LONDON, Ontario – Canada’s
gas stations are increasingly becoming divorced from the crude oil producing
and refining sectors, according to a recent survey of Canada’s retail gasoline
facilities by petroleum consultancy MJ Ervin & Associates.
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. These numbers represent a continuation of a
downward trend since 1989, when more than 20,000 stations existed.
“We have seen virtually no
increase in the retail gasoline margin in over 25 years,” said Michael Ervin of
MJ Ervin & Associates, in a press release. “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% 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% 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 more than 60 petroleum marketers in Canada who do not operate refineries,
and more than 90 distinct brands of gasoline.
These non-refiner
marketers represent 77% of Canada’s retail gas stations, up from 70% in 2006,
and reflecting a shift in retail gasoline ownership from refiners to
non-refiners. A growing segment of this sector are big box retailers, which
have proliferated over the past decade and through competitive pricing and
other incentives, has contributed to the overall decline in conventional gas
stations.