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Mary Fields fills her Land Rover with premium gasoline at a Petro station. "I saw the price and needed gas," Fields says. "When you're dealing with premium gas, you do pay attention." (Sun photo by Barbara Haddock Taylor / June 11, 2004) |
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Mark Krug leases his Rosedale service station from Exxon, buys his gasoline from Exxon and pays the oil giant to use its gold-plated brand name.
At his Petro stations in Timonium and Ellicott City, Krug owns the property, buys generic gasoline from whoever gives him the lowest price and hopes consumers don't much care about a tiger in their tank as much as they do about shaving the price of a fill-up.
Stations such as Petro may lack the market power of a well-known - and highly marketed - brand, but they can usually beat the prices of stations that carry logos like Exxon, Shell and BP Amoco, and make more money doing it. And at a time when pump prices have risen sharply, that has meant a boost in business for unbranded dealers.
"People's perceptions about gas are changing," said Paul Fiore, executive vice president of the Service Station Dealers of America and Allied Trades. "They're not as concerned with brand names anymore."
As a gasoline dealer, Krug knows equally well the worlds of branded and unbranded gas. "I've got one foot on the pier and one on the boat," he said.
With Exxon, Krug said, "You're playing on their football field with their referee using their football."
But at his unbranded Petro stations, "We own the ground. We own everything. We're like a really, really teeny oil company. We can sell any product we want."
As a result, when most area stations were selling regular grade gasoline for between $2.03 per gallon and $2.09 a gallon, Petro sold regular for $1.99. And the business rolled in.
When she pulled in to Petro on a recent morning, Mary Fields was looking only at the price on the board, not the name on the sign.
"I saw the price and needed gas," said Fields, who handles marketing for her family's Ellicott City restaurant and fills her Land Rover with premium. "I pulled in because I saw the price. ... When you're dealing with premium gas, you do pay attention."
Did it matter that the name Petro was unfamiliar to her?
"Heck no," she said, glancing at the sign for the first time.
John King, who is retired and lives in Timonium, usually fills up at the same Petro, and sees no reason to choose a branded station over an unbranded one if the gasoline costs less.
"It's the same stuff. All gas is the same," King said, while filling the tank of his Lincoln.
He's mostly right.
Unbranded dealers often buy "surplus" gasoline from jobbers, or middlemen, licensed by the major oil companies to sell their products. So an unbranded dealer could be selling the same gas sold by the major brands, that is, gasoline with the additives put in by the major oil companies to identify it as their brand.
Or a dealer can buy unbranded gasoline without the additives directly from refiners of companies such as St. Louis-based Apex Oil, which buys and re-sells gas.
Major oil companies argue that their proprietary additives make for better quality gasoline, but the unbranded dealers disagree. Unbranded dealers now represent just a tiny fraction of overall dealers, especially in urban and suburban areas. Of the Maryland trade association's 1,000 members, only about 20 to 30 are unbranded.
Fiore says branded dealers typically don't have an opportunity to switch to selling unbranded gasoline unless the jobber or oil company they're under contract to decides it no longer wants the location. The reasons for bailing out could vary, involving profitability, volume or the lease or sometimes an oil company's decision to pull out of a market.
But he expects more dealers to opt for the unbranded route, given the chance.
At his Petro stations in Timonium and Ellicott City, Krug owns the property, buys generic gasoline from whoever gives him the lowest price and hopes consumers don't much care about a tiger in their tank as much as they do about shaving the price of a fill-up.
Stations such as Petro may lack the market power of a well-known - and highly marketed - brand, but they can usually beat the prices of stations that carry logos like Exxon, Shell and BP Amoco, and make more money doing it. And at a time when pump prices have risen sharply, that has meant a boost in business for unbranded dealers.
"People's perceptions about gas are changing," said Paul Fiore, executive vice president of the Service Station Dealers of America and Allied Trades. "They're not as concerned with brand names anymore."
As a gasoline dealer, Krug knows equally well the worlds of branded and unbranded gas. "I've got one foot on the pier and one on the boat," he said.
With Exxon, Krug said, "You're playing on their football field with their referee using their football."
But at his unbranded Petro stations, "We own the ground. We own everything. We're like a really, really teeny oil company. We can sell any product we want."
As a result, when most area stations were selling regular grade gasoline for between $2.03 per gallon and $2.09 a gallon, Petro sold regular for $1.99. And the business rolled in.
When she pulled in to Petro on a recent morning, Mary Fields was looking only at the price on the board, not the name on the sign.
"I saw the price and needed gas," said Fields, who handles marketing for her family's Ellicott City restaurant and fills her Land Rover with premium. "I pulled in because I saw the price. ... When you're dealing with premium gas, you do pay attention."
Did it matter that the name Petro was unfamiliar to her?
"Heck no," she said, glancing at the sign for the first time.
John King, who is retired and lives in Timonium, usually fills up at the same Petro, and sees no reason to choose a branded station over an unbranded one if the gasoline costs less.
"It's the same stuff. All gas is the same," King said, while filling the tank of his Lincoln.
He's mostly right.
Unbranded dealers often buy "surplus" gasoline from jobbers, or middlemen, licensed by the major oil companies to sell their products. So an unbranded dealer could be selling the same gas sold by the major brands, that is, gasoline with the additives put in by the major oil companies to identify it as their brand.
Or a dealer can buy unbranded gasoline without the additives directly from refiners of companies such as St. Louis-based Apex Oil, which buys and re-sells gas.
Major oil companies argue that their proprietary additives make for better quality gasoline, but the unbranded dealers disagree. Unbranded dealers now represent just a tiny fraction of overall dealers, especially in urban and suburban areas. Of the Maryland trade association's 1,000 members, only about 20 to 30 are unbranded.
Fiore says branded dealers typically don't have an opportunity to switch to selling unbranded gasoline unless the jobber or oil company they're under contract to decides it no longer wants the location. The reasons for bailing out could vary, involving profitability, volume or the lease or sometimes an oil company's decision to pull out of a market.
But he expects more dealers to opt for the unbranded route, given the chance.
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