Petroleum Product Wholesalers

Petroleum Product Wholesalers

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.

Highly Variable Product Costs

Profitability for petroleum products wholesalers is highly dependent on the narrow margin between the cost of goods (rack price) and wholesale prices (Dealer Tank Wagon – DTW price).

Sensitivity To Economic Conditions

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