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The decline of the petrol station

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The number of petrol stations is falling in the UK, but climate change action has little to do with it. Instead, it is a business conscious decision.

There was a time when arriving at a petrol station was part of the romance of driving. Many of them were even stylish examples of contemporary design. 

But let’s face it. The picture hasn’t looked so great in the past few decades, especially for independent operators of filling stations, according to data by Experian and the Petrol Retailers Association (PRA).

However, action to mitigate climate change and efforts to pump less CO2 into the atmosphere had surprisingly little to do with the fall in numbers. One central reason is purely economic, as PRA chairman Brian Madderson explains.

The proliferation of petrol filling stations  across the UK peaked at around 40,000 sites in the 1950s. Since then, they faced a steady decline.

In 2000 the count fell to 13,107 due to consolidation by oil companies, and today there are just 8,400. Larger and more modern stations helped force the closure of smaller rural and urban sites, Madderson says. A sharp drop between 2000 and 2010 gave the impression of a gloomy decline. There were about 5,000 closures, of which 40 per cent were dealers, due to an aggressive pricing strategy of cheap, unbranded fuel by the hypermarkets.

But since 2010 dealer numbers have remained relatively high despite lots of closures. Since 2015 the total number of sites remained static as each year new-to-industry and return-to-industry sites have offset the number of closures.

Madderson expects this trend to continue for a few more years. But there are differences in how operators make their money today.

Nowadays fuel stations depend heavily on sales from the shop. Retailers often make more on selling a coffee than on 40 litres of fuel, according to Madderson. Data shows that demand for petrol and diesel fuel has changed little altogether, though the balance between the two has shifted. But it is true that people use 33 per cent less petrol per 100km today than they did in 1997, thanks to better technology.

More people are driving electric vehicles today, but it seems unlikely that this has had much effect on the number of filling stations. Their stark decline eased off just as EV charging points started to sprawl.

In fact, the continuing ubiquity of petrol stations can be witnessed from far, far away.

Were an onlooker able to make out every European petrol station from space (see maps) there would be little need to draw country boundaries or mark large cities. Data analysed by E&T from OpenStreetMap shows how petrol stations can be a proxy for population density.

Which country in Europe has still the most filling stations? With more than 20,000 Italy is in the leads, followed by Germany and France.

With coronavirus affecting markets and citizens widely, especially in Italy, E&T asked Madderson how COVID-19 could influence the petrol station business. In Britain so far coronavirus had shown "almost no effect" on the business of petrol station retailers. “We might see a small reduction in demand if business cuts back on travelling but again no signs in the present containment phase".

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