,000 $5,501


$10,000 $11,002

C-STORE RETAILERS FACING FINES


TURNING PROBLEMS INTO CUSTOMER LOYALTY

When c-store workers commit to superior service, customers have better experiences. The bad news for retail is that service is actually worse now than it was two decades ago. But the good news—news that c-stores can capitalize on—is that if your staff is equipped to give great service, you can get higher prices, free marketing and happier employees. This is exactly what John Goodman, vice chairman at Customer Care Measurement and Consulting (CCMC), will focus on at a session he’s presenting at the 2016 NACS Show in Atlanta, October 18-21. Goodman’s experience with customer allegiance runs deep, as CCMC’s satisfaction and loyalty surveys and analytics have been used by more than 40 of the Fortune 100 companies to produce a better ROI from their investments in customer experience. He has also managed more than 1,000 separate customer service and experience studies, including the White House’s evaluation of complaint handling practices and Coca-Cola USA’s word of mouth and consumer education studies. A published book author, Goodman originated the well-known lessons, “It costs five times as much to win a new customer as to keep an existing one” and “Twice as many people hear about a bad experience as a good one.” In his NACS Show session, Goodman will go in-depth on the results of the 2015 National Rage Study and enlighten attendees on what customers really want. (Hint: It’s not what you think.) Attendees will walk away from the session with five easy actions to assure frontline employees will be successful with ser-vice, without giving away the store. Learn more at Goodman’s NACS Show session, “Turning Problems Into Customer Loyalty,” on Wednesday, October 19 at 8:00 am in Atlanta. Education sessions are one of the top reasons the convenience store in-dustry attends the NACS Show every year. Visit nacsshow.com to see the entire line-up of speakers and to register today! Want to take your Show experience one step further? Retailers can submit a 60-second video answering the question, “Why attend the 2016 NACS Show in Atlanta?” and potentially win some cool prizes, including din-ner at a popular celebrity chef restaurant in Atlanta, a hotel room upgrade or a champagne toast for 20 of your employees.

MINNESOTA REVENUE

The Minnesota Department of Revenue offers various Sales and Use Tax classes designed for business owners, bookkeepers, purchasing agents, and accountants who want knowledge of the law and how to meet their tax obligations. For companies that do business in multiple states, we partner with South Dakota, North Dakota, and Wisconsin to offer border state classes that highlight the similarities and differences between the states’ tax laws. Visit our website to see a www.revenue.state.mn.us and select the desired class and location to register online. These classes are free and open to the public.


SHORT-TERM ENERGY OUTLOOK

Highlights

Based on feedback from our readers, EIA plans to change the focus and layout of the Short-

Term Energy Outlook (STEO) analysis text, beginning with the upcoming October release. All

forecast tables and charts will remain the same. The text of the report will focus more attention

on current developments in oil and natural gas markets.

Benchmark North Sea Brent crude oil spot prices averaged $46/barrel (b) in August, a $1/b in-

crease from July. This was the fourth consecutive month in which Brent spot crude oil prices av-

eraged between $44/b and $49/b.

Brent crude oil prices are forecast to average $43/b in 2016 and $52/b in 2017. West Texas In-

termediate (WTI) crude oil prices are forecast to average $1/b less than Brent in 2016 and 2017.

The current values of futures and options contracts suggest high uncertainty in the price out-

look. For example, EIA’s forecast for the average WTI price in December 2016 of $44/b should

be considered in the context of Nymex contract values for December 2016 delivery. Contracts

traded during the five-day period ending September 1 suggest the market expects WTI prices

could range from $34/b to $65/b (at the 95% confidence interval) in December 2016.

U.S. regular gasoline retail prices are expected to decline from an average of $2.18/gallon (gal)

in August to $1.92/gal in December. For the year, U.S. regular gasoline retail prices are forecast

to average $2.08/gal in 2016 and $2.26/gal in 2017.

U.S. crude oil production averaged 9.4 million barrels per day (b/d) in 2015. Production is fore-

cast to average 8.8 million b/d in 2016 and 8.5 million b/d in 2017. Production levels in 2017 for

this forecast are 0.2 million b/d higher than in the August STEO. The upward revisions to pro-

duction largely reflect an assumption of higher drilling activity, rig efficiency, and well-level

productivity than assumed in previous forecasts.

Natural gas working inventories were 3,401 billion cubic feet (Bcf) on August 26. This level is

8% higher than last year during the same week, and 11% higher than the previous five-year

(2011–15) average for that week. EIA projects that natural gas inventories will be 4,042 Bcf at

the end of October 2016, which would be the highest end-of-October level on record.


JUNE U.S. GASOLINE DEMAND by OPIS June U.S. Gasoline Demand Revised Lower; Still Sets Record at 9.66MBD As expected by many, the Energy Information Administration (EIA) has issued a final reckoning of June gasoline de-mand in the U.S. that was lower (by 77,000 b/d, or 0.8%) than the blistering 9.741 million b/d implied by weekly esti-mates of consumption during the month. However, June 2016 gasoline supplied at 9.664 million b/d is a new all-time record for monthly demand, edging out the previous mark of 9.64 million b/d set in July 2007. The data contained in the latest Petroleum Supply Monthly (PSM) show motor fuel demand for the summer month a more modest 2.9% higher year on year compared to growth of 3.7% when comparing 9.741 million b/d from the weekly reports to June 2015's final 9.391 million b/d demand. The last few months have brought some large downward revisions when the higher- resolution monthly reports were issued - 258,000 b/d for April and 213,000 b/d for May, specifically. Weekly numbers had implied an April year-on-year boost of 3.63% but the published monthly data showed growth of just 0.8%. For May, year- on-year lift implied at 2.3% was actually only 2% in a comparison of final monthly numbers. The modest size of the June revision isn't likely to shake EIA's projection for total 2016 demand to hit a record 9.31 mil-lion b/d. That level would be the highest since annual demand of 9.286 million b/d recorded for 2007. However, the real problem for the annual estimate may come in the last four months of the year; the U.S. will have to see strong gasoline demand to beat the nine-year-old record. As anticipated by a number of analysts, EIA's under-counting of gasoline exports appears to have had much to do with the lower implied demand number. PSM shows a daily average of 531,000 b/d of U.S. gasoline shipped to other coun-tries in June, well over the agency's weekly estimates of 383,000 b/d during the month. Interestingly, Wednesday also saw EIA announce a new methodology for tallying weekly fuel exports to better inform its weekly estimates of implied demand of petroleum products, crude oil and biofuels. The federal agency says that it is now using "near-real-time" export data to improve the weekly export numbers it releas-es for jet fuel, diesel and gasoline by making use of data provided by U.S. Customs. Until now -- and the improvement has begun with the Aug. 31 Weekly Petroleum Status Report (WPSR) -- EIA has been relying on weekly export estimates based on monthly official export data published by the U.S. Census Bureau roughly six weeks following the end of each reporting month. Meanwhile, the OPIS Demand Report, a survey of nearly 10,000 stations, showed a June increase of just 0.4%, with a relatively uneven performance across the country. Northeastern demand, as captured by the OPIS survey, actually dropped 1.5% while Western demand was up 2.9%, according to the station reports. Companies interested in a free trial to the OPIS Demand report can contact Brian Norris at 301-287-2413, [email protected]. U.S. demand for distillate in June was also weaker compared to real-time estimates issued during the month though to a lesser degree than gasoline. The final June distillate supplied number was 3.855 million b/d, off by 0.6% compared to the 3.878 million b/d figure im-plied from WPSR data and virtually unchanged versus June 2015. Similar to gasoline, weekly estimates of U.S. distillate exports were under- counted. PSM showed outbound shipments averaging 1.448 million b/d in June, some 200,000 b/d higher than the EIA's week-by-week estimates during the month. --Beth Heinsohn, [email protected]


THE NEXT WAVE OF EMV

Convenience and fuel retailers prepare for EMV implementation at the pump and ATM. Fuels Resources Center Explore our Fuels Resource Center for everything you need to know about fuels– from the source that knows the subject best.

With the October 1, 2017, EMV liability shift looming for automate fuel dispensers, many U.S. con-venience store operators are preparing for the switch—to the tune of $6 billion.

Upgrading fuel dispenser point-of-sale technology comes with a price tag as high as $17,000 per pump, Gray Taylor, executive director of Conexxus, told CNBC, an expense that will cut into the bottom line of the more than 90,000 single-store operators with the 154,000-plus convenience store universe.

Taylor added that convenience store operators may have to replace their fuel dispensers entirely to implement EMV at the pump, and retrofitting existing dispensers can cost more than $6,000. “[T]he loss of gas pumps may create delays for summer drivers next year,” writes CNBC.

And as EMV chip technology continues to siphon resources for other operational and technology-related projects, many convenience retailers are advancing mobile payment technology to meet consumer demand for contactless/cardless payment options both inside the store and the pump.

Payment Week reported that many small businesses are opting out of the EMV standards by pushing mobile payments. A recent CAN Capital Small Business Health Index found that more than one in three small businesses (34%) accepted mobile payments, such as Apple Pay, which is a substantial increase from April 2015 when the number of small businesses that allowed mobile payments hovered at 13%.

As of October 1, 2016, U.S. EMV deployment will take place at the ATM. Last week Conexxus and the National ATM Council released an ATM Skimming Detection & Deterrence Guide for use at U.S. convenience stores. The guide helps ensure that U.S. convenience stores and retail ATM providers maintain their excellent track record for providing safe and secure transactions at in-store ATMs, despite a heightened near term card skimming risk from current implementation of EMV at U.S. ATMs.

EMV implementation is a major issue for the convenience and fuel retailing industry, which is why there are education sessions and group discussion opportunities specific to this topic taking place at the 2016 NACS Show in Atlanta, October 18-21. “Are You Prepared for EMV?” will highlight the essentials regarding EMV technology, including upgrading equipment and evaluating risks. At the “Group Forum: EMV,” subject matter experts will lead an interactive discussion on EMV deploy-ment.


THANK YOU - PHEASANT HUNT

On September 20, 2016, MPMA members and sponsors participated in the 6th annual hunt at Rice Creek near Little Falls, MN. Members enjoyed a beautiful day in the field bag-ging some wild roosters. LeBlanc’s served a tasty pheasant and duck meal with all the trim-mings. A great time was had by all those who participated. Personal funds raised from the jobber/ retailer members at the hunt will help the Political Action Committee provide support for candidates in the upcoming election. Thank you to the members who partici-pated and a big THANKS to the following sponsors for their support of the hunt…


ENBRIDGE


30 DAYS OF GAS STATION FOOD

Hear what happened to an endurance athlete when he ate nothing but gas station food for a month in the latest NACS Convenience Matters podcast.

There’s a perception that “healthy eating” doesn’t take place outside of the home. Restaurants, gas stations, fast-food establishments—they’re all spoken of as if they’re part of the problem. But are they?

Frank Beard, an endurance athlete from Iowa, wanted to do something extreme and change the conversation. So he recently conducted an experiment. To prove that it is possible to stay healthy while eating out, he consumed only gas station food for 30 days.

In the latest NACS Convenience Matters podcast, program co-hosts Jeff Lenard of NACS and John Eichberger of the Fuels Institute talk to Beard about his experiment in “30 Days of Gas Sta-tion Food.” The program can be downloaded on iTunes by searching for Convenience Matters. It also is available at nacsonline.com/podcasts.

“Frank’s goal was to gain no more than five pounds after eating nothing but food from gas stations for 30 consecutive days. He told us not only his final results but what else he learned about the in-dustry during his journeys,” Lenard says.

A new podcast is released every week, focusing on topics related to convenience stores.

MINNESOTA REVENUE

The Minnesota Business Tax Education Partnership will be holding free seminars in Blaine and Brooklyn Center for em-ployers and their representatives who are interested in information on state and federal employment taxes and other employer responsibilities. The seminars will be presented by experts from the IRS, Minnesota Department of Revenue, Minnesota Unemployment Insurance Program, Minnesota Workers’ Compensation Insurers Association, and the United States Department of Labor. Seminar content will include information on:

Worker status (independent contractor vs employee)

Employment Tax withholding, depositing and reporting

Unemployment Insurance

New hire reporting rules

Department of Homeland Security (USCIS) employee verification requirements

Workers’ Compensation Insurance

Labor standards (wage and hour issues) Seminar Date and Location: Date: Thursday, October 20, 2016 Time: 8:30 a.m. to 4:30 p.m. Location: Minnesota WorkForce Center, 1201 89

th Ave NE, Blaine, MN 55434

Date: Friday, November 18, 2016 Time: 8:30 a.m. to 4:30 p.m. Location: Brookdale Library, 6125 Shingle Creek Pkwy, Brooklyn Center, MN 55430 Fee: No fee, but advance registration is required. To register, visit: www.uimn.org/uimn/employers/help-and-support/educational-seminars/seminar-schedule.jsp


LEGAL CORNER


INSURANCE CORNER


CLASSIFIEDS

REMINDER—This newsletter is available in an electronic version to be sent directly to your email. If you would like to receive the newsletter electronically, email Holly Werner at [email protected] and request the electronic ver-

sion of the MPM Marketer.

NOTE: Classified ads are accepted on a first come, first serve basis. The cost is $3.00 a line for non-members. The Association of-fice does not look into nor endorse the products and services offered through the Newsletter ads.

FOR SALE: 1996 beall 4 compartment (9500 gallon) trailer- $26,000 or best offer. Call Gary 563-845-9711 FOR SALE: 1999 freightliner (CAT 3126) 10 speed– 4000 gallon steel Brownie tank. 3 compartment (1550) (1500) (1000) fuel oil only. Dual delivery system, Scully load anywhere system $10,000. 800-631-6832 or 952-884-4100—Dan or Vern FOR SALE: Algas SDI Fire 120/60H gallon per hour vaporizers (3) available. In nice condition-updated & ser-viced every year by trained technicians. Natural gas $3000 each. Ben @ 320-491-8572 FOR SALE: Rollies Sales & Service, Inc. / Pictures http:\rolliessales.com\ New tank 4500, 5 compartment Polar Tank, New LC Meters, dual inverted hannay reels, opw nozzles, sculyl swivels, 3rd high speed reel, purge tank-comes w/ warranty. 2011 freightliner, Cummins. 2100 Gallon, repainted, 5 compartment, current testing V,K,I,P & D.O.T. dual reels & meter, 2003 freightliner, automatic transmission-2014 polar 2 axle, 5400 gallon pup, w/ extendable draw bar (like new & FET already paid) 07 Polar, 9500 4 compartment, air ride, 3” hydrolick drive pump & manifold FOR SALE: 1996 Beall 4 compartment (9500 gal) trailer. $31,200 or best offer. Call Gary 563-845-9711 FOR SALE: JE adams dual motor 110 volt stainless steel commercial vaccum. Unit has very little use/ great condt. Dual recessed locks & user adjustable quarter mechanism for setting the price. Comes w/ several new hoses. $795. Scott 507-276-0655 FOR SALE: Scottsman CME306 Ice Machine. Standalone Ice Center, Owner’s Manual included. Good con-dition. Dimensions 24 x 22 x 28. $500 or best offer. Contact Reed at (952) 461-2251, or at [email protected] . Elko New Market, MN FOR SALE: Established gas station/repair shop/car wash business in Bagley, MN/ 3 bays w/ hoists, 2 pumps w/ gas & diesel & 24 hr computer pay on one. Rental & U-Haul also available but not included in price. All tanks etc with up to date inspection certificates. $240,000 call Dick at Grimes Realty 218-556-2882 FOR SALE: Trailer from Felling Trailer in St. Cloud, 16000#, wood platform (8x20), ramps, brakes, only used 2x. Located in Central MN, pics available $7500.00. (763)-300-2298 SPECIALIZING in the petroleum industry, Flaten Sandblasting and Paint LLC, fuel tanks, lp tanks, bulk plants, piping. Schedule your next job now with Blake @320-815-4468. FOR SALE: Petroleum Transports . Contact Dick Otterstrom– LBT Inc-Regional Sales Manager 651-402-2838. [email protected] // pictures & Specification sheets available. (1) 2009 LBT Inc-petroleum transport-9500 gallon –4 compartment (4000//1500//1000//3500) double bulk-heads-disc wheels-hose tubes –11R22.5 –air ride

Minnesota Petroleum Marketers Association 3244 Rice Street St. Paul, MN 55126-3047

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PAID TWIN CITIES MN

PERMIT NO. 5220

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