There\’s no money in selling petrol you know

And we have proof of that:

There are now fewer than 9,000 petrol forecourts in the UK, down from 21,000 in 1991, creating misery for motorists in large parts of the country. The fall comes despite the number of cars on the road doubling to 31 million over the same period, according to new research.

The shrinking of a business sector does generally indicate that there\’s not much, if any, profit in said sector.

It\’s true that cars have become less thirsty over the last 20 years, so the doubling of the fleet size does not indicate a doubling of the amount of petrol being sold. But the very fact that the sector has more than halved in size does show that there\’s no great profit to be made in petrol retailing.

It just ain\’t that part of the sector that\’s pushing petrol prices up……

13 thoughts on “There\’s no money in selling petrol you know”

  1. As a lot of supermarkets have opened petrol stations, which typically have a lot more pumps than the traditional ones, there won’t have been anything like the same decline in the actual number of pumps.

  2. So Much For Subtlety

    Curmudgeon – “As a lot of supermarkets have opened petrol stations, which typically have a lot more pumps than the traditional ones, there won’t have been anything like the same decline in the actual number of pumps.”

    Supermarkets also only offer discounts if you have bought a certain amount from their shops. Which will consolidate shopping trips in that people will go less often and so save them some money. But I expect they will also buy more petrol when they do too. There is no point just filling up the tank a little when you have a discount voucher.

    Which means fewer pumps may be needed.

  3. Regulations have made life difficult for low throughput stations as well.

    Fundamentally though consumers hate to have to buy petrol and will shop around in a way that they don’t for other products. This creates huge competitive pressures.

  4. “Counties in the south of England have been particularly badly hit by the closures, which have created ‘fuel deserts’ in great swathes of the countryside. ”

    Maybe all the people living in faux bucolic rural idylls should have kept using their local, slightly more expensive stations rather than filling up at Sainsbury’s on their way home.

  5. Back in the mid-60s I was earning pocket money working weekends at a small filling station on the A127. The profit to the garage from a gallon selling at 4/10 was 1 penny. I don’t believe the margins are a lot different today.

    I often wonder why supermarkets are still popular with motorists. When they first started selling petrol they were a lot less expensive than the brand names, but for some years now they are the same price (and occasionally dearer) than Shell, Esso, etc. (At least, round these parts.) As ‘Subtlety’ above suggests, it can only be the discount vouchers.

  6. It’d be interesting to know the increase in the value of fuel sales over the period. Sorry, did I say interesting? I meant horrifying.

    Lot of contributing factors here:
    Cars are more frugal but the tank sizes have, if anything, increased so range is way up. Combine that with the much greater use of plastic payment letting consumers spread the cost over time & there’s greater incentive to fill up rather than “stick a tenner in”.
    Land costs are well up & stations use a lot of land. The resource is more profitably used for other purposes.
    The dwindling number of repair shops with attached filling station. Modern cars are less likely to break down but when they do they’re beyond the capabilities of the old time small repairer.
    Minimum wage must have hit filling stations hard. Last time I was UK side the number of all night filling stations was back to early seventies levels. Be hard to justify what you’d have to pay for a 10 hour night shift in sales.
    Planning. Once you’ve lost a station for any of the above reasons opening a new one’d be a daunting task (unless you’re Tesco).

    Never mind, we’ll all be driving electric cars any day soon, won’t we? Stick a windmill on top & never have to worry about fuel costs ever again.

  7. Last time I was UK side the number of all night filling stations was back to early seventies levels. Be hard to justify what you’d have to pay for a 10 hour night shift in sales.

    Hang on – don’t most big forecourts either run 24 hours, or have card/advance payment pumps? For ‘filling station’ type establishments, 24 hours is obviously unviable, but most of them never did, surely?

    When I worked forecourt night shifts in 1998, the wage was slightly above what minimum wage was about to be – the approximate deal was that uni kids and new immigrants starting at the station worked night shift for no ‘horrible hours’ premium above the basic rate, and people who’d been there a while without either leaving cos it was awful, or being fired cos they were crooked (both fairly prevalent) worked day shifts for the same rate. Shifts were 7am-3pm, 3pm-11pm and 11pm-7am.

    The 11pm-7am shift started with about two hours of dealing with late workers, drunks and designated drivers. Petrol sales were about the same as a random two-hour period in the middle of the day; store sales were much higher.

    1am-5am was dead, except on Fridays and Saturdays, where things didn’t get quiet until 2-3am. There was about 2 hours work at this point working on restocking and cleaning – so weekday shifts featured 2 hours cleaning and 2 hours’ downtime (with a taxi, cop car or truck every 15 minutes or so throughout), and Fri/Sat shifts went straight from busy to cleaning to 5am. Then at 5am, things got average-weekday-daytime busy again – a lot of workers start work bloody early. By 7, it was busy to the extent that the shift change (although very welcome for me) was a pain in the arse for customers.

    So as long as you’ve got an outlet that gets a reasonable amount of custom as a late-night shop, there’s no sense in not being open 24 hours, otherwise you either lose customers, bugger the shift patterns, or have to hire contract cleaners for a couple of hours *and* find a way of restocking.

    One thing that may have changed the economics since 1998 is the growth of 24 hour supermarkets – if you’ve got a car and you’re sober enough to drive it, you might as well go the extra 10 minutes to Tesco.

  8. @ blokeinfrance: The devastation wreaked on close-knit forecourt attendant communities…

    You forgot “hardworking” and “up and down the country”….

  9. “Hang on – don’t most big forecourts either run 24 hours, or have card/advance payment pumps? ”

    It would seem not. Back in the era of early Led Zep getting from the W. End back up the A12* gave 2 options. The place down the Mile End Road the cab drivers used – yellow sign, some odd brand – & Gallows Corner, Romford. May have been others off route but not that I knew. Did the same trip couple years back with a hire car I didn’t trust the gauge on & it wasn’t much better. Actually detoured onto the N. Circ to the Tesco I knew was all night at Barking.
    I’ve never seen an unattended station in the UK. Are they allowed to be? Safety elves? Rural France they’re quite common but be warned you Brits. A lot of them seem to have trouble with non-French plastic so without a Carte Blue you may be in for a cold night’s sleep on the forecourt. Spain, the A7 Med coast road’s got hundreds of all nighters. However inland’s different. If you fancy overnighting down from Pamplona to Valencia that’s a lot of dark road. There are 24h gas stations signed down the turnoffs but what they mean can be varying. Ignore one & a klik along the highway your looking at a big, lit up Repsol off to your right in the valley the other side of that hill. Trust one & you could be in for 15 km of deserted rural wandering to a village no-one’s ever heard of. Best to tank at Zaragoza. Other inland routes can be similar. Spanish highways with no proper hard shoulder & high speed trucks are not the place to park.

    *@6 above our bee-fancying friend might like to know that my first ever purchase of the vital fluid was on the A127 headed for debauchery at the Kursaal & the price was exactly 4/10. He may well have handled my crumpled 10 bob note. Two tone Ford Anglia – blue/rust the latter being a popular colour on cars of that era.

  10. It’s not just the selling of petrol that is not profitable, it’s refining too. The “downstream” side of the oil business, i.e. refineries and chemicals (as opposed to the “upstream” side, which is exploration and production) has been a drag on the rest of the business for well over a decade now. Most companies are trying to flog as much of their downstream operations as they can. The Chevron refinery in Pembroke is about to be flogged to some Spanish outfit; most of the refineries in S. Wales have already closed; and it is only union pressure which is keeping some of Total’s refineries in France open. Compared to the upstream part of the business, there just isn’t money to be made in petrol refining, and it is only a matter of time before the supermajors decide their strategic value has declined completely.

  11. “*@6 above our bee-fancying friend might like to know that my first ever purchase of the vital fluid was on the A127 headed for debauchery at the Kursaal & the price was exactly 4/10. He may well have handled my crumpled 10 bob note.”

    Sorry, BIS, ‘my’ garage was on the London-bound side of the Sarfend Road.

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