Fuel Oil & LP Gas Dealers Industry Overview

Excerpt from Fuel Oil & LP Gas Dealers Report

The US fuel oil and LP gas dealer (fuel dealer) industry includes about 10,000 establishments (single-location companies and branches of multi-location companies) with combined annual revenue of about $40 billion. Major companies include AmeriGas Partners, Ferrellgas Partners, and Star Gas Partners. The fuel dealer industry is fragmented: the top 50 companies account for about 40 percent of sales.

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. The industry is capital-intensive: annual revenue per employee is about $500,000.

Products, Operations & Technology

Major products sold include fuel oil (40 percent of industry sales); LP gas (40 percent); and auto fuel (10 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.