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    The Shifting Fuels Environment

    Fewer gas stations, declining U.S. gasoline demand expected in the future

    By Brian Berk, Convenience Store News
    OPIS co-founder Tom Kloza (left) led a panel discussion with Michael Ports, Tom Robinson and Stewart Spinks.

    The future of fuels and the fuels retailer took center stage during November?s 2014 Annual Meeting of SIGMA: America?s Leading Fuel Marketers, held at the Omni Nashville hotel.

    Joe Petrowski, founder and managing partner of Mercantor Partners LLC, painted a picture of a much different gas station environment in the future during his Nov. 11 speech, entitled ?Shop TOC (Threats, Opportunities and Consolidation) in Mid and Downstream Fueling.?

    Due to the increasing acquisitions of convenience store chains by master limited partnerships flush with available cash, the convenience store industry will continue to consolidate. The former CEO of The Cumberland Gulf Group of Cos. projects the number of U.S. gas stations will drop from the current 140,000-plus locations to 115,000 sites, although he did not offer an exact timetable for when this change will occur.

    The gas station operator environment will shake out this way, said Petrowski:

    • Thirty-two major U.S. convenience store retailers operating 56,000 gas stations;
    • Fifteen grocery/hypermarts with a total of 14,000 sites;
    • Two mega distributors operating a combined 5,000 locations;
    • Twenty super distributors with 18,000 sites;
    • Just 12,000 single-store operators, a large decline compared to today; and
    • Ten thousand unmanned locations.

    U.S. demand for fuel also will decline in coming years, according to Petrowski, due to what he referred to as ?demand destruction.? Corporate average fuel economy standards, the rise of alternative fuels in the marketplace and the increasing number of people over 50 years old moving to urban areas will cause this demand destruction, he said.

    Nick Jones, energy advisor in the strategic planning department at Exxon Mobil Corp., also expects reduced U.S. demand for fuels in the future. During his presentation at the SIGMA Annual Meeting entitled ?A Thought Leaders? Forum,? Jones predicted that U.S. oil demand, currently at 8 million gallons per day, will drop to 5 million gallons per day by 2040.

    Three c-store executives served as panelists and were asked to assess Jones? predictions during the Nov. 10 educational session. All three said they found his presentation fascinating, but Michael Ports, president of Wooster, Ohio-based Ports Petroleum Co. Inc., said the future fuels market is simply too difficult to predict.

    Fellow panelists Tom Robinson, president of Santa Clara, Calif.-based Robinson Oil Corp.; and Stewart Spinks, chairman of the board and founder of Greenville, S.C.-based The Spinx Co. Inc., agreed with Ports? assessment.

    ?If we can figure out [the fuels landscape for] the next three years, we?re in good shape,? said Robinson.

    ?So many new technologies are coming out, making it very difficult to predict the market on a macro basis,? Spinks added.

    The SIGMA 2015 Annual Meeting will take place Nov. 9?11 at Westin Copley Place in Boston.

    By Brian Berk, Convenience Store News
    • About Brian Berk Brian Berk is managing editor of Stagnito Business Information's Convenience Store News and Convenience Store News for the Single Store Owner, where he specializes in covering motor fuels, technology and financial news. He has served the magazine industry for 14 years and has also worked in the radio and newspaper fields. Berk holds a bachelor's degree in communications from the State University of New York at Cortland and a master's degree in journalism from Quinnipiac University in Hamden, Conn.

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