The number of gas stations in Canada has dropped to under 14,000 today from 20,000 in 1989, according to a recent MJ Ervin & Associates Inc. study.
The report found that station numbers have fallen roughly 2% per year, despite growth in the number of vehicles sold and on the road in Canada. Declining profitability of gasoline retailers was cited as a prime reason for the drop. The erosion in retailers' bottom lines comes despite booming profits of oil companies worldwide.
According to MJ Ervin, the mark-up on gasoline is roughly $0.05 per litre at a typical urban gas station. Many outlets must therefore sell high volumes of gasoline to compensate for relatively low margins.
The survey found that the number of retail outlets affiliated with oil and gas refineries has declined 3.3% to 46.2% in 2006 compared with just under 50% in 2005. Over the same period, the market for independent non-refinery retailers like Wal-Mart and Superstore grew to 53.8% from just over 50%.
According to MJ Ervin, while there are almost 100 different gasoline retail brands in Canada, most of the country's gasoline comes from 16 refineries.