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March 28, 2017 | Vol. 67, No. 7

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In This Issue

Dear PEI Member:

“How’s business? And what’s on your mind these days?”

During the past 60 days, PEI staff have asked hundreds of members those questions, thanks to a travel season that has included committee meetings, the Young Executives Conference, regional trade shows, presentations in California, Ohio, Florida, Texas and Georgia, and numerous visits to members’ places of business. Here are the “top 10” takeaways from what we heard.

  1. The EMV forecourt delay is both blessing and curse. Distributors and contractors that staffed up to service the expected wave of EMV installations in 2017 have been hit the hardest by the three-year delay of the forecourt liability shift. On the positive side, the delay has somewhat softened the industry-wide service technician shortage. Many distributors also expect that ultimately the extra three years will increase their total EMV-related revenue. Stores that might have needed equipment upgrades in 2017 will require more profitable replacements in 2019 or 2020—including add-ons such as mobile pay and media at the pump.
  2. Construction is booming. As convenience stores get bigger and major chains expand their geographic footprint, members with a construction focus are reaping the benefits. Margins also remain strong in this area.
  3. Deregulation and tax reform are essential. Regardless of political affiliation, members are hoping President Trump will follow through on his promises of a more business-friendly federal government. Pro-business labor laws, a rollback of expanded overtime regulations and lower corporate tax rates are at the top of the wish list.
  4. Sales channels continue to evolve. Buying product from large distributors is helping many small- and medium-sized distributors lower costs, reduce inventory, increase cash flow and boost margins.

How’s Business?

CAFE Standards to Be Re-Evaluated

EPA Funding May Be Slashed

PEI Women Conference


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  1. Remote diagnostics could change service delivery. Manufacturers are adding sensors, software and cloud connectivity to an ever-widening number of fueling equipment components. Some distributors are wondering if/how/when this will affect the traditional distributor/marketer service relationship. In particular, will manufacturers use all this technology to gain greater leverage over the service delivery channel?
  2. The coming year will have a lot to say about the future of ethanol. Distributors and their customers are actively following developments with ethanol this year. Most expect that the number of c-stores offering E15 will accelerate in 2017, particularly on new construction. However, corrosion directly or indirectly related to ethanol is an ongoing concern.
  3. Higher interest rates mean cash is king. Rising interest rates on business loans are beginning to put pressure on highly leveraged firms. With two recent increases by the Federal Reserve in its benchmark funds rate (Dec. 2016 and Feb. 2017) and signals that two more increases are yet to come this year, PEI members have ample reason to reduce their debt load.
  4. Consolidation = complications. Manufacturer consolidation is reducing competition in some product categories. On the distributor side, on-again, off-again consolidation is very much on again so far in 2017. The latest round of mergers and acquisitions is prompting some distributors to rethink their businesses’ future. Should they seek to acquire or be acquired? If not, how will they compete in the new competitive environment?
  5. Health care costs are an increasing problem. The Republicans’ proposed solution for the repeal and replacement of Obamacare has now collapsed, but health care costs remain a huge problem in the industry. Benefit providers are warning members of massive premium increases and reduced plan options for employees in the coming months.
  6. Electric vehicles (EVs) remain top of mind. Despite projections showing that liquid fuels will dominate for years to come, members remain interested in the future (and future threat) of EVs. Although few distributors are currently installing EV charging equipment, one possible point of entry is new store construction. As EV charging becomes a faster and easier process, large chains may begin to build EV charging infrastructure into their forecourt plans “just in case.” Full-service construction-oriented distributors then could position themselves as a one-stop solution for both liquid fuel and electric charging.

The U.S. Environmental Protection Agency (EPA) and Department of Transportation (DOT) jointly announced March 15 that they will re-evaluate the Corporate Average Fuel Economy (CAFE) standards for model year 2022-2025 light-duty vehicles. The announcement reverses a Jan. 12 “final determination” by then-EPA Administrator Gina McCarthy that affirmed a 2012 proposal to gradually increase the nation’s CAFE to 54.5 mpg for model year 2025 vehicles (see Jan. 19, 2017 TL).

The new plan pushes final determination of the 2022-2025 standards to April 2018, the original deadline established in the 2012 rulemaking. In their joint statement, the EPA and DOT noted that extra time is needed to gather scientific and statistical data from the National Highway Traffic Safety Administration (NHTSA), as required under the original rule.

At present, the two agencies are not challenging a previously granted waiver that will allow California to set fuel economy guidelines even more stringent than the federal CAFE standards.

A preliminary budget proposal released March 17 by President Trump would reduce the EPA’s FY 2018 funding by 31 percent, from $8.3 billion to $5.7 billion. Under the plan, the EPA’s workforce of 15,000 would be cut to 11,800, and state grant programs would be reduced substantially. Some analysts also believe the budget reductions would require delegation of tribal grants and regulatory authority to the states.

Although the proposal provides a blueprint of the administration’s priorities for the coming year, the final FY 2018 budget will be determined in May when Congress is scheduled to develop and votes on actual appropriation bills.

OPW, in cooperation with the U.S. Consumer Product Safety Commission, has issued a voluntary recall of OPW 241TPS and OPW 36S hose swivel connectors manufactured between Jan. 2013 and March 2017. A complete list of affected swivels can be found here. In a related matter, the Technical Standards and Safety Authority for Ontario, Canada, is requiring that any affected swivels in that province be removed from service by April 13, 2017.

Register now for the third annual PEI Women Conference, to be held April 25-27 in Savannah, Georgia. This year’s program will again feature exceptional presentations, workshops and networking opportunities. Attendees also will be treated to a panel discussion featuring the insights and experiences of four extremely accomplished PEI Women members: Chris Blumberg of SouthEastern Petroleum Systems; Paola Bravo of S. Bravo Systems; Marion Long of Walsh, Long & Co.; and Joyce Rizzo of JD2 Environmental.

Registration is $595 for PEI Women members ($695 for nonmembers). The nonmember registration fee includes a lifetime membership in PEI Women. To learn more, register and book your hotel room, click here.

National Energy Equipment
has acquired Velcon Canada, a division of Parker Hannifin Canada. The acquisition agreement includes exclusive distribution rights for Velcon aviation and industrial filtration products in Canada.
has agreed to acquire Professional Carwash Systems, Inc., a distributor of Washworld vehicle wash systems and supporting products for the convenience store, grocery, automotive service center and car dealer markets. The purchase takes effect April 17.
SloanLED has announced the following appointments: Jamie Hampshire, regional manager, Central U.S., for SloanLED lighting systems business units; Scott Hassler, territory manager, Southeast U.S., for SloanLED sign business units; Susan Svotelis, Canadian sales manager for both sign and lighting business units; and Hans van Rooyen, regional territory manager for the SADC (Southern African Development Community) region.
Seneca Companies has named Justin Richmond director of fuel quality and restoration services for its waste solutions division. He will be responsible for strategic growth, sales and management of Seneca’s fuel polishing and restoration services.
BJM Pumps has promoted Joseph Ho to service manager. Ho has been with BJM for more than 10 years.

Over three in five Americans assume that any gas sold at fueling stations is safe for all of their cars
as well as other, non-road engine products, like boats and mowers (63 percent in 2017, up from 60 percent in 2016 and 57 percent in 2015). This year's poll also shows roughly two thirds of Americans believe higher ethanol blends of gas are safe to use in any engine (31 percent).”—Boating Industry Online, March 17, 2017
“Over the past decade, nearly half of all of the states and the District of Columbia have had some kind of financial incentive for EV sales on the books—typically in the form of an income tax credit or a straight-up rebate. … Today, only 16 states (plus the District of Columbia) still offer tax credits or rebates, and at least two states are voting in the current legislative session on whether or not to extend or repeal the benefits.”—The Energy Collective, March 14, 2017
“UPS said it will invest more than $90 million in natural gas facilities and vehicles, including fueling stations, compressed natural gas trucks, and liquefied natural gas vehicles. The company plans to build an additional six CNG fueling stations and add 30 new CNG tractors and terminal trucks as well as 50 LNG vehicles to its alternative fuel and advanced technology fleet.”—Automotive Fleet, March 17, 2017
“Until Amazon is able to communicate a clear win-win channel strategy to distributors, it will likely have a tough time gaining enthusiastic channel partners.”—Modern Distribution Management, Feb. 6, 2017
“QuikTrip Corp. will begin offering E15 fuel at 44 of its convenience stores in the Dallas-Forth Worth Metro area. … Other c-stores that offer the fuel include Family Express, Kum & Go, MAPCO, Minnoco, Murphy USA, Protec Fuels, RaceTrac, Sheetz and Thorntons.”—Convenience Store News, March 27, 2017

California distributor.
Fuel Transfer, LLC, 330 S. Maple St., Suite H, Corona, CA 92880, has applied for distributor division membership. Clark Beesley is owner and general manager of the firm, which was established in 2016. The company is a petroleum equipment sales and service firm. Sponsored by Monica Leonard, PIUSI, Fort Lauderdale, Florida.
Indiana tank manufacturer. Steel Tank and Fabricating Corp., P. O. Box 210, Columbia City, IN 46725, has applied for manufacturer division membership. Ron Trocchio is sales manager for the firm, which was established in 1952. The company manufactures aboveground storage tanks that are sold through PEI distributors. Sponsored for PEI membership by Jack Dunifon, GasEqpSer, Fort Wayne, Indiana.
Italy tank manufacturer. Emiliana Serbatoi SRL, Largo Maestri del Lavoro 40, Campogalliano, Modena, 41011, Italy, has applied for manufacturer division membership. Giulio Guastalli is sales area manager for the firm, which was established in 1983. The company produces and sells through PEI distributors tanks for the storage, transport, supply and management of fuels. Sponsored for PEI membership by Monica Leonard, PIUSI, Fort Lauderdale, Florida.
Oklahoma architectural and consulting firm. The McIntosh Group, 1850 S. Boulder Ave., Tulsa, OK 74119, has applied for affiliate division membership. Karen MacCannell is senior associate of the firm, which was established in 1998. The company specializes in accessibility, architecture, prototype and site-selection programs for their clients. Sponsored for PEI membership by Ron McDowell, PECOFacet, Tulsa, Oklahoma.
Alabama retail management systems provider. Fiscal Systems, Inc., 4946 Research Drive NW, Huntsville, AL 35805, has applied for affiliate division membership. Laura F. Moore is sales and marketing manager for the firm, which was established in 1983. The company provides a retail management system that includes total integration of POS operations. Sponsored for PEI membership by Bob Chase, Bennett, Spring Lake, Michigan.


  • Able Applied Technologies, Columbus, Ohio (mfr)
  • Titan Chemical Transfer Solutions LLC, Greenville, South Carolina (mfr)
  • Blaze Display Technology Co. Ltd., Nanshan, Shenzhen, China (aff)


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© 2017
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. Richard C. Long, Editor. Opinions expressed are the opinions of the Editor. Basic circulation confined to PEI members.