BBC News
watch One-Minute World News
Last Updated: Monday, 24 March 2008, 10:36 GMT
Mysterious death of the petrol station
Derelict petrol station

By Andrew Sully
BBC News

It's a hub of the community under threat in harsh economic climate. Along with the post office and the local shop, petrol stations are disappearing. Fuel prices are high, so why are so many closing?

The fuel gauge reads empty and the warning light is on. Ahead looms a petrol station sign.

But the forecourt is dark and fenced off, weeds crack the concrete and the pumps are long gone. Perhaps there is a sign announcing that the site will soon be luxury flats.

If the above scenario sounds familiar, it's not surprising. Since 2002, petrol stations have been shutting at an average rate of 600 a year.

The owner of a small forecourt with a 30,000 litre fuel tank needs to front 30,000 to keep it filled
Mark Bradshaw
According to trade body the Petrol Retailers Association, there are now fewer people selling fuel to motorists than at any time since 1912.

But with the cost at the pumps reaching an all-time high, doesn't this mean there's more cash than ever in selling "black gold"?

Not so, says Mark Bradshaw of the Federation of Petroleum Suppliers, a lobby group representing independent petrol retailers.

"Since 2000, we have faced a situation where the independent retailers cannot compete with the sites owned by major oil companies and the supermarkets."

Petrol station prices in November 2007
Prices are going up and up
There are two main issues facing independent retailers, who still make up about two-thirds of the 9,500 plus petrol retailers in the UK.

Firstly, independently-owned stations - many of which are branded with the name of major oil companies - must buy their oil from independent fuel wholesalers, adding another layer of costs.

The second problem, Mr Bradshaw says, is the sheer cost of petrol.

"Taxation accounts for about 75% of the cost of the fuel, and now petrol is costing retailers more than 1 a litre to buy in, this means the owner of a small forecourt with a 30,000 litre fuel tank needs to front 30,000 to keep it filled. That's a lot of money to pay up front. The cash flow implications for smaller operators are horrendous."

With typical profit margins of 2 to 3p a litre, it is the attached shop, rather than the forecourt pumps, that keep most filling stations in business.

A motorist buying 10 worth of fuel by credit card will actually be a net loss to a retailer because of card charges. However, if that motorist buys a chocolate bar when he or she fills up, a small profit will be made.

Tesco petrol station
Supermarkets are expanding into fuel
And the rise of the supermarket filling station - up from 11% of the market in 1992 to 38% in 2006 - hasn't helped. Other operators claim that the big supermarket chains sell fuel below cost price, creating a situation that is untenable for others in the market.

Supermarket bosses argue that they are increasing public choice and giving the motorist value for money.

"We aim to offer customers the best possible prices for petrol, and we regularly check our prices against competitors to make sure we are offering good value," a Sainsbury's spokesman says.

"In addition, to stay competitive within their own local market, individual petrol stations may adjust their fuel prices in response to local competition."

Comfort stops

Inflated property prices have also increased the incentive to forecourt owners - even the biggest operators - to shut down barely profitable stations and sell the land to developers.

Austin Healey being filled up at a petrol station
A long-gone golden age
Ray Holloway, chairman of PRA, says: "Motorists are now noticing gaps in fuel availability and if it gets worse, as expected, they will certainly be inconvenienced when searching for a forecourt in some areas."

The situation is particularly acute in Scotland, Wales, the West Country and rural areas of East Anglia, he says, but station closures are hitting cities, towns and the countryside elsewhere.

Mr Bradshaw, himself a former filling station owner, says that when forecourts close they leave more than just an ugly empty space. Many acted as the hub of the community, with the forecourt shop often being the village shop.

"Let's not under-estimate how useful it was to have filling stations everywhere providing a national network of toilet stops for long-distance travellers. Now most of them have closed, this represents a real issue for a number of travellers, particularly the elderly.

"And the environmental effect of having to travel extra miles just to fill your car is also considerable."

With electricity and other overheads rising at above inflationary levels, petrol sellers are lobbying the government for help.

They would like to see fuel duty reduced and the extension of a scheme, introduced by the Scottish Executive, where petrol stations can apply for grants to update their capital equipment.

They would also like to buy their oil before tax is added onto the price. Mr Bradshaw points out that each time a car drives off from a forecourt without paying, the filling station operator may have to pay more than 40 in duty on the tank of gas they received no money for.

Whatever drives independent petrol station owners out of the business, even non-motorists miss them when they're gone.


Below is a selection of your comments.

Maybe the independent petrol retailers should start thinking outside the box. How about selling their fuel at cost (get people interested) and then have a service charge of 2 for which your oil, water, brake fluid, and tyre pressures were checked. Sure the idea wouldn't appeal to everyone but it would to a large number, including many elderly motorists and those who haven't a clue what's under the bonnet. In short, offer a service.
AG Swain, Poole, Dorset

Most of the petrol stations within the North Wales coast's holiday area (between Prestatyn and Conwy) have disappeared in recent years. Many are now selling caravans or planning permission applied for housing. Holiday makers who are returning a year later are at a loss as to where the nearest petrol station is. When all of the independent filling stations (with their staff full of local knowledge, personality and skills) have gone, then the supermarkets can (and will) stop subsidising the fuel and charge what they like. Just remember this next time you drive past the local independent petrol station to save 1p/litre at the supermarket.
John, Colwyn Bay, North Wales

Boy, where have I heard this story before? In northern Ontario, Canada - local gas stations are a rare thing indeed. We are currently experiencing highway "expansion" that will create a distance of about 130km between gas stations and fill-ups. Forget about a garage and a mechanic. Lost those years ago. Sorry folks, it's called progress.
Astrid Taim, Burk's Falls, Ontario, Canada

I owned two fuel station businesses with 23 staff and 9m turnover. The government took about 85% of this in duty, tax, vat, NI etc. Staff wages accounted for the bulk of the rest and I earned less than an average wage for five years of 24/7 heartache. Anything left was stolen by motorists driving off or staff helping themselves. I eventually snapped, closed the business down and made the staff redundant. It cost me everything I had financially, but I retained my dignity, my self-respect, my marriage and my sanity. Others have not been so lucky.
John Clark, Laurencekirk, Scotland

My home town of Bewdley, Worcs, has seen two of its three filling stations close in the past 5 years. There is one remaining, and the locals had to fight to keep it. This kind of closure can really hit more rural communities harder - in terms of time spent driving around trying to find somewhere to fill up, loss of jobs and the increasing price of the fuel in the one remaining place where you can fill up.
Amanda Furlong, Loughborough, Leics

In our town the smaller garages have been driven out by a combination of supermarkets and BP franchises. There's nothing else unless you want to drive for nearly 10 miles round trip, which defeats the purpose. I'd really like a car that I can fuel at home. Long queues at smaller garages for petrol are a real turn-off, especially at the prices we pay now. A re-chargeable hybrid would be a nice car to have.
John, Livingston, UK

I just hope the supermarkets are not stopped from selling fuel - I cannot think of anything much greener for locating petrol stations than filling up at the supermarket you have already driven to.
Malcolm, Cambridge

Malcolm, even greener is not to drive to the supermarket. Shop locally and support all small businesses like post offices, petrol stations etc. If people had done this in the first place, we would not be facing the problems we have now and sense would have prevailed.
Michael Bowles, East Grinstead UK

Even in the city I live in, with a population of about 250,000, MOST petrol stations are closing or have closed. In fact Plymouth was the site of the very first self-service petrol station ever (Charles Cross). And what is there now to commemorate that fact? Nothing. Am office supplies store was built there instead. Hmm, that's handy... not.
G Bell, Plymouth, Devon

I have been in the business for 40 years and have watched this situation unfold over the past 20 years. The public don't look any further than the price on the pole sign. The supermarkets have been selling fuel below cost for years with the blessing of successive governments, which, has been the main reason for the closure of so many sites. Other factors are cost of labour, employment protection laws, health and safety, and environmental protection legislation. The public never seem to take their time into consideration or the motoring cost of the return journey to and from the supermarkets. When this is considered the so-called "value for money" at the supermarkets is not so attractive.
James Lawlor, Harlow, Essex

It's been known, for a long time, that petrol stations make little or no money; the owners have always been at the end of a long chain where they see little of the vast profits made. So, where is all the profit? If you ignore the Government's cut, and the profit gets extracted further up the chain, in processing and shipping; this way the companies can claim that they never make much "on the forecourt" while the profits climb.
Urd, UK

The nearest petrol station to me (which was small and not of the supermarket variety) closed when the building next door to it (a former car dealership) shut and attempted to sell off it's street corner real estate to be developed into flats. I'm guessing the petrol shop joined suit (or was bought out by the car dealership) in order to make the chunk of real estate larger and more appealing to sell to a property developer. Obviously this wouldn't be the case in every instance of a shop shutting. In my case, perhaps the local petrol shop owners were more profit-driven by the state of current property prices rather than difficulties in the petrol market. Once the tanks are removed from underground, most anything can be built on the site.
Dale Loyd, Cambridge

Whatever the reason for the closure town councils or the owners should be forced to make the site clean, safe and less of a eyesore to the community before walking away.
John Martin, Skipton

Ironically for the green lobby, if I need to fill the car up prior to a long journey, instead of the 3 minute drive to a petrol station (or even knowing I can fill up en route) I have to allow 30-40 minutes the day prior to that long journey to try one of the 3 "local" petrol stations in the hope that one won't be closed for refilling (normally the first one is). Am I out in the sticks? No, I live in South London.
Steve C, London

I'm surprised you are lamenting the passing of these eyesores. Whilst I fee sorry for individual retailers who can no longer stay in business (and yet again there are question marks over supermarket business practices) the huge number of petrol stations was a blight on our landscape. Abbeydale Rd in Sheffield, for example, looks far better now that several of the stations have been replaced with flats and shops. One of the few sites that hasn't been built on now has a car hand-wash - far more useful than the petrol station it replaced.
Neil, Sheffield

I just read this, then sat and worked out that four of these type of garages have shut in and around Addlestone over the last few years. The main culprit? that's easy, the big Tesco superstore and garage that dominates the town - nothing can compete with them.
Gareth Jenkins, Addlestone, Surrey

Clearly were are seeing the end off petrol as we know it! slowly but surely we will see the petrol station being replaced with gas/electric/hydro stations which is a great thing in the long run. The government is pushing very hard for car manufacturers to scrap petrol motors, think about it!!
J, Tadley

J from Tadley, do you really think it's in the governments interest to scrap petrol motors? At a 75% tax rate, I think the last thing the Chancellor needs is to see sales fall. This has nothing to do with the government (other than massive over taxing) and everything to do with the rising cost of energy and the recession we're not all facing.
Jason Brown, Denver, US

Instead of driving 30-40 minutes for the sole purpose of filling up, you have two options:
1. Fill up along the way.
2. Take the bus or train instead.
David Bleicher, London

I have a LPG car and whenever I go to visit friends and relatives it's a real nightmare, particularly on the west coast. Yet, with no convenient public transport (and sometimes no public transport), a car is an essential.
Jade, Scotland



RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific