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March 9, 2016 | Vol. 66, No. 5

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In This Issue

Dear PEI Member:

We have talked with more than 300 members and their customers from February 4 to March 3 at three PEI committee meetings, the PEI Young Executives Winter Conference and the annual conventions of the Western Petroleum Marketers Association (WPMA), the Petroleum and Convenience Store Exposition of Mid-America (PACE), and the Southeast Petro-Food Marketing Exposition (SE Petro). Based on what they told us, here’s our take on the prospects for the rest of 2016.

Many members are bullish about business. Most are busy; some are very busy. Looking back on the last three months, members remark that they haven’t had to deal with the harsh winter that typically challenges construction projects and crews. That said, while service station construction work is fairly plentiful, competitors are keeping the margins small. Margins for commercial and industrial construction (emergency generators, fleet fueling, aviation fueling) are higher for companies that serve those markets.

A few members that are down in total sales are showing more profit than last year.

Manufacturers agree that domestic distributors are doing just fine. When we asked a dozen manufacturers to name distributors that were slower than usual to pay, they couldn’t come up with more than one name—and the distributors identified were all different!  

Petroleum marketers have made money and the cost of capital is still relatively cheap. The issue is not if they have the money to spend, it’s how they will choose to spend that money.

Consolidation among petroleum marketing companies shows no sign of slowing. State petroleum marketing association executives almost universally lament a decline in membership numbers as smaller petroleum marketers/oil companies are purchased by larger companies.

Current Business Conditions

OUST’s New Guidance Document

New Husky Acquisition

Women's Conference


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The hectic pace of consolidation among PEI distributors and service/construction companies seems to have eased a bit. While a good number of companies still want to sell, the number of potential purchasers is not that large—and they are being choosey about what they buy and the price they pay. Acquisitions of decent sized companies seem to be taking longer than they used to take.

Europay, Mastercard and Visa (EMV) upgrades have many of the service departments across the country busy. Much of the work is still in-store, as petroleum marketers try to comply with the in-store October 2015 deadline. We hear that credit card companies are being aggressive in their chargebacks for inside-the-store fraud. As instances of chargebacks spread and are publicized, that might encourage more marketers to upgrade on the island. Stations in rural areas and single-store operators will be the last to comply—if they stay in business. EMV will negatively affect other parts of the industry as capital is reallocated from new station builds and image upgrades to fund the EMV upgrade. 

The need for service technicians—especially trained veterans with a proven track record—is at the top of the wish list for almost all companies offering service. Signing bonuses have become more common, and some companies have run “help wanted” ads in regional and national industry publications.     

With the price of gasoline and diesel in the $1-$3 range, CNG/LNG refueling installations are down in numbers, but don’t count them out. Some work is still out there, but the majority of the companies that build those stations are biding their time until the price of gasoline goes back up and CNG/LNG vehicles are again a competitive option.

Operating and Maintaining Underground Storage Tank Systems: Practical Help and Checklists is the title of a 59-page manual written by EPA’s Office of Underground Storage Tanks (OUST). It contains brief summaries of the federal underground storage tank (UST) requirements for operation and maintenance (O&M), as well as practical help that goes beyond the requirements. OUST makes it clear that the manual is not a substitute for EPA’s regulations. Furthermore, OUST states that the document is not a regulation itself and does not impose legally binding requirements.

Checklists prompt the user to look closely at what kinds of equipment are in use and how to keep that equipment working properly over the lifetime of the UST system. In addition, the manual provides recordkeeping forms to help the UST owner and operator keep equipment operating properly.

Husky Corp., Pacific, Missouri, has acquired SUR&R, a supplier of fuel, brake, air conditioning and transmission fluid line repair kits. SUR&R, based in Akron, Ohio, also makes specialty tools used in the automotive aftermarket. Terms of the deal were not disclosed. The acquisition is part of Husky’s strategy to serve the broader transportation sector, company officials said.

Register now for the 2016 PEI Women Spring Conference, to be held May 11-13, 2016, in New Orleans, Louisiana, at the historic Bourbon Orleans Hotel. Last year’s PEI Women Conference was one of the highest-rated events PEI has ever hosted. This year’s conference will feature an impressive array of industry, business and inspirational speakers. Equally important, the schedule includes numerous opportunities for attendees to connect with and learn from female peers in the industry.

Early-bird registration for the conference closes March 11. The early-bird rate is $495 for PEI Women members ($595 for non-members, which includes a lifetime membership in the PEI Women program). After March 11, the fee increases to $595 for PEI Women members; $695 for non-members. The registration fee includes all sessions, materials and meals. To learn more and register, visit www.pei.org/women2016.   

Members of the Steel Tank Institute-Steel Plate Fabricators Association (STI-SPFA) elected their 2016 board of directors at the organization’s recent annual meeting in Kapalua, Maui, Hawaii. Officers for 2016 were then elected by the board at the same meeting. Three STI-SPFA officers are PEI members: David Watson, Watco Tanks, Floresville, TX (president); Steve Meeker, Hamilton Tanks, Columbus, OH (treasurer); and Sonny Underwood, Mid-South Steel Products, Inc., Cape Girardeau, MO (chairman of the board). PEI members serving as directors on the STI-SPFA board, in addition to Underwood and Meeker, are Tony Honey, Modern Welding Co. Inc., Owensboro, KY, and Coby Hayes, J.L. Houston Co., Hopkins, MO.  

Each year the PEI Foundation awards a number of $1,000 Charles D. Kemp scholarships to deserving dependents of full-time employees of PEI member companies. The deadline to apply for this year’s scholarships is March 31. Applicants must plan to enroll as an entering freshman for the 2016-17 academic year at an accredited four-year college or university. Scholarship awards are based on academic achievement, leadership, character, financial need and the applicant’s intent to contribute to the future of the fuel and fuel handling equipment industry. Visit www.pei.org/foundation to download the complete scholarship guidelines and application form. If you have any questions about the application process, contact Teresa Jonkman at tjonkman@pei.org.

Mark Hoener
, a 38-year veteran of the petroleum equipment industry, died February 29. He was 56. Mark was hired by his grandfather to work for R. L. Hoener Company, Quincy, Illinois, after he graduated from high school. He stayed with Hoener his entire career, working in the industrial sales and design department until his death. Survivors include his wife, Kathy; a son, Eric; and three grandchildren.   
Albert Franklin “Bob” Burns, Jr., died at home in Knoxville, Tennessee, February 27. He was 68. Bob was employed by various PEI member companies throughout his 49-year career in the petroleum equipment industry. He is survived by his wife, Betty, and several children and grandchildren. A celebration of Bob’s life will be held at 2:00 pm, March 20, at Cedar Springs Presbyterian Church in Knoxville.

Italy pump manufacturer
. Adam Pumps SpA, Via Della Resistanza 46/48, Campogalliano (MO), 41011, Italy, has applied for manufacturer division membership. Patrizia Malaguti is involved in sales for the firm, which was established in 2014. The company manufactures pumps, systems and accessories for diesel and Ad Blue transfer. The equipment is sold through distributors. Sponsored for PEI membership by Tuten Aluc, Interpet, Istanbul, Turkey. www.adampumps.com
Fleet management solutions provider. Fleetmatics, 1600 East Golf Road, Suite 800, Rolling Meadows, Illinois 60008, has applied for affiliate division membership. Dirk Munson is regional account manager for the company, which was established in 2004. Fleetmatics provides fleet management solutions for small- and medium-sized businesses delivered as software-as-a-service (SaaS). Sponsored for PEI membership by Paul Robertson, TnksDirect, Laurel, MD. www.fleetmatics.com


  • Howard Lee & Sons Inc., Cherry Valley, IL (dis)
  • Complete Fueling Solutions, Bakersfield, CA (S&C)
  • Mathew Barron, SAIA Motor Freight Line, Johns Creek, GA (O&E)
  • Graham Redford, Rubis Energy Bermuda Ltd., St. George’s, Bermuda (O&E)


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© 2016
Petroleum Equipment Institute
P. O. Box 2380
Tulsa, OK 74101-2380

The TulsaLetter (ISSN 0193-9467) is published two or three times each month by the Petroleum Equipment Institute. Robert N. Renkes, Executive Vice President, Editor. Opinions expressed are the opinions of the Editor. Basic circulation confined to PEI members.