Companies in this industry primarily sell fuel for motor vehicles; they may also offer car washes, car repairs, or inspections. No major companies dominate the industry. Although major oil companies own few retail fueling outlets, many gas stations contract to sell specific brands of fuel.
Rising demand for motor fuels in fast-growing economies such as China and India is driving gas station growth in those countries. China, the world's second-largest fuel market with $440 billion in retail sales, is home to 90,000 gas stations, according to Reuters. China's state-owned oil company Sinopec operates a third of the country's gas stations and competes with PetroChina, domestic independents, and foreign operators, including Royal Dutch Shell and BP. The Chinese provinces with the most gas stations include Shandong, Hebei, Henan, Guangdong, and Jiangsu. India, with more than 57,000 retail fuel stations and a growing middle class keen on car ownership, is outpacing China as the driver of global oil demand growth. Three state-run firms -- India Oil Corp., Hindustan Petroleum, and Bharat Petroleum -- dominate the market accounting for more than 93% of the market share, according to Platts Analytics. Still, India's fast-growing retail fuel market is drawing attention from major global oil companies, including Shell and UK-based BP.
The US gas station industry includes about 14,200 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $140 billion. Revenue for the industry, driven mainly by fuel consumption, can vary significantly from year to year, depending on the price of crude oil.
The industry includes some truck stops but excludes establishments that are combination gas station/convenience stores, which account for the majority of fuel retailers and are covered in a separate industry profile.
Demand depends on the volume of consumer and commercial driving. The profitability of individual companies depends on the ability to secure high-traffic locations, generate high-volume sales, and buy gas at the lowest possible cost. Large companies have advantages in purchasing and finance. Small companies can compete effectively by having superior locations. The US industry is concentrated: the top 50 companies generate about 55% of revenue.
As more retailers have added gas to their merchandising mix and big oil companies exit the fuel retailing, the competitive landscape for gas stations has expanded to include not only convenience stores, but also mass merchandisers, warehouse clubs, and grocery stores. Convenience stores sell about 80% of all fuel purchased in the US, according to NACS.
Potential long-term threats to gasoline stations include self-driving vehicles and ridesharing services, which could reduce the number of miles driven by helping better coordinate trips, and gas delivery startups, such as Filld and WeFuel, which allow drivers to bypass service stations. The number of gas stations in urban areas is falling as land values rise. In Manhattan, the number of gas stations fell by 40% over the last decade to just 31, as the ground underneath them was converted into apartments and office buildings.
Products, Operations & Technology
Fuel for motor vehicles accounts for about 90% of industry sales. Major products sold include unleaded regular gas and diesel fuel. Gas stations also sell
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms