4 Operators Rethinking Their Fuel Strategy

By 
Samantha Oller, Senior Editor/Fuels, CSP

Fuel truck

CHICAGO -- This past January saw a flurry of activity among marketers who were either exiting fuel retail to focus on distribution or selling off parts of their business to focus on growing their convenience-store operations.

Here are four operators who have recently made big, strategic shifts in the retail or wholesale side of their businesses ...

Gordy Fuel

Gordy Fuel

J. William Gordy Fuel Co., a Delmar, Del.-based fuel marketer, sold its four company-operated retail sites to Cato Inc. Gordy Fuel owned most of the stores—high-volume, Exxon-branded sites with beer caves and quick-service restaurants—on a fee-simple basis. They are all located in Maryland.

The company held on to its wholesale distribution business, which supplies Exxon- and Sunoco-branded fuel to dealers in the Washington, D.C., market, and will continue to operate as an independent entity.

Cato Inc., Salisbury, Md., operates 14 Goose Creek stores in Maryland, Delaware and Virginia. Greg Stutzman, vice president of retail for Cato, told CSP Daily News that the four sites are “right in the heart of our trade area.” Like Gordy Fuel, Cato is an ExxonMobil distributor. For now, it plans to continue to operate the new locations under the TigerMart name and sell Exxon-branded fuels.

 

 

Ownbey Enterprises

Chevron gas station

Ownbey Enterprises Inc., a longtime Chevron-branded marketer based in Dalton, Ga., sold its dealer supply business to Premier Petroleum, Duluth, Ga., as part of a “comprehensive business reorientation.” 

The third-generation fuel marketer cited competitive pressures as a key factor.

“The retail supply landscape in our market has become highly complex and competitive, making it extremely difficult for marketers of our size to successfully compete,” said Rodney Ownbey, president of Ownbey Enterprises.

The fuel marketer, which was founded in 1971 and serves northwest Georgia, southeastern Tennessee and northeastern Alabama, will now focus on its “core competencies,” or the commercial fuels and lubricants business. 

Campbell Oil

Gas pumps

Campbell Oil Co., Massillon, Ohio, sold its residential heating-oil and commercial fuels distribution business to Lykins Energy Solutions so that it could focus on growing its retail operations. The company had distributed fuel oil, gasoline and diesel to residential, agricultural, commercial and industrial customers in Ohio. As part of the acquisition, Lykins purchased Campbell Oil’s Massillon, Minerva and Millersburg, Ohio, bulk plants. 

While Campbell Oil was founded as a fuel distributor in 1939, its most recent growth has come through the c-store side of its business, represented by the 50-store BellStores chain in Ohio. The c-stores feature fountain beverages, coffee, snacks and to-go meal options, and most have a Subway, Dairy Queen or Domino’s Pizza restaurant. All of them sell Marathon-branded fuel.

 

Global Partners LP

Global Partners

Global Cos. LLC, a wholly owned subsidiary of Global Partners LP, agreed to sell its natural-gas marketing and electricity brokerage businesses to Sprague Resources LP. Mark Romaine, COO of Global Partners LP, Waltham, Mass., said the sale reflected an ongoing effort “to monetize assets that are not fundamental to our growth strategy.”

Global Partners, a midstream logistics and marketing master limited partnership (MLP), is said to have one of the largest petroleum-product terminal networks in the Northeast. It is also one of the largest distributors of gasoline, distillates, residual oil and renewable fuels in New England and New York.

With the sale of the natural-gas and electricity businesses, Global Partners will continue to focus on expanding its retail and wholesale businesses, which include approximately 1,500 c-stores in the Northeast.