Trends Watch: What Declining Gas Consumption Means for You
Where do you see your fuel operations heading in 10 years, 20 years — how about 32 years? That may seem like a long way out, but with the ever-changing transportation sector, forward-thinking fuel providers and retailers are looking that far ahead now.
And what they’re finding is the future of gasoline is uncertain. That may be putting it nicely. The U.S. Energy Information Administration (EIA) projects that motor gasoline consumption will decrease 31 percent between 2017 and 2050. Why? The main culprit is increasing fuel economy standards.
So how should you react? Think of it this way: What would a 31 percent drop in gasoline sales mean for your business? Also, if you are a convenience store or truck stop, what would it mean for your in-store sales if traffic at your pumps dropped significantly?
One way companies that sell fuel are responding is by adding diesel to their offerings. Over that same 2017 to 2050 timeframe, the EIA projects diesel consumption to remain steady. Yes, diesel vehicles will also become more fuel efficient in the coming decades, but the EIA says there will also be rising demand for freight truck travel.
Companies that already sell diesel fuel are putting an extra emphasis on that aspect of their business. Another way they are trying to differentiate themselves from the competition is by adding diesel alternatives like biodiesel and renewable diesel. Interest in the renewable fuels is being driven by a desire to reduce air pollution and, for biodiesel in particular, the potential to help improve fuel margins.
With biodiesel blends, it’s also a matter of meeting demand from trucking fleets. A new Fleet Purchasing Outlook study by NTEA, the Association for the Work Truck Industry, found that biodiesel was the most popular alternative fuel among fleets in 2018 and the top pick for future interest.
All of this adds up to opportunity for fuel suppliers and retailers. With demand for diesel projected to remain strong for the next three decades, the fuel could offer a way to offset some of the losses from lower gasoline sales and expand your customer base. And biodiesel can enhance those benefits even more.
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