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 9,000 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 7-8 workers and generates about $7-8 million annually.
- The gas station industry consists of 9,000 firms that operate about 12,800 stations, employ 96,700 workers, and generate about $99 billion annually.
- The industry is concentrated at the top and fragmented at the bottom: the 20 largest firms represent 56% of industry revenue.
- While some gas stations are owned and operated by refiners, most are independent businesses that purchase gasoline from refiners and markets for resale to the public.
Industry Forecast
Gas Stations Industry Growth
Recent Developments
Apr 26, 2024 - Rising Crude Prices Fuel Inflation
- The Produce Price Index (PPI) for gasoline stations rose 7.7% in March compared to a year ago after falling 16% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. Severe weather in the US and OPEC members' cuts are pushing up the price of US crude oil. Employment by gas stations grew 1.1% in January year over year, while average industry wages were relatively flat (down 0.6%) over the same period. Average wages at gas stations have declined by nearly 3% from their peak in May 2023 of $18.92 per hour, according to the BLS.
- US retail gasoline prices will average about $3.60 per gallon in 2024 and 2025 (up 10 cents from 2023), according to the US Energy Information Administration’s April 2024 Short-Term Energy Outlook (STEO). The April STEO forecast for retail gas (regular) is 10 cents per gallon higher on an annual average basis in 2024 compared with the March STEO, due to rising wholesale gasoline prices as well as higher crude oil prices. The EIA now forecasts the wholesale gasoline price will average more than $2.70/gal in 2024, also 10 cents/gal more than in 2023. The higher forecast wholesale gasoline prices compared with the March STEO reflects the agency’s expectation of more gasoline exports and lower gasoline inventories, leading to an increase in the 2024 annual average crack spread for gasoline relative to last month’s forecast.
- Oil giants Chevron and Exxon Mobil are developing cleaner gas as an alternative to electric vehicles, Fuel Market News (FMN) reported in December. Chevron and Exxon in April disclosed road test results from partnerships with automaker Toyota Motor Corp using renewable gasoline partially made from soybeans or other non-fossil feedstocks. The blends could be used by the existing US car fleet and gas stations, according to the two companies. If made commercially available, the fuels could extend the life of the gasoline market as part of the world's transition to cleaner fuels and electric vehicles. Bringing the cost of these renewable gasoline blends to affordable levels would depend on supportive government policies, according to Exxon. Chevron added it could be years before the renewable fuel could be available in pumps, Reuters reported.
- Demand for crude oil is expected to peak before the end of the decade amid an uptick in electric vehicles and developing nations' transition to cleaner sources of energy, according to a new forecast by the International Energy Agency (IEA) reported by The Wall Street Journal. The IEA forecasts rising demand for transport fuels such as gasoline will be the first to peak before starting a steady decline. In the near term, demand from Asian economies – notably China – will continue to feed the global appetite for oil. The IEA raised its 2023 oil supply forecasts by 200,000 barrels a day to 101.3 million barrels/day, and it expects further supply growth of 1 million barrels/day in 2024. According to the report, oil demand will grow by a further 1 million barrels/day in 2025, after which the rate will begin to cool notably.
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