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Gaurav Agnihotri

Gaurav Agnihotri

Gaurav Agnihotri, a Mechanical engineer and an MBA -Marketing from ICFAI (Institute of Chartered Financial Accountants), Mumbai, is a result oriented and a business focused…

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Portable Gas Stations Could Offer Cost Benefits

Portable Gas Stations Could Offer Cost Benefits

There is a trend that is emerging in the energy sector that has the potential to change the way consumers purchase their fuel in coming years. ‘Portable Fuel Stations’ or ‘Mobile Fuel Stations’ are a promising alternative to the conventional fuel stations that are not only more expensive but also take more time and space to construct. Space is not a constraint for a ‘mobile fuel station’ as it can be moved either in a trailer or shipped to any desired location, in addition to easy installation.

Normally, a mobile fuel station would be able to store around 4,000 to 10,000 gallons of fuel. A typical unit would consist of a double walled gas tank along with two to three fuel dispensers (with a flow rate of 45-120 liters per minute), a generator and other essential components such as lighting system, electronic billing system and a counter, all of which would be housed on a skid that can either be transported on a vehicle or placed on a ground.

A Portable Fueling Station and Tank 

Image Source: SpecialtyFuelServices

Is anyone using these? Related: Is The U.S. About To Break One Of Its Own Nuclear Treaties?

Image Source: Kramptiz

 

Qatar is one of the few nations that have identified the potential of portable fuel stations. Woqod (Qatar Fuel) - an oil storage, distribution and marketing company based in Qatar, is set to launch around 15 portable fuel stations in and around the city of Doha. The plan is to install these portable fuel stations at crowded places where the demand for gasoline is very high; Woqod would be using these as a ‘temporary alternative’ to the conventional fuel stations that have been dismantled and shut for expansion and further renovation. However, the question here is: can these portable fuel stations be used as a permanent alternative to the conventional fuel stations?

There are companies like Specialty Fuel Services that are offering portable fueling stations and tanks to individual users and small scale businesses. The Mississippi-based company is offering to work with clients to develop and design a mobile fuel station based on their specific needs and requirements. It also offers a ‘deployment plan’ to its customers in case of emergencies. Mobile Fuel Station is another mobile fuel distribution system that has been developed by CRM Trucks and Trailers and manufactured in Holland. Related: Fund Managers Have Their Own ‘Black Monday’ Thanks To The Saudis

This system can be completely customized and used to supply diesel, gasoline, LPG, biodiesel, kerosene, ethanol, vegetable oils and bio ethanol for cars, trucks, heavy diesel locomotives, the mining industry, the construction industry, machinery, boats and airplanes.

LPG- Mobile fuel Station 

Image Source: MobileFuelStation

How are portable fuel stations any better than the conventional ones?

Although portable fuel stations are currently regarded as a ‘temporary alternative’ to conventional fuel stations, the idea of using them as a permanent alternative is indeed promising, due to the attractive cost-benefit ratio when compared with conventional fuel station.

With low maintenance costs, wide industry applications, high flexibility and prices starting from $10,000, portable fuel stations could find many takers in the coming time, especially seeing as these stations can also be expanded, based on the rising fuel demand and ground conditions (at minimal costs).

On the other hand, setting up a conventional fuel station requires almost ten times the investment of a portable fuel station (acquisition of land, insurance, state permit, fuel station set up and other equipment related costs). In the U.S., gas station owners make very little profit margins from their sales. In the below figure, crude oil accounts for around 40 percent of the cost, taxes account for around 17 percent of the average retail price of a gallon of gasoline and refining contributes close to 25 percent. The distribution and marketing cost accounts for only 19 percent which also includes the profit earned by a gas station along with advertising costs, “swipe fees” related to payment cards and the transportation costs of fuel to the gas station.  Related: Trouble Ahead For The World’s Next Shale Boom?

Image Source: EIA

 

What we pay for a gallon of Gasoline and Diesel?

With low set up costs and high flexibility, the portable fuel stations could actually be a perfect opportunity for conventional private gas station owners who already have very low net profit margins when compared to other retailers.

By Gaurav Agnihotri for Oilprice.com

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