A petroleum marketer is any person or company that takes possession of refined petroleum products for the purpose of reselling those products. This broad definition of a petroleum marketer encompasses a wide range of commercial businesses from wholesale to retail operations. A petroleum marketer often owns gasoline stations, convenience stores, heating oil businesses, truck stops, lubricant warehouses, petroleum trucking companies and bulk storage facilities.
The majority of petroleum marketers are small businesses as defined by SBA. These companies are very diverse but all have one thing in common, they all bring to market liquid fuels such as gasoline, diesel, heating oil, ethanol, biodiesel, jet fuel and kerosene. They are engaged in the transport, storage and sale of petroleum products on both the wholesale and retail levels. They supply gasoline to convenience stores, diesel to truck stops, lubricants to industry and other oil products to thousands of customers in Utah. Not only are these companies primary suppliers of fuels they also own and/or operate approximately 900 retail facilities in Utah.
Many people wonder if major oil companies own most gas stations. The answer is no. Major integrated oil companies own about 2% of the 152,995 retail stations nationwide and operate about a third of the retail stations that they do own. When a station bears a particular company’s brand, it does not mean that company 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), 58% of the retail stations in the US are owned by an individual or family that owns a single store. Through various branding agreements, approximately 36% of the retail stations in the US sell fuel under major company’s brands.
Who owns the rest of the stations? Independent owners. They may own just one station, or they could own several stations, or they could own hundreds of stations. Can these independent owners also sell the major brands of gasoline? The answer is yes. Independents and jobbers can sell gasoline under the brand of one major company or multiple major companies, as well as have their own brand of fuel.
In order to meet the Renewable Fuels Standard (RFS) included as part of the Energy Independence and Security Act of 2007, gas ethanol blends have been introduced around the country, including Utah. Ethanol is a non fossil fuel that is produced from a variety of agricultural crops such as sugarcane, corn and other grains.
Almost all gasoline now has some ethanol in it but in Utah, that amount will not exceed 10%. Gasoline with 10% ethanol content is known as E10, and with 15% ethanol it’s known as E15. Ethanol flex fuel (formerly known as E85) has between 51 and 83% ethanol with the remainder being gasoline. All gasoline vehicles can use E10. E15 is only appropriate for use in Flex Fuel vehicles or a very small percentage of the newest vehicles. Anything higher than E15 ethanol content is only appropriate in Flex Fuel vehicles. Check your owner’s manual to find out what your vehicle needs.
Gasoline with 10% ethanol is approved for use by all automotive vehicle manufacturers in the U.S. and will perform properly. In addition, most small engine manufacturers also accept the use of E10, but we recommend consulting your owner’s manual for fuel recommendations.
More Information: Renewable Fuel Standard Facts (API)
Octane is the ability of a fuel to resist knock. In high-altitude areas, like Utah, fuels with an octane rating of 85 are sold because the atmosphere is at a lower pressure than at sea level. The compression pressure in a naturally aspirated engine will therefore be lower than at sea level, meaning a more "volatile" fuel can be used safely in higher altitudes (i.e., an engine that normally runs on an octane rating of 87 at sea level will run just fine on an octane rating of 85 at higher altitudes).
Gasoline is a commodity just like milk, a new car, or a pair of shoes. The only difference is that it’s at the end of an extremely large and complex industry that is affected by world politics and economies. The fact remains, however, that the basic economic principles of supply and demand still apply. The price of the major input to gasoline, crude oil, is a big factor in the price of gasoline. But it’s not the only factor. Refinery operations or disruptions, either locally or in surrounding states, can greatly affect the price of fuel. Utah’s seasonal driving seasons also play a big role in affecting the demand for gasoline. Not always, but typically, demand goes down in the winter and so do gas prices. The converse is also true. Demand is highest in the spring and summer and so are gas prices.
For a more detailed discussion, visit the Fuel Prices page in our Issues section.
More Information: What’s Up with Gasoline Prices? (API)
Since 1997, Utah’s state gasoline tax has been 24.5 cents per gallon (cpg). The federal gas tax is 18.4 cpg for a total motor fuel tax of 42.9 cpg. The state tax on diesel is also 24.5 cpg but the federal diesel tax is 24.4 cpg for a total of 48.9 cpg.
The Utah Legislature in 2015 passed a major change to the format of the State’s gasoline tax moving forward. Beginning January 1, 2016, the tax will be based on the wholesale price of gasoline, similar to a sales tax. Initially, the rate will be 12% multiplied by an implied wholesale price of $2.45/gallon for a resulting state tax rate of 29.5 cpg for both gasoline and diesel. After the actual wholesale price of gasoline exceeds $2.45/gallon, the 12% rate will be applied to the higher price and float upwards, depending on the market for gasoline.
More Information: Gasoline Tax (API)
The Utah Division of Weights and Measures, a division of the Utah Department of Agriculture, is charged with the inspection of gasoline pumps in Utah for accuracy in measurement. They also inspect storage tanks for water and test fuel for quality (octane).
More Information: Utah Division of Weights and Measures
A jobber is a person or company that purchases quantities of refined fuel from refineries either for sale to retailers (e.g., gasoline stations), or to sell directly to the users of those products (e.g., home heating oil to homeowners, lubricating oils to industrial operations or repair shops, etc.). In essence, the jobber acts as the "middleman" between the company that refines the petroleum products and those that either use them or market them at retail prices. The jobber often owns the gasoline being sold, and the station it is being sold to, but allows an operator to lease the store.