This is how gas stations survive the oil crisis: "There are no certainties"

BarcelonaThe oil sector has lost the hope that the war in Iran will be shortThe fuel sector is, it must be said, a sector with many intricacies. "Every gas station is a world unto itself," observes Ramon Fitó, owner of the Fitó service station in Badalona, the oldest in Catalonia. The experience, therefore, is not the same for an operator with commercial and storage capacity as it is for a small local chain. Even so, everyone who does not have their own refineries has seen their margins tighten. "We pass on the prices day by day. And, evidently, we have been forced to buy a more expensive product," observes Payá.has left Brent around $110 this weekAnomalous competition

"We are tied to daily prices, and we can store for two or three days. When there were daily increases of 6, 7, 10 cents, the environment became very complicated," explains to the newspaper ARA Ramon Puigfel, general director of Puigfel Carburants and president of the Provincial Association of Service Stations of Barcelona (APESBcn). In the case of his company, they ensure supply with an exclusivity contract with Repsol, but even so, the daily business has been marked by "certain public statements" by Donald Trump or the Iranian government. "If a sharp price drop caught you with full tanks, you had drunk oil," he recalls.

Gas stations, both those operated by companies with more capacity and small service stations, have seen that the competitive environment has sought a thousand ways to guarantee their business. It should be remembered that companies without refining capacity have a limitation: they sell at almost fixed margins, between the sword of market prices and the wall of competitor prices. And, at times, Payá assures, stations "have not passed on all the increases to prices". "In the worst moments, gasoline should have been well above two euros, and it didn't reach that" in a generalized way, the businessman maintains.

This has caused, in Puigfel's experience, that on many occasions gas stations have been forced to sell "with much lower margins than they would like" to maintain sales volume. To the point, especially for smaller players, that "there have been times when we have lost money –declares Fitó–. If you adapt to wholesale prices by raising gasoline two cents more than the one next door, people leave. You can't leave the market".

Changes in consumption

For independent operators, the price increase has severely limited business. With costs fixed by the daily crude oil reference, the actors consulted have detected both sharp drops in purchases and new refueling patterns. Nieves considers, in this regard, that "the consumer has become much more scrupulous when deciding how much they will pay and at which station they decide to refuel." A similar trend has been observed by EsclatOil, the fuel segment of the Bon Preu group. In statements to the newspaper ARA, the company's Head of Sustainability and Energy, Josep Castany, assures that, as a result of the crisis, "consumer sensitivity to price has become very high." "The customer has assumed that news prolonging the conflict implies higher prices," opines the executive.

From Meroil, they identify that most end-users have opted to "put less gasoline, but go to the service station more often"; to make it easier to avoid days with the most extreme prices. Fitó has lamented "drops in income" in favor of lower-cost alternatives: "In oil crises, people put less gasoline, save on outings, or opt for low-cost products," he comments.

The situation for buyers, however, has stabilized following the VAT reduction on fuels from 21% to 10%, as well as the cut to the minimum allowed by Europe on hydrocarbon taxes. "This has helped to contain the final price," celebrates Puigfel, and has revived consumption. Furthermore, the sources consulted celebrate that the reduction has been applied directly to the taxes settled by the stations, and not in the form of a price subsidy, as was done during the war in Ukraine. Then, with a flat cut in the final price Then, with a flat cut in the final price, "the systems were not prepared to adapt," and it was difficult to take advantage of it.

Even so, they do not yet have a plan for the situation the market will be in after June 30, when, presumably, sales will fall. Unlike in 2022, when the market quickly "discounted" the effects of the Russian oil blockade on the final product, Payá warns that "high prices will continue." "Ormuz remains closed, and many refineries and oil assets have stopped. And the region's oil has no alternatives: the product that doesn't leave through there, doesn't leave anywhere," he concludes. Castany predicts that "the market will continue to show volatility" in the short and medium term.

A "conservative" supply"

Despite alerts from the International Energy Agency, which even used the strategic reserves of member countries, oil companies have not noticed any supply risk in recent weeks. The Strait of Hormuz accounts for 20% of global oil transit, but the crude oil navigating the region ends up in China, South Korea, and other Asian powers. "It has affected us little in this regard. The price tension has come about because more countries have been competing for less oil supply," reasons Puigfel.

Even so, final sellers have detected more "conservative" periods from their suppliers, especially during the roughest moments of the war. According to the president of APESBcn, however, this cooling has responded more to "forecasts of logistical problems" than to a shortage in gasoline tanks. "At first, everyone wanted to fill their tanks, and there was a time when there was no transport for all the product being requested," he recalls. The president of Nieves Energía, for his part, minimizes the macro effects in the Spanish context, as independent players "have had to turn to national refining, which does exist." Outside the State, "the situation is much more complicated," and the search for alternative suppliers has caused "even more tension in the market."