Marketing

Marketing is the wholesale and retail distribution, including tanker truck transportation, of refined petroleum products such as gasoline and diesel fuel to business, industry, government and public consumers. This section addresses some commonly asked questions for consumers.

Frequently Asked Questions
This section provides general information about how petroleum products are distributed and sold at service stations around the country. It answers some of the commonly asked questions about retail service stations.

When was the first service station established?
How many service stations are there in the United States?
What are the big trends in service stations these days?
I see gasoline trucks going traveling on the road daily. Are they delivering product right from the refinery?
May you pump your own gas in all 50 states?
Do most customers pump their own gasoline?
I sometimes notice stations closing temporarily and digging up the site. What were they doing?
Does this apply only to service stations?
How long has this law been on the books?
How do I get more information on this requirement?
Why are prices posted in fractions?
Do the major oil companies own all the service stations in this country?
Who owns the rest of the stations?
Can these independent owners also sell my favorite brand of gasoline?
How much tax do we pay on a gallon of gasoline?
What does the government do with the money?
Why is the price of gasoline so much higher in other countries?

1. When was the first service station established?
API’s historical files note that the first "filling" station was opened in Seattle in 1907 by Standard Oil of California, which is now Chevron Co. USA. The "filling" station included a hose that dispensed gasoline directly into the vehicle from an elevated tank. Charles Duryea had invented the gasoline-powered horseless carriage in 1893, but there were few owners in those early years. They purchased gasoline from bulk depots, often in five gallon containers. The industry was transformed in 1908 when Henry Ford mass- produced the first Model T, and many retail locations began selling gasoline at the curb. The first "drive-in" service station opened on December 1, 1913 in Pittsburgh, Pennsylvania.

2. How many service stations are there in the United States?
The National Petroleum News compiles that information every year and gave us permission to report it on our Website. The trade publication’s July 2006 issue reported there were 167,476 locations nationwide selling gasoline, including service stations, truck stops, convenience stores and marinas.

3. What are the big trends in service stations these days?
Service stations keep changing to meet the needs of their customers. One of the biggest trends in recent years has been "pay-at-the-pump," which allows customers to pay by credit card right at the pump. Some companies are also experimenting with pumps that will accept cash as well. Responding to the interest of their customers in one-stop shopping, some service stations have larger convenience stores, some are associated with mass merchandisers, while others share space with some of the popular quick-serve restaurant operations.

4. I see gasoline trucks going traveling on the road daily. Are they delivering product right from the refinery?
Sometimes, but most often they are delivering fuel to a service station from a bulk terminal that has been supplied by pipeline. There are 142 refineries operating in the United States.From the refineries, the products are transported by barge, truck or pipeline.

The majority of the product is moved by underground pipelines and stored in large aboveground storage tanks at 1,300 locations around the country. These locations are called terminals.

Transport trucks, especially designed to carry petroleum products, pick up product at the terminal and deliver it to the underground storage tanks at service stations.

5. May you pump your own gas in all 50 states?
No. New Jersey and Oregon have laws that allows only an attendant to pump gasoline. Customers in all other 48 states may pump their own gasoline.

6. Do most customers pump their own gasoline?
Yes. The first self-serve station opened in 1947 in California. Self-serve really grew in popularity in the 1970s. By 1993, the most recent year for which data are available, self-serve accounted for 88 percent of all sales in states where it was legal.

7. I sometimes notice stations closing temporarily and digging up the site. What were they doing?
They were likely making improvements to protect the environment, especially against potential leaks from underground storage tanks. By law, older tanks had to be replaced, but newer tanks can be "upgraded" to include improved leak detection systems and protection against future corrosion.

8. Does this apply only to service stations?
No, The law covers all underground tanks containing petroleum products. Police department, school districts, automobile dealers and many other facilities have underground storage tanks on their property. The only exemptions are farm or residential tanks of 1,100 gallons or less capacity; and residential commercial or industrial heating oil tanks used for consumptive use on the premise where the heating oil is stored.

9. How long has this law been on the books?
Congress passed Subtitle I of the Resource Conservation and Recovery Act in 1984, which required the U.S. Environmental Protection Agency to develop a comprehensive program to protect, detect and correct releases from underground storage tanks. The EPA Office of Underground Tanks was organized to develop the technical standards, and those regulations were issue 4 in September 1988. The low provided for a 10-year phase-in of the requirement, so the work had to be completed by December 1988.

10. How do I get more information on this requirement?
The U.S. Environmental Protection Agency's Office of Underground Storage Tanks has produced a number of documents explaining the requirements.

11. Why are prices posted in fractions?
The idea of posting the prices in fractions began back in the 1930s, when "discount" service stations opened and owners promoted their price on their signs out front. To emphasize the discount, these independents priced their product in fractions, sometimes at 1/2 cent intervals, but often at 9/10.

12. Do the major oil companies own all the service stations in this country?
No. The major integrated oil companies own about 5% of the 164,000 retail stations and operate less than half of the retail stations that they do own. When a station bears a particular API member’s brand, it does not mean that the API member owns or operates the station. The vast majority of branded stations are owned and operated by independent retailers licensed to represent that brand. According to the National Association of Convenience Stores (NACS), more than half of the 164,000 retail stations in the US are owned by an individual or family. Through various branding agreements, approximately 40% of the retail stations in the US sell fuel under API members’ brands. See U.S. Retail Service Station Outlets Chart and Retail Service Station Outlets Ownership Chart.

13. Who owns the rest of the stations?
Independent owners. They may own just one station, or they could own several stations. Those who own several stations are often called "jobbers" or distributors.

14. Can these independent owners also sell my favorite brand of gasoline?
Yes. Independents and chains retailers can also sell gasoline under their own names.

15. How much tax do we pay on a gallon of gasoline?
Depending on where you live, you could pay state, federal and also local taxes on gasoline and diesel fuel. From 2000 to 2007, taxes averaged about 24% of the retail gasoline price.

The Energy Information Administration has a brochure called A Primer on Gasoline Prices which has detailed information on gasoline prices.

16. What does the government do with the money?
Traditionally the bulk of the money is used for building and repairing road and bridges.

17. Why is the price of gasoline so much higher in other countries?
Many countries assess higher tax rates and use the revenue for their general fund budget. For example, four countries, the Netherlands, France, Italy and Belgium assess more than $3 in taxes on every gallon of gasoline.