The Future of Fuels 2024

While many convenience-store operators have lessened their reliance on gasoline and diesel sales by offering robust food and beverage options, the importance of “guessing right” on the future of fuel is still top of mind.

Retailers are challenged to explore all alternative fuel options, said Scott Negley, senior director of product management at Dover Fueling Services, Austin, Texas.

“I believe every fuel will have a seat at the table,” Negley said.

The only question, he said, is how big the slice of the pie will be for each of them.

From the early days of ethanol blends in gasoline to biofuels and electric vehicles (EVs), c-stores have pondered how and when to make changes in the forecourt. The debate has become more urgent as retailers juggle the shifting needs of customers plus the cost and benefit of adding equipment to deliver different fuels. Whether a chain has five stores or 5,000, angst about the future of fuels grows when variables such as geography, federal and state incentives and politics are added to the scenario.

Of the 152,396 convenience stores operating in the United States, 120,061 sell fuel, according to NACS. An estimated 80% of the gasoline purchased in the U.S. occurs at a convenience store, but retailers generate the bulk of their profits from sales inside the store. Fifty-nine percent of drivers filling up at the pump go inside the store and buy an item, according to Jeff Lenard, vice president of strategic industry initiatives at NACS. When gas prices are high, consumers are less likely to go inside the store, and that hurts profits, he said.

Fuel prices have gone down, but many markets haven’t returned to where they were pre-COVID, said Brian Renaud, director of retail fuel pricing and analytics at Sheetz, a 670-store chain based in Altoona, Pennsylvania. When you tie in lower demand, he said, that’s not a great place to be when it comes to making that margin equation work for the stores.

“There’s a lot of push and pull going on,” he said.

What help can alternative fuels offer?