LONDON, ON, June 10, 2013 /CNW/ – According to a recent survey of Canada’s retail gasoline facilities by petroleum consultancy MJ Ervin & Associates, Canada’s gas stations are increasingly becoming divorced from the crude oil producing and refining sectors that have traditionally maintained a “well-head to gas tank” vertical integration of assets and operations.
The total number of retail gasoline stations in Canada stands at 12,285 as of December 31, or 3.5 gas stations for every 10,000 persons; this represents a continuation of a downward trend since 1989, when over 20,000 stations existed. “We have seen virtually no increase in the retail gasoline margin in over 25 years,” states Michael Ervin of MJ Ervin & Associates. “Retail gas stations are no longer seen as a strategic asset for integrated oil companies,” since refiners typically have ongoing gasoline supply agreements with several third-party retail chains who themselves do not operate refineries.
Only 14 percent of Canada’s gas stations come under the direct price control of the three major oil companies (Shell, Suncor and Esso), although their brand names appear on 36 percent of all gas stations, many of which are price controlled by the local dealer, or by a regional marketer holding the rights to use the major brand on its sign and pumps.
At the time the study was completed, nine integrated refiner-marketers operated in Canada, representing a total of 15 refineries across the country. Recently, the number of integrated refiner-marketers declined to eight, with the recent split of Valero, the owner of Ultramar, into separate refining and marketing companies. By contrast, there are over 60 petroleum marketers in Canada who do not operate refineries, and over 90 distinct “brands” of gasoline.
These “non-refiner marketers” represent 77 percent of Canada’s retail gas stations, up from 70 percent in 2006, and reflecting a shift in retail gasoline ownership from refiners to non-refiners. A growing segment of this sector is the “big box” retailer, which has proliferated over the past decade and through competitive pricing and other incentives, has contributed to the overall decline in “conventional” gas stations.
The study, entitled the National Retail Gasoline Site Census 2012, is a research project by MJ Ervin & Associates and is the only comprehensive enumeration of the number of retail gasoline stations in Canada.
MJ Ervin & Associates (a division of The Kent Group) is a London-based consultancy specializing in the petroleum refining and marketing industry. MJEA publishes the Weekly Pump Price Survey, Canada’s authoritative source of petroleum prices (available at no cost on our web site www.kentmarketingservices.com). Our clients span a wide range of government, NGO and industry organizations with an interest in downstream petroleum issues. A full description of our consulting services is available on our web site.