Petroleum Product Wholesalers

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 1,800 petroleum product wholesalers in the US act as middlemen between refiners/storage terminals and retailers or end users. Major revenue categories include motor gasoline; distillate fuel oil; lubricating oil and greases; jet fuel, naphtha, or kerosene; and residual fuel oil. Wholesalers may have downstream operations and own groups of gas stations. Petroleum product wholesalers service a wide range of customer industries, including gas stations, convenience stores with gas stations, airports, farms, and government fleet operators.

Clean Energy Transition

Consumer and governmental efforts to reduce US dependence on fossil fuels affect demand for petroleum products.

Sensitivity To Economic Conditions

Demand for fuel is sensitive to economic conditions and can drop during periods of uncertainty.

Industry size & Structure

The average petroleum product wholesaler operates out of a single location, employs 19 workers, and generates about $320 million annually.

    • The petroleum product wholesaling industry consists of about 1,800 firms that employ about 33,745 workers and generate $575 billion annually.
    • The industry is concentrated; the top 50 firms account for 87% of industry revenue.
    • Large companies, such as Mansfield Energy, Murphy Oil, and US Venture, may have additional midstream and downstream operations, in addition to wholesale operations.
    • Petroleum products wholesalers ("jobbers") supply the majority of fuel sold to gasoline stations. Jobbers also own or act as franchisors for the majority of gas retail outlets in the US.
    • Most firms operate within a limited geographical market, and may be constrained by proximity to supply (terminals).
                                Industry Forecast
                                Petroleum Product Wholesalers Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Feb 23, 2024 - Wholesale Prices End 2023 at Record High
                                • Producer prices for petroleum and petroleum products merchant wholesalers rose about 7% in December compared to a year ago, ending 2023 at an all-time high, according to the US Bureau of Labor Statistics. Meanwhile, industry labor costs held relatively steady with employment by petroleum product wholesalers flat (up 0.1%) year over year and average industry wages dipping 0.4% to $30.93 per hour in December, according to the BLS.
                                • The ample new supplies of US crude oil that in recent years helped to suppress spikes in oil prices are dwindling, The Wall Street Journal reported in February. US crude oil output is expected to grow by just 170,000 barrels a day (bpd) in 2024 compared to 2023, down from an increase of 1 million bpd last year, WSJ reported citing federal record-keepers. That would be the smallest annual increase since 2016 (excluding the pandemic). Abundant supplies of crude oil produced in the US, notably the oil-rich Permian Basin, helped keep a lid on oil prices despite OPEC production cuts and turmoil in global oil markets due, most recently, to Israel’s War in the Middle East. Recent acquisitions by Exxon Mobil, Chevron, and other players are fueling consolidation in the oil patch, shifting the focus from drilling new wells to returning cash to shareholders, WSJ reports.
                                • Petroleum distributors can reduce the cost of fleet ownership by optimizing operational efficiency using advanced trailer telematics, according to fleet management provider Road Ready. Beyond location tracking, advanced trailer telematics (ATT) systems enhance fleet management, improve security and profitability, and stay ahead of maintenance issues. ATT systems use onboard hardware and software to collect, analyze, and interpret the data from the trailer, providing real-time insight into its location, condition, and performance. ATT systems use mobile-wireless networks to broadcast data from the trailer to the cloud via a mobile communications unit onboard each trailer. Sensor technologies monitor lights, brakes, and tires, including tire inflation and wheel-end temperature to ensure peak performance and prevent blowouts and failures. While installing ATT systems can be complex and requires investment, it isn’t a sunk cost considering the down-the-road payoff, per Road Ready.
                                • More than 190 countries at the United Nations climate conference – known as COP28 – in December signed on to a deal calling for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner,” The Wall Street Journal reports. The agreement states the shift to clean energy for the global economy should accelerate this decade with the aim of net-zero greenhouse gas emissions by 2050, according to WSJ. It's the first time a U.N. climate agreement has called for governments to cut back on all fossil fuels and demonstrates a new determination by governments worldwide to cut fossil fuel consumption. Its supporters say it should accelerate the flow of private investment into clean energies and away from fossil-fuel production. The deal does not set a strict timeline for transitioning and endorses carbon capture and storage technology, giving the oil and gas industry some leeway to comply.
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