LONDON, Ont.—More of Canada’s gas stations are becoming divorced from the crude oil sectors that have traditionally maintained a “well-head to gas tank” vertical integration of assets and operations, a new survey shows.
According MJ Ervin & Associates survey, only 14 per cent of Canada’s more than 12,000 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 per cent of all retail locations, 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 National Retail Gasoline Site Census 2012 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 per cent of Canada’s retail gas stations, up from 70 per cent in 2006, and reflect 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.
Overall, the total number of retail gas stations in Canada stands at 12,285 as of December 31, 2012, a number MJ Ervin & Associates claims to show a continual downward trend since 1989, when over 20,000 stations existed.