National Petroleum News (NPN) has been the independent voice of the petroleum industry since 1909 as the opposition to Rockefeller’s Standard Oil. So, motor fuels marketing and retail is not just a sideline for us, it’s our core competency.
Issue link: https://read.dmtmag.com/i/108236
NPN's State of the Industry We speak with key industry leaders heading their associations to get their take on 2012 and what lies ahead in 2013 T By KeithReid here's a touch of the movie Groundhog Day in the air as we move into 2013, where the protagonist keeps waking up in the same perpetual time loop. It's a movie we've been replaying year after year since the economic downturn of 2008 with no to low growth, official unemployment 8 percent or higher (some measures of total unemployment 14 percent or more) and a never-ending stream of new regulation impacting the energy and retail sectors. While much of the hemorrhaging that was experienced in 2008 has settled out, we are left with what can best be described as an economic malaise. Where petroleum more broadly and motor fuels specifically are concerned, the U.S. Energy Information Administration noted in its latest Short-Term Energy Outlook that we faced another year of reduce motor fuels consumption with 2012 showing a 1.6 percent decrease (300,000 bbl/d) following the 1.2 percent decrease in 2011 (230,000 bbl/d). This year is going to see a slight reversal of that trend, according to EIA, with projected total liquid fuels consumption anticipated to increase by 0.4 percent in 2013 and by about the same amount in 2014. Most of the consumption growth is anticipated to come from distillate fuel oil and liquefied petroleum gas largely linked to a return to more typical, colder winter weather. On the motor fuels side not much is expected to change, with 2013 likely to be similar to 2012. For those with retail operations, while the latest National Association of Convenience Stores' data is still several months away, the store side has generally been holding its own and has slowly managed to scratch its way back to pre-recession levels. And yet the store side is facing some of the greatest challenges on the regulatory front relative to Obamacare being codified as law of the land after 14 State of the Industry 2013 last year's surprising (regardless of your political orientation) Supreme Court decision. A traditional petroleum marketer might be able to get by under the 50 employee threshold for compliance, but any convenience operation of scale is going to have to make some very tough decisions in short order. Having noted these gloomy realities, much good news remains, at least for the industry. While we are experiencing demand destruction on the fuel side related to both the economy and looking ahead to the impact of increased CAFE fuel standards, there are exciting new developments with fuel products such as natural gas that represent expanded market opportunities for the industry. Good operations in the industry on both the traditional jobber and retail side are still able to not only keep the doors open, but make a decent profit as well as business acquisitions. And after the volatility driven challenges of recent years, there remains a tremendous number of not only good, but excellent operations forming this industry. As Friedrich Nietzsche once opined: "That which does not kill us makes us stronger," and unfortunately, we have become a very strong industry indeed. NPN Magazine n www.npnweb.com