The rack is the loading point at a fuel terminal, where trucks pull in and fill up. The rack price is the wholesale price a jobber pays per gallon, before freight and taxes. It is the number everything else is built on. This guide covers how rack pricing works, what OPIS and DTW mean, and how the rack number becomes the price at the pump.
What the rack price is
Rack prices are posted by terminal and by product, and they move every day with the market. Two terminals a few miles apart can post different numbers, and a jobber's job is to buy at the right rack at the right time. For more on what "the rack" means for taxes, see above the rack vs below the rack.
OPIS and how contracts are tied to it
OPIS, the Oil Price Information Service, reports rack prices across the country. Most supply contracts do not name a flat price. They name an OPIS benchmark, like an average of certain terminals, plus or minus a differential. So the jobber's cost floats with OPIS, and the contract just sets how far above or below that benchmark they land. For the full story on the benchmarks, see what is OPIS.
Dealer tank wagon (DTW) pricing
Not every gallon is bought at the rack and hauled by the jobber. With dealer tank wagon, or DTW, pricing, the fuel is priced delivered, with freight and margin already in the number. The supplier or jobber brings it to the station. DTW is common at branded stations, where the brand sets a delivered price.
From rack to pump: the layers
The price a driver pays is the rack price with several layers stacked on top:
- Rack price. The wholesale cost at the terminal.
- Freight. The cost to haul it, by terminal, hauler, and distance.
- Motor fuel taxes. Federal, state, and local, layered per gallon. See motor fuel excise tax.
- Surcharges and fees. Environmental fees and the like.
- Margin. The jobber's, then the retailer's.
Miss a layer or apply it late, and the margin is gone. The whole point of a fuel back office is to apply rack, freight, and tax the moment a load is bought, so you know your margin before the truck rolls.
Why it matters for your back office
Rack pricing is fast-moving and unforgiving. FastDragon reads the rack by terminal, applies freight and tax automatically, and ties each load straight to the customer it was sold to, so the margin is locked the moment a purchase meets a sale. See how on the Fuel Jobber page.
Questions people ask
What is rack pricing?
Rack pricing is the wholesale price of fuel at the terminal rack, the loading point where trucks fill up. It is the price a jobber pays per gallon before freight and taxes. Rack prices move daily, by terminal and by product, based on the spot market and each supplier’s posting.
What is OPIS?
OPIS (Oil Price Information Service) is the price reporting agency whose published rack benchmarks most fuel supply contracts reference.
What is DTW (dealer tank wagon) pricing?
Dealer tank wagon, or DTW, pricing is a delivered price. The supplier or jobber prices and delivers the fuel to the station, with freight and margin already built in. DTW is common for branded stations.
How do fuel jobbers set their prices?
A jobber starts from the rack price, then adds freight, motor fuel taxes, any surcharges, and a margin to reach the price they charge a customer. Good software applies all of those layers the moment a load is bought, so the margin is known before the truck rolls.
What is the difference between rack price and retail price?
The rack price is wholesale, paid at the terminal. The retail price is what a driver pays at the pump, which includes the rack cost plus freight, all the taxes, the station’s operating costs, and retail margin. The gap between them covers the whole chain from terminal to pump.