NEWARK, Calif. — Almost two decades ago, Sanjiv Patel opted to downscale his career in the volatile technology sector for the relative stability of convenience-store and petroleum operation.
These days, Patel is having a deja-vu moment, witnessing a brand of upheaval that’s on another level from when he signed on in 2004. That’s the year when the founder and CEO of National Petroleum, Newark, Calif., pivoted to food staples and fuel after years as an architect of tech startups, and more.
Operating in California adds another element of uncertainty to the c-store/petroleum equation, as retailers are regularly being battered with state rules and regs, all promulgated in a reform-intensive state.
A proposed statewide ban on the selling of flavored tobacco products is hovering about, as is another to ban permits for new fueling stations. It’s motivated by cities looking to reduce dependency on fossil fuel and a push to electrification.
Several cities in the state have already passed moratoriums on future fuel outlets while others are developing policies to that end. In Los Angeles, for instance, a city council proposal would no longer issue permits for new stations or allow existing sites to add fuel pumps. California has also announced plans to end the sale of new gas-powered cars by 2035.
“In the Bay Area, I think we’re ground zero for EVs [vehicle testing and expansion]. If we’re ever looking to expand our retail, we might need to look to regions like central California,” said Patel, a graduate of the University of Southern California with a background in computer engineering.
Focusing primarily on sale and supply of gasoline products to independent service stations in the Bay Area as well as management of several franchised and non-franchised gas stations and convenience stores, National Petroleum operates within the tagline of “We Fuel California.”
Read ahead for a conversation with Sanjiv Patel about his business fortunes for 2022 and beyond, plus his role with two state associations: vice chairman of the American Petroleum and Convenience Store Association (APCA) and board member with California Fuels & Convenience Alliance (CFCA), representing independent wholesale and retail marketers.
Q: Seeing that you have a background in computer engineering, talk about your journey to enter the convenience retailing and wholesale petroleum business?
A: I was in the technology sector for 17 years, and joke that it took me 17 years to learn that I wasn’t a good engineer. I launched a startup, ahead of its time, that offered user-generated, social-media content similar to Facebook. This industry became more and more vulnerable over time. We started in 2004 with our first station, in Berkeley, where my business partner ran the store while I continued with my tech career until 2006.
Q: Can you describe what it was like to assume control of that first station?
A: It was formerly a small kiosk with 76-branded fuel. We wanted to expand the store significantly because business was proving to be terrific, and expansion would enable us to achieve more. We naïvely thought the city of Berkeley would throw out the red carpet for us when we petitioned to expand. But from the time we submitted our expansion proposal to the time that plan was approved by the city—it took nine years. We faced all kinds of challenges—some design-related—plus more pushback. Believe it or not, the upgraded store debuted in 2020.
Q: Was it worth the trouble?
A: Yes. Since re-opening, the Berkeley store came out beautifully. A new modern forecourt with Valero-branded fuel, Circle K-branded store mark with a Burger King franchise and gourmet coffee program.
Q: Talk about your remodeled Newark store, which re-opened in July after more than a year of being shuttered during renovations?
A: We installed new USTs and remodeled inside. This location offers biodiesel and E-85, and we pump 150,000 gallons a month—and hope to expand that to 250,000 and eventually 300,000 by mid-2023.The big focus was asking, ‘how do we maximize fuel throughput?’ We opted to reduce fueling positions from six to four, which created [fewer vehicle bottlenecks on a smaller footprint]. We were not able to expand the lot, per the city of Newark ordinances.
The city also announced that Costco will open across the street, with 32 pumps. We feel that with our own proprietary National fuel brand, we can remain competitive.
Q: You’ve faced club store fuel competition before—can you elaborate?
A: Our store in San Ramon, Calif., faced increased competition when a Costco opened there. Because that store is Exxon-branded we had less flexibility to match price—and in turn lost 30% on sales. We’re seeking to leverage our ‘convenience’ advantage and get people who might fill up at Costco to come to our San Ramon station.
Q: As vice chairman of APCA, what are the front-burner initiatives on the agenda in 2022 and beyond?
A: Front and center are two issues. We’re losing the battle to prevent the ban on flavored tobacco. It’s been a city-by-city decision, with Berkeley approving it, then Oakland and now San Jose. [The ban was promulgated to protect the health of children and applies to any tobacco products with an artificial flavor, natural flavor, aroma, herb or spice. At least 15 flavors are on the ban list. California cities proceeded with local bans after a state Senate bill to ban sale of flavored tobacco statewide in 2020 was placed on hold for a voter referendum this November.]
The second issue is the proposed moratorium on [any license or petition] to open new c-store/petroleum units. We remain hopeful about this one.
Q: What’s your management team’s approach for finding and retaining solid workers?
A: We have 65 employees. And, we’ve been very fortunate, for the most part, to find employees and keep them. We provide a competitive salary at $18 to $19 per hour, company-matched 401K plan and much more. Approximately 30% of our staff has been with us for five years or longer, and truly represent the backbone of National Petroleum.
National Petroleum at a Glance:
Most retail assets offer National-branded gasoline, with others are branded Valero, Exxon and Chevron. National Petroleum has supply arrangements on the wholesale-distributor side with Chevron, Shell, 76, Arco, Valero and Tesoro. The company operates 14 stores, with 98% of company revenues flowing from wholesale-distributor partnerships with California retailers.
American Petroleum and Convenience Store Association (APCA) at a Glance:
The non-profit operates with a mission to assist c-store retailer increase their business by:
- Providing platform and resources for education, training and an exchange of ideas.
- Encouraging governmental actions beneficial to the industry.
- Providing cost-effective products and services to members.
- Advising and educating members to run their businesses effectively.
- Inspiring members to adapt to high level of business ethics that reflect a positive image for the industry.
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