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Gas Stations Turn One Hundred

1950 service station. Photo via Wikipedia
1950s gas station. Photo by B Robinson/Wikipedia

ALEXANDRIA, Va. — Last month marked the hundredth anniversary of the American gas station. While fueling stations existed before 1913 — after all, Karl Benz is credited with inventing the first gasoline-powered automobile in 1885 — fueling was far from convenient a century ago. Early fueling sites were a patchwork collection of pharmacies or even ramshackle sheds and blacksmiths' shops where fuel was usually dispensed from a container, as opposed to being directly pumped into a vehicle's tank.

That all changed 100 years ago when Gulf Refining Company opened the nation's first drive-up service station in Pittsburgh, Pennsylvania, designed and built specifically to sell fuel. On December 1, 1913, the station opened and sold 30 gallons of gasoline — less than one percent of the daily sales volume of a fueling station today.

Self-service pumps and convenience stores

Customers at that first station would not recognize today's fueling outlets. Gasoline retailing has evolved from full-service attendants with crisp, white uniforms to modern, state-of-the-art convenience stores offering self-service gasoline (except for New Jersey and Oregon where self-serve is prohibited). In addition, today's gas stations sell far more than auto-related products like motor oils, lubricants and batteries, and are known as much for their in-store snacks, drinks and food — such as the latest trend of "gas station gourmet" outlets — as for their fueling.

Gas prices have changed. Despite the higher posted prices of today, gasoline is a relative bargain. Back on December 1, 1913, gas cost 27 cents a gallon — which equates to $6.39 per gallon in today's dollars.

Convenience stores, which today sell more than 80 percent of the gasoline purchased in the country, began entering the gasoline retailing business in the 1960s when a combination of new technologies and the lifting of state self-serve bans allowed stores to reduce labor costs and pass on savings to customers.

"That first gas station did much more than define fueling for the next century — it redefined retail and ushered in the era of convenience," said Jeff Lenard, vice president of strategic industry initiatives for the National Association of Convenience Stores (NACS). "The emphasis was squarely on service — and speed of that service, concepts that are even more important today."

Franchisees and the Petroleum Marketers Protection Act of 1978

Service station retailers organized their own trade associations. For example, the National Association of Convenience Stores, which has evolved into an association for convenience store owners and fuel retailers, was founded in 1961.  In 1948 a group of oil marketers and retailers became the National Oil Jobbers Council and in 1984, that organization changed its name to the Petroleum Marketers Association of America. And as recently as 2008, ARCO am/pm service station franchisees created their own Service Station Franchisee Association.

In 1978, petroleum marketers were able to successfully lobby to create the Petroleum Marketers Protection Act, a landmark federal law that protects gas station franchisees from termination without cause and from non-renewal by their franchisors. Franchisors argued it would be the end of gas station brands, harm consumers by corrupting quality, disrupt distribution, chop the number of gas station outlets, explode the number of torts, cripple the industry and depress the economy.

From 500 thousand vehicles to 250 million

When Gulf opened that original service station in 1913, there were approximately 500 thousand vehicles navigating almost exclusively dirt or gravel roads. Today there are more than 250 million vehicles traveling on the nation's 3.98 million miles of paved roadways.

Here are a few statistics regarding today's fueling industry, according to the National Association of Convenience Stores:

  • There are 152,995 retail fueling sites in the United States. This is a steep and steady decline since 1994, when the station count topped 202,800 sites. This count includes 123,289 convenience stores selling fuel, plus grocery stores, truck stops, traditional gas stations and low-volume fueling locations like marinas. (Source: National Petroleum News' MarketFacts; NACS/Nielsen Convenience Industry Store Count)
  • The average convenience store sells roughly 128,000 gallons of motor fuels per month, or approximately 4,000 gallons per day. (Source: NACS State of the Industry 2012 data)
  • U.S. gasoline demand is an estimated 8.7 million barrels per day in 2013, or about 40 million fill-ups per day. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook)
  • Americans traveled 8.04 billion miles per day in 2012. (Source: U.S. Energy Information Administration, Short-Term Energy Outlook)
  • While about half of the convenience stores selling gasoline are "branded" outlets that sell a specific refiner's brand of fuel, less than 0.4 percent are owned by the major oil companies. Chevron Corp. (406 stores), Shell Oil Products US (23 stores), and ConocoPhillips Inc. (1 store) still own and operate retail locations; ExxonMobil Corp. and BP North America do not own any locations. (Source: Nielsen data)
  • Small light-duty vehicles consume an average of 453 gallons of fuel per year, which equates to 1.24 gallons per day or 8.7 gallons per week. (Source: Federal Highway Administration, Highway Statistics)
  • The retail gross margin (or markup) on gasoline in 2012 was 18.4 cents/gallon, or 5.1 percent of the price of gas. Over the past five years, gross margins averaged 16.9 cents per gallon. (Source: Oil Price Information Service)
  • Nearly three quarters (72 percent) of all transactions at the pump are by plastic — either debit or credit card. (Source: NACS State of the Industry 2012 data
  • Gasoline taxes averaged 49.5 cents per gallon in October 2013; diesel fuel taxes averaged 54.8 cents per gallon in October 2013. (Source: American Petroleum Institute)
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