CSNews Study Shows Bright Future for Alternative Fuels

JERSEY CITY, N.J. -- The future is bright for natural gas and electric vehicle charging, according to the results of the exclusive Convenience Store News 2012 Motor Fuels Study. Only about 2 percent of convenience store retailers surveyed said they offer natural gas at the pump currently, but 22 percent expect to offer the fuel alternative within five years. Nearly 3 percent of retailers offer electric charging stations now, but more than 12 percent plan to offer the option by 2017.

Conversely, diesel and ethanol offerings are expected to drop. Thirty-eight percent of retailers offer ethanol now, but only one quarter of the survey participants said they expect to offer the petroleum alternative in five years. Meanwhile, three-quarters of the retailers offer diesel, but that number is expected to dip slightly to 72 percent within five years.

. In all, more than 63 percent of retailers offer some form of alternative fuel at this time. Nearly 69 percent expect to offer a fuel alternative in five years.

Retailers have complete control over what alternative fuels they offer at the pump. However, the one thing convenience store retailers cannot control -- gas prices -- has had a profound effect on their businesses. A whopping 87 percent of c-store retailers surveyed said rising gas prices affected their business, an increase of nearly 6 percent compared to last year's study. Almost exactly in unison, gallons of gasoline sold also fell by about 6 percent.

The average price for regular grade gasoline in 2011 rocketed by 26 percent vs. the prior year, to $3.58 per gallon. Gas prices have risen more than 150 percent in the past 10 years. Although hard to believe, fuel prices averaged just $1.39 per gallon in 2002, which was a low for the past decade.

Perhaps some good news is on the horizon, though. Despite several new daily record gas prices in 2012, the U.S. Energy Information Administration predicts fuel prices will decline 1 percent this year and drop another 5 percent in 2013 to $3.33 per regular gallon.

As for the various regions of the country, the West Coast suffered the highest prices at the pump last year, with regular gasoline averaging $3.74 a gallon. The Gulf Coast enjoyed the lowest prices, with a gallon of gasoline selling for an average of $3.36.

During the first half of 2012, 56 percent of retailers said their overall fuel sales in dollars were up due to higher gas prices. Thirty-three percent have experienced a decrease in fuel dollar sales, while 11 percent reported similar figures vs. the first half of 2011.

In addition, the average margin per gallon at c-store gas stations increased to 14.3 cents in the first half of 2012, compared to the same timeframe last year.

For more results from the 2012 Motor Fuels Study, look in the October issue of Convenience Store News.