Gas Stations

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 10,000 gasoline stations in the US sell automotive fuels, preferably at high-traffic locations, to individual motorists and fleets. Products sold include gasoline, diesel fuel, and gasohol. Other sources of revenue may include repair services, the sale of automotive oils, replacement parts and accessories; and/or providing limited food services.

Volatile Fuel Costs

With such low margins, gas stations have difficulty absorbing significant and sudden fuel cost increases.

Competition From Alternative Retailers

About 80% of all fuel sold in the United States is sold at convenience stores, according to the National Association of Convenience Stores.

Industry size & Structure

The average gas station employs about 9 workers and generates about $6 million annually.

    • The gas station industry consists of 10,000 firms with about 16,500 stations.
    • The industry generates about $99 billion annually and employs 147,600 workers.
    • Some retail outlets are owned and operated by refiners, while others are independent businesses that purchase gasoline from refiners and markets for resale to the public.
    • Most gas stations are independent operators with 1,262 individual proprietorships
                          Industry Forecast
                          Gas Stations Industry Growth
                          Source: Vertical IQ and Inforum

                          Recent Developments

                          Mar 16, 2023 - State Fuel Taxes Rise
                          • Tax rates for retail gasoline and diesel fuel increased in 13 US states this year, according to the EIA. As of January 2023, state taxes and fees on gasoline and diesel fuel averaged $0.3163 per gallon (gal) of gasoline and $0.3388/gal of diesel fuel, according to the agency. Gas and diesel taxes have increased in 13 states since July 2022. Notably, Illinois surpassed California as the state with the highest taxes ($0.674/gal), while Connecticut temporarily surpassed Alaska as the state with the lowest gasoline taxes ($0.05/gal), although that low tax rate will gradually increase through May 2023. Other states with rising taxes on retail fuel sales include New York, Utah, Nebraska, Pennsylvania, Georgia, North Carolina, Florida, West Virginia, Massachusetts and the District of Columbia. Federal excise tax rates remain at $0.183/gal for gasoline and $0.243/gal for diesel fuel.
                          • Convenience stores and gas stations are among those retail formats holding on to their pandemic gains, market intelligence firm reported in February. Foot traffic remains far ahead of pre-pandemic numbers, with January 2023 gas station and convenience store visits up 22.8% relative to January 2020. Compared to January 2022, foot traffic was up 6.8% in January of this year. Strength in the category is notable given the post-pandemic sustained shift to hybrid and remote work employment, which has cut down on commuting. Also, with public transportation ridership still below 2019 levels in many cities and many gas station leaders stepping up their food offerings, the sector is likely to continue seeing success in the year ahead, according to
                          • Tesla has committed to opening up 7,500 of its charging stations by the end of 2024 to non-Tesla EV drivers, NACS reports. Until now in the US, Tesla Supercharging stations have been accessible primarily to drivers of the company’s own cars. Tesla already has a US network of more than 17,700 fast chargers at over 1,650 locations. Convenience stores -- which account for 80% of the fuel sold in the US -- are investing in EV charging infrastructure, including 7-Eleven, Casey’s, Circle K and Sheetz. EV drivers’ top desired amenity while charging is Wi-Fi connectivity (64%). Restrooms (60%), coffee/beverages (56%) and snacks/light meals (48%) were the next most desired offerings, according to NACS. Existing infrastructure at most current gas stations and convenience stores will require a major electrical overhaul to support ultrahigh-speed EV charging.
                          • Eight cities and towns in Northern California banned the construction of new gas stations in 2022, The Wall Street Journal reported. Following in the footsteps of Petaluma, CA, which became the first US city to ban new gas stations in 2021, more communities in the state are questioning the need for more gas stations. City leaders and climate advocates cite climate change and the increasing number of electric vehicles on the road in support of the bans. The California Fuels and Convenience Alliance (CFCA), which represents gas-station owners, is fighting the proposals. It has argued that gas stations can install and subsidize EV chargers. CFCA also said bans would force people to drive farther to get gasoline, leading to more pollution, according to WSJ. In 2022, Santa Rosa (pop. 176,938) became the largest city to ban gas stations.
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