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
Recent Developments
Apr 23, 2024 - Wholesale Prices Rise
- Revised figures from the US Census Bureau show producer prices for petroleum and petroleum products merchant wholesalers rose 5.5% in December compared to a year ago, 1.2% below their peak in July of last year. Industry employment was relatively unchanged in January year over year, while average wages increased 1.9% over the same period to $31.06 per hour, near their all-time high in November 2022, BLS data show.
- 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.
- 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.
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