Fuel Oil & LP Gas Dealers Industry Overview

Excerpt from Fuel Oil & LP Gas Dealers Report

Companies in this industry sell fuel oil and liquefied petroleum (LP) gas, mostly used for heating and cooking. Propane accounts for the majority of LP gas sales. Major companies include AmeriGas Partners, Ferrellgas Partners, and Star Gas Partners, all based in the US, as well as Japan's Mitsui & Co, Ultrapar Participações of Brazil, and Dutch firm SHV Holdings.

Competitive Landscape

Residential, commercial, industrial, and agricultural heating needs drive demand. The profitability of individual companies depends on efficient operations, low-cost purchasing, and competitive pricing. Large companies have advantages in purchasing, finance, and distribution. Small companies can compete effectively by serving a local market, offering unique products, or providing special services. Fuel dealers compete with suppliers of other energy sources, including electricity and natural gas. The fuel dealer industry is fragmented: the top 50 companies account for about 40 percent of sales.

Products, Operations & Technology

Products sold include heating oil (about 60 percent of fuel dealers' sales) and LP gas (40 percent). Fuel oil includes various grades (mostly No. 2 for heating) and kerosene. LP gas includes bulk and bottled forms. Auto fuels include diesel fuel and gasoline. LP gas dealers may rent storage tanks to customers or have portable tank exchanges. Companies may also sell, install, or service heating equipment.