The world runs on petroleum, and the range of products produced from oil is almost endless. Motor fuels and heating fuels account for more than two-thirds of the product yield from a barrel of oil, and America's independent petroleum marketers play an important role in the distribution of those products. They are a vital link in the nation's petroleum marketing chain. Collectively, America's more than 10,000 independent petroleum marketers sell approximately 50 percent of the gasoline, 60 percent of the diesel fuel and 75 percent of the home heating oil in this country each year.
An independent petroleum marketer is someone who purchases refined petroleum products from a supplier, usually a major oil company or an independent refiner or storage terminal operator, and then resells the products at the wholesale or retail level. Independent marketers are also referred to as distributors.
The range of products sold by independent marketers includes just about everything that comes out of the barrel of crude oil - gasoline, heating oil, diesel fuel, lubricants, aviation fuel, kerosene and a variety of other refined petroleum products.
Distributors are also involved in a diverse range of petroleum industry-related activities, including convenience stores, truck stops and restaurants, car washes, fast lube centers, auto parts sales and home energy centers. They have proven themselves to be the most innovative and efficient link in the petroleum marketing chain. The independent marketer, as a small business person, is close to his or her community and can respond quickly to market changes and consumer preferences.
Independent petroleum marketers are not "Big Oil." While they may sell their product under the brand name of a major oil company, they are generally not involved in petroleum production or refining.
After crude oil has been refined, it enters the distribution system. It is generally transported from the refinery by pipeline, truck, barge, or in some cases by railroad tank car, to a storage terminal, also called a tank farm.
From there, the supplier has several choices on how to distribute the product and many suppliers, particularly large integrated oil companies, utilize a combination of distribution methods. In the case of gasoline and diesel fuel, for instance, suppliers may sell their product through company-owned and operated stations, or through stations leased to or owned by individual dealers. In those situations, the supplier generally delivers the product directly to the station from the terminal, or they may hire an outside trucking company, sometimes called a "common carrier," to deliver the product.
Suppliers may also choose to distribute their product through sales to independent marketers, who then resell it as "branded," or "non-branded" product. Branded product is sold under the name of the supplier, oftentimes a major oil company. Non-branded or "private brand" product is generally sold under the independent marketer's own company name. Independent petroleum marketers who own ten or more stations are often referred to as "chain retailers."
Some independent marketers perform only the distributor function, whereby they purchase product from a supplier and then sell it on a wholesale basis to service stations, agricultural accounts, truck stops, government municipalities, commercial fleet accounts, car rental agencies, and a wide range of other wholesale customers. The typical independent marketer, however, is involved in a combination of wholesaling and retailing activities. Independent marketers generally distribute their product through their own company trucks, although they may also use common carriers.
Fuel oil is a crucial component of America's energy mix, and fuel oil marketers provide safe, clean, dependable heat and power to millions of American homes and businesses. The two principal forms of fuel oil are distillate, which is a lighter, more highly refined oil, used primarily for residential heating purposes, and residual, which is a heavier oil, most often used for power generation and for commercial and industrial purposes.
The fuel oil business is highly competitive and there are generally several fuel oil companies operating in any area where fuel oil is marketed. That is a distinct advantage for consumers because it offers them freedom of choice to shop for the best price and service. Fuel oil marketers pride themselves on the fact that they offer "I'll be right over" service to their customers.
Today's modern fuel oil marketers offer consumers a diverse range of services, including heating equipment sales and maintenance, home energy audits and numerous other services designed to help consumers get the most for their energy dollars. Click here to learn about Oilheat Services.
Propane provides space heating, water heating and cooking to more than nine million U.S. households and one million commercial businesses. Propane is used on more than 500,000 farms and is the primary fuel in the internal combustion forklift market. Propane is also the most widely available alternative fuel for use by school buses and other on-road vehicles, as well as for commercial mowers, portable power generators, irrigation engines, and a wide variety of other applications. Propane is also used as a feedstock by the petrochemical industry.
The independent petroleum marketing industry is a strong family-oriented industry. Many of the independent marketer companies operating today are second, third and even fourth generation companies, and some of those companies can trace their beginnings to the turn of the century and earlier, when the company founders sold wood, ice, coal and whale oil off the backs of horse-drawn wagons.
The petroleum marketing industry in America is the most competitive in the world, both in terms of price and selection, and this country's independent petroleum marketers are largely responsible for that.
Independent marketers are efficient and innovative business people, and they are fiercely competitive by nature. Those characteristics, combined with a strong emphasis on customer satisfaction and good old-fashioned service, have earned them the title of "The consumer's best friend in the petroleum marketing chain."
The Petroleum Marketers Associations of America (PMAA) is the national trade association representing America's independent petroleum marketers. PMAA is a federation of 45 state and regional associations representing over 9,000 independent petroleum marketers nationwide. Collectively, those marketers sell approximately 50 percent of the gasoline and 75 percent of the heating oil sold in this country annually. Visit their website at www.pmaa.org.