Exxon Mobil Selling Company-Owned Stations

Even with historically high gas prices, ExxonMobil has decided to call it quits in running gas stations because profits are so slim. They are pursuing a model in which distributors, a type of franchisee, take over all stations.

ExxonMobil announced last week that they will be selling all of their 820 company-operated and 1,400 company-owned stations. The problem is that the company-owned stations "have seen retail profit margins squeezed by high crude oil prices."

"We are in a very, very challenging market. Margins are reduced," ExxonMobil spokeswoman Prem Nair told Reuters. "We feel the best way for us to grow and compete is through our distributor network."

Despite historic profits, gas companies are struggling with earnings in retailing gas. Those paper-thin profits for franchisees are illustrated today in the blog, Some Gas Stations Say No to Credit Cards.

Currently some 75% of the company's branded stations, or 12,000, are ExxonMobil distributorships. The rest will be converted to franchises over the next few years. The company finds itself in the enviable position of being able to focus on higher returns in distributing oil rather than retailing it.

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