Pearson Fuels Message Boards

[pearsonf]

I received an email from a customer and at the phone number that was attached, no one answered. : I thought I would post it here and comment on it:

"What kind of BS is this...You are the highest Ethanol price in the US because you have no competition."

Pearson Fuels Response :

It is true that we are still the only public E-85 station in the state. We currently have E-85 priced at $2.99. With all the taxes included we are making $.19 per gallon right now, or 6% margin.

There is currently a huge demand for Ethanol in CA in the form of the 5.75% gasoline additive in all of our gas. That, with the high cost of transport from the midwest has kept the price high for the last couple of years. However, there are many E-85 plants under construction and we are betting this situation will change in the next few years.

If you have any doubt about the honesty of these numbers, I will meet you at our store and share the invoices with you.

We do appreciate your business and support.
_________________
Mike Lewis
Pearson Fuels
www.pearsonfuels.com

[mpallette]

Apparently there has been a big drop in the price of
ethanol over the last two months:
http://money.cnn.com/news/newsfeeds/articles/prnewswire/AQM23901102007-1.htm

Mr. Lewis: has the price of ethanol in California dropped
substantially in California over the last two months? If so,
do you think we can expect a similar price spread that
exists in New York and Indiana (33% less than standard
gas for E85)?

Thanks in advance for your usual candor to my questions.
Mark Pallette
San Gabriel, Ca.

[travelsoftballdad]

I was really disappointed to find the price at Pearson's this week (Nov 9th, 2008) to be $2.69 a gallon !! I drove out of my way to Pearson's (not from area and no E85 near me) for the sole purpose of getting the E85; as I always do when in the San Diego area.

I was so shocked at the price on the sign that I had to go inside to confirm it was correct.

That being said, I drove up the street and paid $2.39 for regular unleaded at AM/PM. Costco in near-by Chula Vista was reported to be selling regular unleaded at $2.23 the same day.

I can not understand how this is happening. Tulare, Vegas, and everywhere else around the country is hovering around $1.80/gallon for E85.

Does this mean the new locations (Beaumont, Perris, Pomona) are all gonna follow suit because they are tied to Pearsons? I certainly hope not...I was getting ready to travel the 25 miles to Perris every week or so for E85 but can't if this is going to be the case.

Bummed !!

[coupe]

This station as of today was
E85-$2.69
Regular-$2.25

I don't like getting ripped off so I don't buy here. Checking E85prices.com you can see what it should be. How about these E85 prices

Tennesse $1.02 a gallon
Minnesota $1.29 a gallon
Texas $1.31 a gallon
Ohio $1.31
Even New York is cheaper $1.99

Pearson person when you wrote your first reply in July saying it will get better. Well gas has dropped from over $4.00 a gallon by 50% or so to $2.00
Yet E85 in July was $2.99
Today $2.69

See something wrong here?

[travelsoftballdad]

I think it's fair to say; those of us who post here are pro-E85 and will travel to purchase it. I have worked hard to get E85 in my area (so far with negative results) and am all about helping the cause.

THEN THIS STARTS HAPPENING and I'm upset. I feel stupid for thinking the E85 folks are any different than the big oil people. Someone tell me I'm wrong. Conserv Fuel has been ripping green-loving yuppies off for ever and over-charging for E85 because of it's high-rent west Los Angeles location. I thought Pearson's was different. I guess not....Hayward/Concord/San Diego/Oceanside all above regular unleaded price, but no one else in the country is !!??!?

In other news, Perris location was supposed to be up and pumping E85 on 11/15/08. When I called (three times) no one there knew anything and said it was not pumping yet. Any updates there? Is the price going to be outta control also?

[pearsonf]

Response from Mike Lewis - Pearson Fuels

I wanted to make a couple of comments about the price of E85 at our stations. First of all I wanted to thank each of you who have ever purchased E85 at any of our sites, we do sincerely appreciate the business.

Regarding the price of E85 at our sites, the price of E85 has very little relation to the price of gasoline, other than the 15% gasoline component. The price of Ethanol has by any measure collapsed. It has dropped over $1.00 per gallon in the last 6 months. Everyone would be thrilled about this and gushing over how great and visionary we are except for one thing, the price of gasoline has collapsed even further. In fact the price of gasoline has dropped farther and at a rate faster than any time in the last 100 years. Truly unprecedented. Most of the major ethanol producers are in Bankruptcy (Verasun) or mothballing or delaying plant openings (Pacific Ethanol).

The price of E85 anywhere else in the county has about as much relevance as the price of a house in another part of the country. That being said, the price of E85 in California is very relevant. I have heard that the guys in Tulare made a deal with Pacific Ethanol and I have been talking with them but so far not a lot of calls back and I have called the station in Tulare and no one calls back. I am going to continue to get us as aggressive a price as possible with our E85 but the real driver in E85 sales at the retail level has more to do with the price of gasoline than the price of E85. Remember E85 is $1.00 per gallon less than it was just 6 months ago!

Believe me, I am crystal clear that price is everything in the fuel market. Our volume is down over 90% since July 08 and we are selling for $1.00 per gallon less than in July. I mean I can do the math and if I had any control over margin that could swing the price below gasoline I would for purely business reasons if nothing else. It is pretty easy to figure out that .10 per gallon on 1,000 gallons a day is a lot better than .30 per gallon on 100 gallons per day.

The problem that we run into is that with these prices inverted, we have no volume to bargain with. 99% of the ethanol in California is used as an additive to gasoline and I am trying to negotiate a deal with a bankrupt or soon to be bankrupt ethanol supplier and all 5 of my open stations combined are selling maybe 16,000 gallons (2 trucks) per month. We aren’t negotiating from a position of strength yet, to say the least.

For the record, we have never made more than $.35 per gallon on E85 sales at our San Diego site and neither have any of our other station owners and after over 5 years of being out there and building these sites and dealing with an almost overwhelming amount of red tape and brain damage, we have never had a profitable year of operation, in fact it has never even been close to a breakeven, ever.

With that being said, we will keep building these things as along as we can survive and wait for the market to turn and when gasoline is $1.00 per gallon more than E85 we should have some serious volume and will be the heroes again and we will not have anything to do with that either.

Lastly, when I said at the beginning of this post, that I appreciate your business, I mean it. What many of you dont know is that we are pretty much a one-man show. Since we opened the station in San Diego 5 years ago, we have never had any employees who did anything other than run the station at that site until just 6 months ago, when I hired a station manager for the site and she helps me now, 2 days a week. Up until then, every word on every web site, every permit application, every press conference, press release, phone call, grant application and every customer complaint has been handled by me personally. I mean the only way I can run it any leaner is to have the station in San Diego unmanned, shut down or run the cash register myself in which case we wouldn't be building anything else. I dont tell you this for any other reason but to say that we are as lean as we can get and the reason you don't always see me respond to all of these posts now and in the future is that it is very often a matter of working on the new sites are typing here and as I said above, I think I need to just keep building them and hope that we can make it until the market turns again.

Thanks for your support

Mike Lewis
Pearson Fuels
_________________
Mike Lewis
Pearson Fuels
www.pearsonfuels.com

[minusprevious]

Im a new customer of Pearson & currently buying my E85 from the Pomona station.......Currently paying $2.99 & relatively OK w/ that price level as long as it keeps pace w/ 91, I'm satisfied
I'm concerned about the long term survival of E85 & hope that the advancement of E85 continues w/ alternatives to Corn such as Switchgrass is pursued =)

[Azian]