VP Fuels Company Sold

Former Valero VP hopes marketers will race to new branded fuel effort
A former Valero vice president has teamed up with the appropriately named VP Racing Fuels and hopes to
launch a nationwide gasoline brand effort this autumn.
VP Racing is well known among racers, hot rodders and other car enthusiasts with a clientele ranging from
teenagers driving souped-up Hondas to movie stars who prefer $400,000 Lamborghinis. Former Valero marketing
executive Alan Cerwick has signed an agreement to acquire and become president of San Antonio-based VP, and
will try and take the VP brand to mainstream fuel marketers and customers.
VP Racing has been around since 1974 and has distributors in the U.S., Australia, Asia, Europe and the Middle
East. But now the company is targeting U.S. distributors with an image and brand package for all fuels, whether
marketers sell traditional 87-93 octane gas or the signature “VP100” fuel. That fuel boasts a 100 octane standard
but is “street legal” and meets all other regulatory gas standards.
Cerwick told Oil Express that the branding effort will intensify soon with a target launch date coinciding closely
with the November SIGMA meeting. Preliminary work on a “VP” branded canopy has been done, and the firm
promises a “major” image that is economical. Discussions are under way for a co-branded card via a major credit
card provider, as well as loyalty programs.
Distributors who sign up, via an unspecified “competitive” licensing fee, can purchase their gasoline at local racks
from the gamut of traditional unbranded suppliers and sell it under the VP moniker. For distributors who opt to offer
the additional VP100 grade, that fuel will be provided outside the traditional logistics, via rail and truck.
Among the boosters of VP is late night television host Jay Leno, and the VP100 indeed has some jaw-dropping
margins. The fuel typically retails for about twice the value of regular unleaded gas, or say $7-$9/gal these days.
Dealers can expect to make about $1/gal on the high octane fuel which is designed for enthusiasts who chase
horsepower and performance rather than price. In the right high end area, dealers might see as much as 3,000-
4,000 gal/month in sales, so it can tilt weighted average margins off the charts.
Whether that “premium” fuel and price will translate into muscle for the other grades sold under the aegis of a
national brand remains to be seen, but the company has high octane hopes. The first markets for the effort will likely
be in California and Texas, OE was told.
The VP name is well known in racing circles and has national presence with niche cable providers such as Speed
Network and Fox Sports and is the exclusive sponsor for NHRA, the National Hot Rod Association, and other
racing series.

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