Market basis and range of fuel price protection programs, including The Club

1. Fuel Price Protection Programs Overview Empower customers to lock in or cap retail fuel prices Achieve multiple objectives, particularly higher margins and sales Several tools available to accomplish Multiple & independent ways to implement Small-to-large-scale implementation

2. Objectives Higher fuel margins (reduceFGM risk) Higher sales volumes (fuel & store) Competitive advantage Increased customer loyalty Improved company image Good public relations Additional opportunities (“partnerships”) 2

3. Fuel Gross Margin FGM = Retail price – Delivered Cost – Taxes FGM = Retail price – Spot price – Rack/Spot diff. – Transp. – Taxes FGM = Retail price – Futures – Basis– Rack/Spot diff. – Transp. – Taxes Several factors (competition, demand, etc.) constrain retailers from setting prices that achieve consistent, high FGMs. The market controls FGMs. 3

4. Impact of Futures Futures drive the market: FuturesSpotRackRetail Controlling Futures is key to controlling FGMs. ControlFutureswith futures, commodity funds, and options. 4

5. The Formula Price locks and caps are derived from this formula: Retail Price = FGM target + Futures + Basis + Rack/Spot diff. + Transportation + Taxes 5

6. Fuel Cards Transaction Process Valero sets FGM target and calculates Price Locks and Caps (from The Formula) for up to unlimited time periods in particular service areas or states Customer chooses price lock or cap and specifies gallons (100 gallon increments) Customer pays with Valero credit card Valero buys offset (futures or spot) Customer takes “delivery” at Valero station in the area or state via his fuel card during the price protection time period Valero sells offset in volumes that match customer deliveries FGM target is achieved 6

7. Pre-Paid Fuel Cards Survey 7 Concern Interest 145 middle class responders

8. F3P Approaches Fuel Cards– card owners benefit (Details doc) Storage – all customers benefit (Storage doc) Storage+Fuel Cards  offer below-market fuel cards Valero Club – $50 annual fee for 100 gallon price cap card & discounts on store items (Valero Club doc) Financial– no pump deliveries, automatic settlements. Expand opportunities for FGM target sales. No up-front cost cards– customers pay price on cards only when cards are used. Ex-tax fuel cards – not state specific 8

9. Higher Margins: 5% existing customer participation with 5 ¢/g gain relative to market Higher Fuel Sales: 2% new customers @ 10 ¢/g margin Increased Store Sales: store-placed kiosks for F3P access Partnerships: 1 ¢/g compensation for assistance with implementation Revenue 9

10. Survey customers Choose “best” implementation approach(es) Establish Implementation Policy Open & fund accounts for “futures” offsets Create F3P access: website & kiosks Select customers for pilot program, launch Evaluate success; modify as appropriate Advertise Expand incrementally by customers and regions Roadmap 10