Fuel Oil & LP Gas Dealers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 4,290 fuel dealers in the US generate revenue by selling heating fuels, such as LP gas, fuel oil, or kerosene, to a variety of customers, including residential, commercial, and industrial accounts. Other sources of revenue include the lease or rental of LP gas storage tanks and related services. Companies may also sell, install, and service appliances and heating/AC systems. Some large companies operate LP tank or cylinder exchange programs.
Declining Demand
Demand for LP gas and fuel oil for heating is declining, with revenue fluctuations driven primarily by pricing changes and weather conditions.
Seasonality and Weather
Industry sales are seasonal and peak during the “winter heating season," which runs from approximately November through March.
Industry size & Structure
The average fuel oil or LP gas dealer operates out of a single location, employs 16-17 workers, and generates about $11-12 million annually.
- The fuel oil and LP gas dealer industry consists of 4,290 companies that employ about 71,600 workers and generate about $48.5 billion annually.
- The industry is somewhat concentrated at the top; the top 50 firms account for 43% of industry sales.
- Large companies include Amerigas Partners, Ferrellgas Partners, and Star Group.
- To lower the cost of providing service, most small companies operate locally. Some small companies are family-run and passed down through generations.
Industry Forecast
Fuel Oil & LP Gas Dealers Industry Growth
Recent Developments
Feb 23, 2024 - Employment Fell in 2023
- Employment by fuel oil and LP gas dealers dipped 1.1% in December compared to a year ago amid declining industry sales, according to the latest data from the Bureau of Labor Statistics. Wages moved in the opposite direction, with average hourly earnings of production and nonsupervisory employees at fuel dealers rising to a new high of $28.13 in December, a 2.2% year-over-year increase, according to BLS projections.
- New England winters are getting warmer, NBC10 Boston reports. Indeed, winter is the fastest-warming season in New England, the nation’s largest market for fuel oil for heating. Since the 1970s, winter temperatures there have warmed by 3.4 degrees on average, equal to an additional 15 days spent warmer-than-normal during the winter months. More broadly, the US experienced one of the warmest Decembers ever in 2023, with several cities breaking their records, according to AccuWeather meteorologists. While reduced demand for heating in homes and other buildings during warmer winters can result in lower energy consumption and costs for consumers, it spells trouble for highly seasonal heating fuel sales.
- Most US households will spend less on residential energy this winter, according to the US Energy Information Administration’s Winter Fuels Outlook for 2023-2024. Per the report, households that relied on propane for heating last winter spent $1,380 compared to a projected $1,340 this winter under a base-case scenario. Under warmer-case and colder-case scenarios, households that heat with propane would spend $1,210 or $1,850, respectively. However, homes that rely on heating oil could pay more this winter – a projected $1,850 under the base-case scenario compared to $1,720 last year. Residential energy customers who rely on natural gas could see an estimated savings of $160 this winter under a base-case scenario. In 2022, propane was the primary heating source for 5% of US households, while heating oil was the primary source for 4% of household heating (concentrated in the Northeast).
- The US Department of Energy has proposed raising the minimum efficiency standards for several categories of residential gas and liquid fuel-fired boilers, the National Energy & Fuels Institute (NEFI) reports. Manufacturers criticized the proposed boiler standard, which would apply to newly manufactured boilers and take effect in five years, according to Fuel Oil News. If finalized, the proposal would raise the minimum Annual Fuel Utilization Efficiency standards to 95% for gas hot water boilers and 88% for liquid fuel hot water boilers, representing an increase from the current standards of 84% and 86%, respectively, per the NEFI. “The DOE is utilizing the Energy Policy and Conservation Act to aggressively push a political agenda,” said NEFI President and CEO Sean Cota. “The administration sees efficiency standards as a tool to push consumers towards more costly and less efficient electric heat pump systems, even if they cannot afford them,” he said.
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