Revenue will rise as industrial petroleum consumption rises with stronger export demand.
New York, NY (PRWEB) June 13, 2014
Operators in the Gasoline and Petroleum Wholesaling industry experienced volatile conditions over the past five years. While consumption remained relatively stable, product prices fluctuated due to the global economic downturn and domestic infrastructure shortages. Industrial petroleum consumption was particularly volatile because domestic manufacturers are dependent on exports to the United States and global markets. The 2009 recession sharply lowered demand for Canadian exports, causing downstream companies to cut back on petroleum purchases. As a result, industry revenue fell 17.1% over the year. Since then, growing industrial output has buoyed petroleum consumption. Prices also recovered as global demand normalized. As a result, IBISWorld expects Gasoline and Petroleum Wholesaling industry revenue to increase at an average annual rate of 9.3% to $84.0 billion in the five years to 2014.
According to IBISWorld Industry Analyst David Yang, “Industry revenue recovered strongly from the recession as the price of oil picked up.” However, since 2011, pipeline infrastructure shortages constrained North American petroleum exports, lowering domestic crude oil and prices. Over the past two years, domestic petroleum prices were considerably lower than international petroleum prices. As a result, wholesalers experienced minimal revenue growth. In 2014, petroleum product prices are estimated to fall, causing revenue to contract 0.8% over the year.
“Profitability has marginally increased over the past five years, mostly due to the recovery from the recession,” says Yang. Strong internal competition and stagnant demand quickly pushed down prices and profitability during the recession. Since 2011, low domestic crude oil and petroleum product prices also cut into profitability. Profit is anticipated to recover to 1.4% of revenue in 2014, though it remains below prerecession levels.
Over the next five years, this industry is projected to experience stable revenue growth due to strengthening demand for petroleum products. In particular, industrial petroleum consumption will grow as global demand for Canadian exports accelerates. The scheduled expansion of pipeline infrastructure will also bolster petroleum exports, thereby raising petroleum prices.
For more information, visit IBISWorld’s Gasoline and Petroleum Wholesaling in Canada industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.
IBISWorld industry Report Key Topics
The Gasoline and Petroleum Wholesaling industry purchases petroleum products from petroleum bulk stations and sells these products to retailers, including gas stations, car parts retailers, warehouses, superstores and supermarkets, manufacturers and natural-gas retail distributors.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.