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The U.S. Petroleum Industry: Statistics, Definitions


Demand

Oil
Oil demand in 2012 was 89.17 million barrels per day worldwide, an increase of 1.07 million barrels per day over 2011. Demand is projected to increase to 90.11 million barrels per day in 2013 and 91.46 million barrels per day in 2014. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

Just more than half (50.9%) of world oil demand comes from OECD (Organization for Economic Cooperation and Development) countries. However, OECD oil demand is expected to decline (led by Europe and Japan) and non-OECD (such as China) oil demand is expected to increase. By 2014, more than half (50.8%) of world demand will be from non-OECD countries. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

U.S. oil consumption was an estimated 18.65 million barrels per day in 2012, and is expected to be 18.71 million barrels per day in 2013 and 18.77 million barrels per day in 2014. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

The average American uses 1.8 barrels of oil every month, or 0.053 barrels per day. (Source: U.S. Energy Information Administration, U.S. Census)

There are 195 widely traded crude oil streams traded on the markets, with the two most popular being West Texas Intermediate (WTI) and Brent Blend. (Source: Crude Oil Market Handbook, 2011)

Motor Fuels
U.S. gasoline demand was 8.73 million barrels per day in 2012, approximately 360 million gallons per day, or about 40 million fill-ups per day (based on a 9-gallon fill-up). (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

U.S. gasoline demand decreased 0.2% in 2012 and has decreased 6.1% since demand peaked in 2007.

Year

Gasoline demand
(million barrels/day)

Change from prior year

2012

8.73

-0.2%

2011

8.75

-3.4%

2010

9.06

+0.7%

2009

9.00

+0.2%

2008

8.98

-3.4%

2007

9.30

+0.6%

(Source: U.S. Energy Information Administration, "Weekly Average U.S. Product Supplied of Finished Motor Gasoline")

U.S. gasoline demand increases over the first half of the year and peaks in the warmer months. In 2012, demand per day in August was 12.6% higher than in January.

Month in 2012

Gasoline demand
(million barrels/day)

Change from month prior

January

8.073 (low)

-7.4%

February

8.299

+2.8%

March

8.510

+2.5%

April

8.661

+1.8%

May

8.850

+2.2%

June

8.864

+0.2%

July

8.756

-1.2%

August

9.094 (high)

+3.9%

September

8.683

-4.5%

October

8.663

-0.2%

November

8.579

+1.0%

December

8.558

-0.2%

(Source: U.S. Energy Information Administration, "Weekly Average U.S. Product Supplied of Finished Motor Gasoline")

In 2012, weekly demand was at its lowest the week of January 13 (7.996 million barrels/day; gas prices averaged $3.38) and at its highest the week of August 31 (9.177 million barrels/day; gas prices averaged $3.78). (Source: U.S. Energy Information Administration, "Weekly Average U.S. Product Supplied of Finished Motor Gasoline")

Gasoline demand is 46% of total U.S. petroleum demand. (Source: U.S. Energy Information Administration, "Weekly Average U.S. Product Supplied of Petroleum Product")

For small light duty vehicles (the 190.2 million passenger vehicles, vans, small trucks and SUVs with a wheelbase of 121 inches or less), the average fuel usage was 453 gallons consumed per year, which averages out to 1.24 gallons per day or 8.7 gallons per week. These vehicles had an average fuel efficiency of 23.5 mpg and travelled 29.1 miles per day.

For large light duty vehicles (the 40.2 million passenger vehicles, vans, small trucks and SUVs with a wheelbase of greater than 121 inches), the average fuel usage was almost double that of the smaller vehicles: 898 gallons consumed per year, which averages out to 2.46 gallons per day or 17.2 gallons per week. These vehicles had an average fuel efficiency of 17.2 mpg and travelled 42.3 miles per day. (Source: Federal Highway Administration, Highway Statistics)

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Vehicles
There were 210.1 million licensed drivers in the United States in 2010. (Source: U.S. Federal Highway Administration)

Americans travelled 8.038 billion miles per day in 2012, and are expected to travel 8.083 billion miles per day in 2013. With approximately 240 million registered vehicles in the United States, this equates to an average of 33 miles per vehicle per day. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

Light-vehicle sales in 2012 reached 14.5 million units, a 13% increase from the year prior and the highest volume since 2007. (Source: Automotive News Data Center)

Clean diesel automobile sales in the United States increased 25.6 percent in 2012. (Source: HybridCars.Com and Baum and Associates)

Approximately 53,000 plug-in electric cars were sold in 2012 €" triple the total of 2011. The Chevy Volt was the market leader, with sales of approximately 23,500 units. (Source: Green Car Reports)

Hybrid and electric vehicles account for approximately 3% of all vehicle registrations. However, the 15 "Designated Market Areas" with the highest percentage of hybrid powertrains account for 30 percent of the country's overall hybrid sales. All 15 of these markets are on the West Coast. National penetration for hybrid vehicles stands at 2.97%, while in San Francisco the hybrid market makes up 9.4% of all vehicles sold. Electric vehicles comprise 0.09% of vehicle registrations. (Source: Polk research report, December 2012)

The average age of vehicles on U.S. roads is about 11 years. (Source: Experian Automotive and R.L. Polk & Co.)

Supply
Increasing global supply is expected to outpace consumption. World oil supply was 88.99 million barrels per day in 2012 and is expected to increase to 90.01 million barrels per day in 2013 and 91.71 million barrels per day in 2014. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

U.S. oil production in 2012 was 6.43 million barrels per day, an increase from 5.57 million barrels per day in 2011, and is expected to increase to 7.32 million barrels per day in 2013 and 7.92 million barrels per day in 2014. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

Because of drought conditions that depressed corn harvests, U.S. fuel ethanol production fell from 900,000 barrels per day in the first half of 2012 to 820,000 barrels per day in the second half of 2012. It is expected to remain near current levels, averaging 870,000 barrels per day in 2013 before increasing to 915,000 in 2014. The ethanol share of gasoline averaged 9.6% in 2012, and is expected to still be under 11% in 2014. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

U.S. biodiesel production was 65,000 barrels per day in 2012 and is expected to increase to 74,000 barrels per day in 2013. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

U.S. Imports
In 2012, the U.S. imported 10.68 million barrels per day of crude oil and finished petroleum products. Imports accounted for 57.1% of U.S. petroleum supply. (Source: U.S. Energy Information Administration)

The top five importers of petroleum (crude oil and finished products) to the United States in 2012 were:

  • Canada (27.5% of U.S. imports)
  • Saudi Arabia (13.1%)
  • Mexico (9.5%)
  • Venezuela (8.5%)
  • Russia (4.3%)

(Source: American Petroleum Institute, Jan.-Sept. 2012 average)

The United States imports half of its oil from OPEC countries: 40.2% of total imports came from OPEC; only 20.4% of total imports came from Persian Gulf countries. (Source: American Petroleum Institute, Jan.-Sept. 2012 average)

Since peaking at 12.5 million barrels per day in 2005, U.S. liquid net imports have declined. Net imports were 7.5 million barrels per day in 2012 and are expected to be 6.0 million barrels per day in 2014. The share of total U.S. consumption met by liquid fuel imports was 40% in 2012 and is expected to be 32% in 2014. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

Stocks and Inventories
There are 7 billion to 8 billion barrels of crude oil tied up in worldwide stocks at any given time €" from the wellhead to the consumer, filling tankers, pipelines, railcars and trucks €" linking all of the markets. (Source: U.S. Energy Information Administration)

Holding inventory costs money €" approximately $1.50 a barrel per month for oil if a company owns the tank storage facility and $4 per barrel per month if the storage is rented. For gasoline, the costs are about 1 cent per gallon per month if the storage space is rented. Thus, companies try to manage their inventories as efficiently as possible. (Source: U.S. Energy Information Administration)

Strategic Petroleum Reserve
With a capacity of 727 million barrels, the U.S. Strategic Petroleum Reserve (SPR) is the largest stockpile of government-owned emergency crude oil in the world. As of December 2012, it had 694.9 million barrels of inventory. The SPR was established in 1975 in the aftermath of the 1973-1974 oil embargo to provide emergency crude oil supplies for the United States. The oil is stored in underground salt caverns in Texas and Louisiana, with a planned expansion in Mississippi. (Source: U.S. Department of Energy)

Based on average daily imports, the SPR would provide 80 days of import protection. (Source: U.S. Department of Energy)

The maximum drawdown capability of the SPR is 4.4 million barrels per day. It would take 13 days from the time a presidential decision was made to tap the SPR for oil to enter the U.S. market. (Source: U.S. Department of Energy)
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Refining
ExxonMobil has the largest U.S. refinery located in Baytown, Texas, which can process 560,500 barrels of crude oil per day. However, the recently expanded Motiva refinery in Port Arthur, Texas, has a capacity of 600,000 barrels of crude oil per day. Once it is fully operational, it will be the largest refinery in the United States and one of the 10 largest in the world. (Source: U.S. Energy Information Administration, Motiva Enterprises LLC)

Planned periodic shutdowns of refineries, called "turnarounds," allow for the regular maintenance, overhaul, repair, inspection and testing of plants and their process materials and equipment. They are scheduled at least 1 to 2 years in advance, and usually when demand for refined product is at its lowest level, typically early in the year. At this time, refineries also convert their "crackers" so that they can refine summer-blend fuel. (Source: American Petroleum Institute)

The length of a refinery turnaround is typically 1 week to 4 weeks, depending on the unit and the amount of maintenance needed. The industry average is about four years between turnarounds for catalytic cracking units. (Source: American Petroleum Institute)

Approximately half of the U.S. refineries have closed over the past three decades. In 1982 (the earliest data provided), there were 301 operational refineries. In January 2012, there were 144 operational refineries. The last major refinery built in the United States was completed in 1976. (Source: U.S. Energy Information Administration)

Despite the precipitous drop in the number of refineries operating in the United States, domestic refining capacity has not declined by an equal percentage. Increases in facility size and improvements in efficiencies have offset much of the lost physical capacity of the industry. In 1982, the United States had a combined capacity of 17.9 million barrels of crude oil per day. In 2012, combined capacity was 17.3 million barrels per day. (Source: U.S. Energy Information Administration)


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Distribution

U.S. Infrastructure
The U.S. petroleum distribution industry includes:

  • 144 refineries
  • 200,000 miles of crude oil and refined petroleum product pipelines
  • 38 Jones Act vessels (U.S. flag ships that move products between U.S. ports)
  • 3,300 coastal, Great Lakes and river tank barges
  • 200,000 rail tank cars
  • 1,400 petroleum product terminals
  • 100,000 tanker trucks

(Source: American Fuel & Petrochemical Manufacturers)

Tankers
Shipping oil from Venezuela to the U.S. takes approximately 6 to 8 days (roundtrip); shipping oil from the Middle East to the United States takes between 40 to 45 days (roundtrip). During this journey, the price €" and ownership €" of the oil can change a number of times. (Source: American Petroleum Institute)

Crude oil from the Middle East is moved mainly by Very Large Crude Carriers (VLCCs) capable of delivering 2 million barrels per trip. (Source: U.S. Energy Information Administration)

Pipelines
The first oil pipeline in the United States was built in 1865, following the 1859 discovery of oil in Pennsylvania. Today, pipelines are the most important petroleum supply line in the United States for transporting crude oil, refined fuel and raw materials. Pipelines move 70% of the ton-miles of petroleum transported annually. The rest is transported via water carriers (23%), trucks (4%) or rail (3%). (Source: Association of Oil Pipe Lines)

Pipelines range in size from eight inches to over 30 inches, and transport crude oil and more than 50 refined petroleum products, including various grades of motor gasoline, home heating oil, diesel fuel, aviation fuel, jet fuels and kerosene. Almost all gasoline is transported via pipeline from refineries to terminals. (Source: Association of Oil Pipe Lines)

Interstate petroleum pipelines annually transport 11.3 billion barrels of product (31 million barrels per day), of which 52% is crude oil; the remaining is refined product. The cost to transport a barrel of refined gasoline from Houston to the New York harbor is about $1, which equates to about 2.4 cents per gallon. (Source: Association of Oil Pipe Lines)

The Colonial Pipeline, the major product pipeline that stretches from Texas to New Jersey, transports almost 40 different formulations of gasoline alone €" different grades of each mandated type of gasoline, the requirements for which vary seasonally and regionally. Liquefied ethylene, propane, butane and some petrochemical feedstocks are also transported through oil pipelines. (Source: Association of Oil Pipe Lines)

Product moves through pipelines at 3 to 8 miles per hour (about a walking pace) depending upon line size, pressure and other factors such as the density and viscosity of the liquid being transported. At these rates, it takes from 14 days to 22 days to move liquids from Houston to New York City. (Source: Association of Oil Pipe Lines)

There are approximately 200,000 miles of oil and refined product pipelines in the United States. (Source: Association of Oil Pipe Lines)
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Types of Fuel Sales
Petroleum products may be sold at any of the following levels:

  • Spot market: refers to the one-time sale of a quantity of product "on the spot," in practice typically involving quantities in thousands of barrels at a convenient transfer point, such as a refinery, port or pipeline junction. Spot prices are commonly collected and published by a number of price-reporting services.
  • Terminal, or "rack": sales of product by the truckload (typically about 8,000 gallons to 9,000 gallons) at the loading rack of a product terminal, supplied from a refinery, pipeline or port.
  • Dealer tank wagon, or "DTW" €" sales of a truckload or less of product, delivered into storage at a retail outlet.
  • Retail: sales to the consumer, normally occurring at a service station, convenience store or other retail outlet. Larger consumers, such as commercial or government vehicle fleets, may buy directly from wholesalers in larger quantities.

(Source: "Gasoline Price Pass-through," published January 2003 by the U.S. Energy Information Administration)

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Prices & Expenses

Prices
Brent spot oil prices averaged $111.65 per barrel in 2012. They are expected to average $105.17 in 2013. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

The average cost of imported oil was $100.58 per barrel in 2012 and is expected to be $94.50 per barrel in 2013. The refiner average acquisition cost (which includes both domestic and imported oil prices) was $100.22 per barrel in 2012. It is expected to be $94.27 per barrel in 2013 and $95.75 per barrel in 2014. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

With 42 gallons in each barrel of oil, a $1 change in the price of a barrel of oil roughly translates to a 2.4-cent change per gallon at the pump.

U.S. retail (regular) gasoline prices averaged a record $3.63 in 2012, and are expected to average $3.44 per gallon in 2013. On-road diesel fuel averaged a record $3.97 per gallon in 2012, and is expected to decrease to $3.87 per gallon in 2013. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 8, 2013)

Average gas prices in California hit $4.67 in early October, the highest price recorded for a mainland state. (Source: Oil Price Information Service data collected for AAA, in cooperation with Wright Express)

The year 2013 began with gas prices at a record high to start a year and nearly double the prices from 2009.

  • 2013: $3.30 per gallon
  • 2012: $3.30
  • 2011: $3.07
  • 2010: $2.67
  • 2009: $1.68
  • 2008: $3.11
  • 2007: $2.33

(Source: U.S. Energy Information Administration, Gasoline and Diesel Fuel Update)

The price "pass-through" of price adjustments from the wholesale spot market to the retail market is complete within 2-1/2 months, with about 50% of the change occurring within 2 weeks and 80% within 4 weeks. The average speed of pass-through is significantly more rapid for diesel fuel, possibly reflecting fewer middlemen, on average, transacting for each gallon of diesel fuel as opposed to gasoline. (Source: "Gasoline Price Pass-through," published January 2003 by the U.S. Energy Information Administration)

Price volatility has been extreme since 2000. Crude oil prices have fluctuated between a low of $18.28 in November 2001 to a high of $147.27 per barrel in July 2008. Gasoline prices fluctuated between a low of $1.06 in December 2001 to a high of $4.11 in July 2008.  (Source: AAA/U.S. Energy Information Administration data)

Since the final implementation of the Clean Air Act Amendments in 2000, the seasonal transition to summer-blend fuel has helped gasoline prices rise significantly before they reached their peak, with increases ranging from a low of 20 cents in 2003 to a high of $1.13 in 2008. The average annual increase since 2000 is 54 cents. On a percentage basis, this increase has ranged from 9.2 percent to 42.2 percent. Can the president "control" gas prices? The numbers don't appear to support this conspiracy theory. Three of the five highest percent increases have been in presidential election years.

Year

Date

Price

Peak Date

Price

Increase

% increase

2012

Feb. 6

$3.482

April 2

$3.941

$0.459

13.2

2011

Feb. 7

$3.132

May 9

$3.965

$0.833

26.6

2010

Feb. 1

$2.661

May 10

$2.905

$0.244

9.2

2009

Feb. 2

$1.892

June 22

$2.691

$0.799

42.2

2008

Feb. 4

$2.978

July 21

$4.104

$1.126

37.8

2007

Feb. 5

$2.191

May 21

$3.218

$1.027

46.9

2006

Feb. 6

$2.342

May 15

$2.947

$0.605

25.8

2005

Feb. 7

$1.909

April 11

$2.280

$0.371

19.4

2004

Feb. 2

$1.616

May 24

$2.064

$0.448

27.7

2003

Feb. 3

$1.527

March 17

$1.728

$0.201

13.2

2002

Feb. 4

$1.116

April 8

$1.413

$0.297

26.6

2001

Feb. 5

$1.443

May 14

$1.713

$0.270

18.7

2000

Feb. 7

$1.325

June 19

$1.681

$0.356

26.9

(Source: U.S. Energy Information Administration)

Taxes
Gasoline taxes averaged 48.8 cents per gallon in January 2013. This total includes 18.4 cents per gallon in federal taxes, an average state excise tax of 21.0 cents per gallon and 9.4 cents per gallon in other taxes (sales taxes, gross receipts taxes, local taxes, etc.). (Source: American Petroleum Institute)

On average, gas taxes in 2012 were about $283 per vehicle. (Sources: American Petroleum Institute, U.S. Energy Information Administration)

The states with the highest gasoline taxes, as of January 2013, are:

  • New York (69.0 cents per gallon)
  • California (67.1 cents)
  • Hawaii (65.5 cents)

(Source: American Petroleum Institute)

The states with the lowest gasoline taxes, as of January 2013, are:

  • Alaska (26.4 cents per gallon)
  • Wyoming (32.4 cents)
  • New Jersey (32.9 cents)

(Source: American Petroleum Institute)

Diesel fuel taxes averaged 54.4 cents per gallon in January 2013, which includes 24.4 cents per gallon in federal taxes. The state with the highest total diesel fuel taxes was Connecticut (80.6 cents per gallon; the state with the lowest was Alaska (32.4 cents per gallon). (Source: American Petroleum Institute)

Expenses
Producing a barrel of oil costs $33.76 in the United States. About two-thirds of the cost is associated with finding the oil and gas, and the other third is associated with lifting it from the ground. In the United States, it is much more expensive to produce oil and gas offshore ($51.60) than onshore ($31.38). The average producing cost in all other countries is $25.08, with a low of $16.88 in the Middle East. (Source: "Performance Profiles of Major Energy Producers, 2009," U.S. Energy Information Administration)

Factoring in all gasoline sales €" whether the customer paid by cash, check or by either debit or credit card €" credit and debit card fees averaged 5.7 cents per gallon in 2011. Convenience store industry credit and debit card fees ($11.1 billion) in 2011 were again more than convenience store industry profits ($7.0 billion). (Source: NACS State of the Industry data)

Nearly three quarters (72%) of all transactions at the pump are by plastic €" either debit or credit card €" but many markets see card usage at 80% or more, with some stores seeing 100% payment by plastic. (Sources: NACS 2013 Consumer Fuels Report, member surveys)

Margins
The gross margin (or markup) on gasoline in 2012 was 18.4 cents per gallon, or 5.1%. Over the past five years, retailer gross margins have averaged 16.9 cents per gallon. (Source: OPIS)

On a cents-per-gallon basis, gross margins in 2012 were near the record set the year prior. However, on a percentage basis, margins in 2012 tied the 14-year low set in 2007. (Source: OPIS)

  • 2012 - 18.4 cents (5.1% of price of fuel)
  • 2011 - 18.5 cents (5.3%)
  • 2010 - 16.3 cents (5.9%)
  • 2009 - 13.1 cents (5.6%)
  • 2008 - 18.0 cents (5.6%)
  • 2007 - 14.2 cents (5.1%)
  • 2006 - 13.8 cents (5.4%)
  • 2005 - 14.8 cents (6.5%)
  • 2004 - 12.8 cents (7.0%)
  • 2003 - 13.2 cents (8.5%)
  • 2002 - 9.7 cents (7.2%)
  • 2001 - 12.2 cents (8.5%)
  • 2001 - 12.7 cents (8.5%)
  • 1999 - 13.0 cents (11.1%)

(Source: OPIS)

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Retail Operations

Branding
While about half of the more than 123,289 convenience stores selling gasoline are "branded" outlets selling a specific refiner's brand of fuel, they are typically not owned by the refiner. This is even more apparent with the five major integrated oil companies. Today, major oil companies own and operate less than 0.4% of all convenience stores in the U.S.: Chevron Corp. (415 stores), Shell Oil Products US (38 stores), ExxonMobil Corp. (13 stores), BP North America (3 stores) and ConocoPhillips Inc. (2 stores). (Source: Nielsen data)

Major oil companies own very few retail fueling outlets, but many stations do have contracts to sell a specific brand of fuel. The top branded retail outlets in 2011 were:

  • Shell Oil Products U.S. (14,000 sites)
  • BP America Inc., including ARCO (11,300 sites)
  • Chevron Products Co (8,000 sites)
  • ExxonMobil (7,753 sites)
  • ConocoPhillips (6,875 sites)

(Note: These figures include all gasoline retailers, not just convenience stores) (Source: National Petroleum News' MarketFacts 2012)

Fueling Sites
There were 156,065 total retail fueling sites in the United States in 2012. This is a steep and steady decline since 1994, when the station count topped 202,800 sites. (Source: National Petroleum News' MarketFacts 2012)

As of December 31, 2011, there were 123,289 convenience stores selling motor fuels in the United States. This represents 82.6% of the 149,220 convenience stores in the country. (Source: NACS/Nielsen 2013 Convenience Industry Store Count)

Convenience stores sell approximately 80% percent of the motor fuels purchased in the United States. (NACS State of the Industry data)

Most convenience stores selling motor fuels are one-store operations; 58.6% (72,206 stores) of the country's 123,289 convenience stores selling fuels are one-store operations.. (Sources: NACS/Nielsen 2013 Convenience Industry Store Count)

In addition to convenience stores and gas stations, there are 4,893 big-box retailers that sell fuel. The top five hypermarkets, by store count, in fuels retailing are:

  • Kroger (1,090)
  • Walmart (1,036 stores)
  • Sam's Club (462)
  • Safeway (342)
  • Costco (336)

(Source: Energy Analysts International, July 2012)

As of July 2012, hypermarket retail fueling sites sold an estimated 12.4% of the motor fuels purchased in the United States. These sites sell approximately 275,000 gallons per month, more than twice the volume of a traditional fuel retailer. (Source: Energy Analysts International)

The percentage of fueling outlets offering diesel fuel increased from 35.4% in 1997 to 52.1% in 2007. (Source: U.S. Bureau of the Census)

Alternative fueling stations are growing across the country. There are now about 8,000 stations (about 5% of all fueling outlets) that offer public access to alternative fuels in the lower 48 states: Electricity (2,634 sites), propane (2,465 sites), E85 (2,271 sites), compressed natural gas (447 sites), liquefied natural gas (19 sites) and hydrogen (5 sites). (Source: U.S. Department of Energy, Alternative & Advanced Vehicles Data Center, as of March 27, 2012.)

Sales
Motor fuels sales in convenience stores totaled $486.9 billion in 2011 and accounted for more than two-thirds of the convenience store industry's sales in 2011 (71.4%). However, because of low margins, motor fuels sales contributed to roughly one-third of total store gross margin dollars (35.9%). The average convenience store in 2011 sold roughly 128,000 gallons of motor fuels per month, which translates into approximately 4,000 gallons per day. (Source: NACS State of the Industry data)

Nearly three-quarters (73%) of all fuels customers at convenience stores do not purchase an in-store item. Interestingly, pay-at-the-pump purchasers are more likely to buy something inside the store. One third (33%) of pay-at-the-pump customers buy something inside the store, compared to only 19% of customers who pay inside. (Source: VideoMining Corp., 2010)

Sales of premium and mid-grade have declined over the past decade as consumers trade down octane levels when prices increase. Regular grade gasoline accounted for 87.2% of all gasoline gallons sold in 2011, an increase from 86.4% in 2010, and a sharp increase from 78.2% in 2002. (Source: U.S. Energy Information Administration, Supplier Sales Volume Report)

Gasoline theft, also called "drive-offs," is a problem at stores that don't require prepay. The average loss per store in 2011 was $1,824, more than double the total in 2009, when the figure was $761. However, it is difficult to calculate an industry-wide number, since prepay is the norm at the vast majority of stores. Gasoline theft peaked in 2005 when it cost the industry an estimated $300 million. It has declined considerably since September 2005 (post-Hurricane Katrina when gasoline rapidly increased and topped $3 per gallon) as more stations began mandating prepay to stop theft. (Source: NACS State of the Industry data)


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Glossary of Terms
Balkanization: The end-result of the patchwork quilt of unique fuels required throughout the United States. Unique fuel regulations have created gasoline zones across the U.S. where only certain fuels can be sold. This "Balkanization" of the fuel supply has made it more expensive and difficult to produce and deliver gasoline.

Boutique Fuels: Unique gasoline blends required for a specific region or metropolitan area of the U.S. Prior to 1990, six types of gasoline were sold in the United States. Today, there are 15 unique gasoline formulations (not including regular/mid-grade and premium octanes for each fuel) manufactured for, and sold within, specific markets throughout the country that are mandated by federal, state, and local governments. These fuels are not interchangeable with fuel blends sold in other areas of the country. Federal law limits the number of boutique fuels authorized for use in the nation, but does not include state biofuel mandates in its definition of these fuels. Consequently, states have proceeded to require the use of certain biofuel products. These mandates pose similar challenges to the motor fuels supply and distribution system as other types of regulated boutique fuels.

Branded Retail Outlet: A retailer that sells a motor fuel with the brand name of a major oil company or refiner, but is not necessarily owned (and is usually not owned) by that company. Branded retailers benefit from marketing and advertising support, consumer brand loyalty and priority access to gasoline supplies. Lately, a new benefit has emerged, with branded stations participating in loyalty programs with grocery chains, in particular. In return, the branded marketer pays a surcharge for the use of the brand and the benefits that come with it.

Ethanol-Blended Fuels (E10, E15, E85, etc.): E10 (90% gasoline and 10% ethanol) is approved for use in all new U.S. automobiles. Higher blends of ethanol can be used in flex fuel vehicles and under some other conditions. E15 is 85% gasoline and 15% ethanol and is approved by the Environmental Protection Agency for use only in 2001 and new vehicles, but not in older vehicles, motorcycles, watercraft or small engines. However, E85 is not 85% ethanol; it is a mixture of gasoline with 51-83% ethanol.

Reformulated Gasoline (RFG): The 1990 Clean Air Act Amendments required the nation's most polluted metropolitan areas to sell a special blend of gasoline to reduce the emissions of ozone forming volatile organic compounds (VOCs) and toxic air pollutants. The first phase of the RFG program began in 1995 and the second (current) phase began in 2000. RFG is required in cities with high smog levels and is optional elsewhere. RFG is currently used in 18 states and the District of Columbia. More than 30 percent of gasoline sold in the U.S. is reformulated.

Fungible: Interchangeable. The U.S. gasoline system was designed to facilitate the efficient flow of gasoline to all regions of the nation, allowing the same gasoline formulation to be sold in all markets. The system is no longer fungible, with 15 unique gasoline formulations required in specific markets throughout the United States.

Organization of Petroleum Exporting Countries (OPEC): OPEC an international organization of 11 developing countries €" from Africa, Asia, the Middle East and Latin America €" that are heavily reliant on oil revenues as their main source of income. OPEC's members €" Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela €" collectively supply about 35% of the world's oil output, and possess more than three-quarters of the world's total proven crude oil reserves. Twice a year, or more frequently if required, the oil and energy ministers of OPEC member countries meet to decide on its output level, and consider whether any action to adjust output is necessary in the light of recent and anticipated oil market developments.

Petroleum Administration for Defense Districts (PADD): The U.S. Department of Energy divides the United States into five regions for planning purposes. The result is a geographic aggregation of the 50 states and the District of Columbia into five Districts, each operating essentially as its own market. The five districts are: PADD I (East Coast), PADD II (Midwest), PADD III (Gulf Coast), PADD IV (Rocky Mountain) and PADD V (West Coast).



(Source: EIA)

Pass-Through: The time from which wholesale price changes fully reach consumers. Wholesale gasoline price increases €" or decreases €" paid by retailers are not immediately passed on to consumers, but are spread over a period of time. A large portion of the price change is passed through immediately, with the rest spread over a period of time that could be as long as eight weeks. Pass-throughs help minimize the price volatility of gasoline.

Petroleum Retailer: Refers to convenience stores that sell motor fuels. As of December 31, 2012, a total of 123,289 convenience stores were selling motor fuels in the U.S. (82.6% of country's 149,220 convenience stores). These fuels retailers are also referred to as "petroleum marketers."

Refinery: Where crude oil is refined into a specific blend of gasoline or other fuels (such as diesel, kerosene, etc.) or for other oil-based applications. There are currently 144 operable refineries in the U.S. €" less than half the number 30 years ago. In addition, production capacity has decreased from 17.9 in 1982 to 17.3 million barrels per day in 2012. No major new refinery has been built in the United States since 1976.

Replacement Costs: The cost to acquire the next shipment of fuel. This price is almost always different than the cost of the gas that retailers have in their tanks. Because of the enormous volume of fuel sold €" a typical store sells 128,000 gallons of gas a month €" retailers must price their fuel based on their estimated cost of the next delivery. Even slight wholesale price variations can increase a retailer's replacement cost by hundreds €" or even thousands €" of dollars. The importance of replacement costs is particularly acute for smaller businesses, which have less cash on hand to meet payments.

Spot Market: This market is usually comprised of motor fuels that have not been pre-allocated to the integrated or branded outlets. Retailers and other fuel distributors purchase fuel at terminals, or "racks," where costs fluctuate based on current prices.

Summer-Fuel Blends: Several state and local governments have developed fuel regulations to control for the formation of smog during summer months. These generally require that gasoline sold during the summer have a lower Reid vapor pressure (RVP), which measures the gasoline's potential to emit vapors, which contribute to the formation of smog.

Terminal: A bulk gasoline terminal is a gasoline storage facility that receives gasoline by pipeline, ship or barge, and has a gasoline throughput greater than 20,000 gallons per day. The loading rack at the terminal is the broad term for the the loading arms, pumps, meters, shutoff valves, relief valves and other piping and valves that fill delivery tank trucks picking up product at the terminal.

Tight Supplies: Describes a situation in which demand for gasoline €" or crude oil €" exceeds the supply available, and prices rise based on this supply/demand imbalance. Also known as "market shorts" or "upsets."

Ultra Low Sulfur Diesel (ULSD): ULSD is a clean-burning diesel fuel that is defined by the United States Environmental Protection Agency (EPA) to have a maximum sulfur content of 15 parts per million (ppm). It was phased into use between 2006 and 2010.

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