The BCG report, A new era for fuel retailers, attributes this evolution to the disruptive fuel environment as EVs and alternative fuels have grown in popularity, mobility usage and attitudes have altered, and consumer behaviour has changed dramatically, particularly during and following the COVID-19 pandemic.

More recently, geopolitical uncertainty and volatility have spiralled oil prices, leading to an ever-greater awareness that retail is a crucial consideration for business resilience.

BCG sees a growing demand for alternative fuels helping to shape fuel retailer behaviour. The consulting firm anticipates that by 2030, over half of all new light-duty vehicle sales in the US will be EVs and fuel retailers must adapt to stay ahead of this trend.

Likewise, demand for biofuels is rising. Regional partnerships in Europe, China and the US are being forged to facilitate the large-scale rollout of hydrogen-fuelled heavy-duty transportation. Fuel retailers need to reorient themselves away from the narrow path of fossil fuels, both to reduce the volatility of their overall portfolio and also to meet sustainability objectives, says BCG.

The findings are based on a survey of 33 executives from 20 leading global retailers. The report concludes that no single stratagem will successfully overcome the current and forecast waves of disruption. Instead, fuel retailers must adopt a customer-centric model to adapt to changing trends and drive growth.

‘Beyond extracting the most value from their traditional core business, fuel retailers’ survival depends on investing beyond the pump. They need to make ambitious moves into new digital businesses while also adapting the service station to support EV and other alternatives fuels, capitalise on their existing real estate, and zero in on sustainable mobility,’ comments Mirko Rubeis, a Managing Director and Senior Partner at BCG and a co-author of the report.

Biofuels twice as expensive as petrol and diesel in most cases
Also looking at fuels, a recent study by Transport & Environment (T&E) has found that biofuels are currently 70–130% higher than petrol and diesel on the wholesale market, depending on the crop used, adding €17bn/y to Europe’s fuel bill. T&E has called on the European Union (EU) to forego the mandatory blending of crop biofuel to help alleviate pressure on both food and fuel prices.

Variation in price exists between the different crops used for biofuels. Price hikes in many feedstocks such as vegetable oils, cereals, used cooking oil and animal fats have helped widen this price difference compared to fossil fuels.

Maik Marahrens, Senior Biofuels Campaigner at T&E, says: ‘Biofuels are worse for the climate, worse for biodiversity and contribute to higher food prices. As this analysis of wholesale prices shows, they also put an unnecessary financial burden on already struggling European households. The EU should end mandates for crop biofuels and commit to truly sustainable technologies instead.’