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.

Sensitivity To Economic Conditions

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

Reducing Dependency On Fossil Fuels

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

Industry size & Structure

The average petroleum product wholesaler operates out of a single location, employs 18 workers, and generates about $282 million annually.

    • The petroleum product wholesaling industry consists of about 1,800 firms that employ about 33,300 workers and generate $520 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

                                Nov 10, 2022 - Foreign Demand for US LNG Exports Rises
                                • Demand from Europe and Asia for US liquified natural gas (LNG) exports will drive triple-digit growth in US annual operating capacity by the end of the decade, CEO of energy infrastructure company Sempra Jeffrey W. Martin told investors in October 2022. “What's interesting is the United States today has [more or less] 70 million tonnes per annum of operating capacity, and we project that over the next eight years that will grow by 130%,” Martin said, adding the nation is fortunate to have adequate or surplus natural gas supplies and an ability to produce about 100 Bcf/d of gas with about 20% earmarked for export, Hart Energy reports. Martin said his forecast “might be a little bit short” owing to potential increased availability. In 2021, the US surpassed Australia in trade and liquefaction capacity, according to recent reports from the Energy Information Administration.
                                • The price of gasoline and diesel fuel is rising across much of the nation, the latest update from the US Energy Information Energy (EIA) shows. The average price for a gallon of regular gasoline increased by $0.054 cents to $3.796 on November 7. The price at the pump rose for motorists on the East Coast, Midwest, and Gulf Coast, while the Rocky Mountain Region and West Coast saw gas prices dip slightly. California drivers have seen gas prices dip in recent weeks, although the price they pay per gallon remained the highest in the nation ($5.228). The trend in the price of diesel fuel mirrored that of gasoline with the exception of the Gulf Coast, which saw the price of on-highway diesel fuel dip.
                                • As of November 2022, releases from the Strategic Petroleum Reserve (SPR) had depleted the nation’s emergency stockpile of crude oil to less than 400 million barrels, the lowest level since 1984. The current release program – begun in May by the Biden administration to ease soaring gas prices – will leave the SPR at its lowest level since 1983: at about 342 million barrels, or less than half of the system’s 714 million bbl capacity, according to RBN Energy LLC analyst Jason Lindquist. The rapidly shrinking SPR is limiting the administration’s ability to respond to the 2% cut in production announced in October by OPEC+ that is expected to send gas prices sharply higher. In reaction to the cuts, the White House said it would order additional releases from the SPR “as necessary,” reversing a plan to end drawdowns in November. The lower volumes in the SPR could make the market more volatile if supply-related issues arise late in 2022 or in 2023.
                                • The US Environmental Protection Agency is proposing to require vapor balancing equipment be installed at bulk plant facilities with gasoline design capacity throughput of 4,000 gallons or more per day. The vapor balancing equipment would be required for tanks, loading racks, and cargo tank vehicles loading and unloading at these facilities including any gasoline storage and distribution facility that receives gasoline by pipeline, ship or barge, or cargo tank, and subsequently loads the gasoline into gasoline cargo tanks for transport to gasoline dispensing facilities and/or ultimate purchasers with a gasoline throughput of less than 20,000 gallons per day. Industry trade association Energy Marketers of America believes the EPA’s proposed rules could have a significant regulatory and cost impact on bulk plant operators.
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