Convenience Stores After Fuel

ALEXANDRIA, Va. – On this week’s episode of Convenience Matters, “Are Gas Stations Ready for Vehicle Fuel Economy Changes?,” the Fuels Institute’s Donovan Woods, director of operations, and John Eichberger, executive director, talk with Chris Brown, analyst of global automotive for Stratas Advisors, about the implications of vehicle fuel efficiency on gas stations and convenience stores.

The higher the average miles per gallon vehicles get, the fewer trips to the gas station drivers need to make. While the Obama administration originally set CAFE (corporate average fuel economy) to be 54.5 miles per gallon by 2025, a current proposal would freeze CAFE at the 2020 level of around 37 mpg. “The miles per gallon is designed for an environmental purpose,” reminded Eichberger, “and it’s important to recognize that CAFE is about improving the environment.”

So why should fuel retailers care about vehicle mile per gallon? “Because fuel economy is derivative of fuel demand—it drives fuel demand,” Brown said. “Retailers are concerned with people coming to the c-store primarily for gasoline or whatever the liquid fuel they’re getting there. … So they want to know if people are still going to come to their stores” [if they won’t have to fill up as often].

Brown pointed out that all automotive manufacturers selling in the United States “are selling elsewhere in the world.” With many countries, including China, tightening regulations on environmental concerns, such as air pollution, many automakers are already developing vehicles for market that are more environmentally-friendly—and potentially less dependent on gasoline. “Vehicles are already being made that comply with the 2020 timeline,” Brown said.

Each week a new Convenience Matters episode is released. The podcast can be downloaded on iTunes, Google Play and other podcast apps, and at www.conveniencematters.com. Episodes have been downloaded by listeners more than 60,000 times in 80 countries.