Financial Performance of Gas Stations in Russia

The financial indicators of gas stations in Russia vary significantly depending on their location and business model: revenue can differ by up to 50 times, and profitability can vary by a factor of two. The growth of non-fuel businesses contributes to revenue increases.

The rising fiscal burden on the oil business in Russia, coupled with the government's efforts to limit fuel price increases, has made the profitability of gasoline and diesel retail sales increasingly dependent on the development of additional services by gas station owners, such as selling non-core products. Profit margins on petroleum products, which already vary widely based on location and business scale, can also fluctuate significantly throughout the year, swinging between positive and negative zones. In this context, companies are effectively transforming gas stations into "roadside service centers" to boost profitability.

Revenue and Profit Formation at Gas Stations
Fuel sales are the primary source of revenue for gas stations, accounting for over 85% of gross income on average, according to data from consulting firm OMT-Consult cited by Vedomosti Analytics. This figure is higher in large cities and urban agglomerations and lower in peripheral areas. In Moscow and the Moscow region, fuel sales make up 88–90% of gas station revenue, in St. Petersburg 82–84%, while in some regions, this share may drop below 80%.

Revenue from non-fuel goods and services contributes between 10% and 20–25% depending on the location, according to OMT-Consult. Non-fuel revenue from networks actively investing in this segment is growing at a rate of at least 30% per year, estimates Yuri Stankevich, Deputy Chairman of the State Duma Energy Committee. The non-fuel segment includes cafes, stores, pharmacies, car washes, auto repair shops, and tire services.

The contribution of non-fuel goods to revenue also varies with the location. In urban areas with developed infrastructure, beverages like coffee and mineral water can account for 6–8% of gross revenue. In less developed regions, automotive goods lead, contributing up to 15%. Service offerings make a minimal contribution to gross revenue, OMT-Consult estimates.

However, non-fuel goods play a more substantial role in profits. Their sales generate over 50% of gas station profits and can exceed 80% during periods of low fuel margin, according to the company.

Gas Station Earnings
Gas station revenues vary greatly depending on location, with much higher figures in city centers and along busy highways. OMT-Consult reports that the average daily revenue of a Russian gas station is about 462,000 rubles. However, some stations with prime locations and formats can generate over 3.3–3.4 million rubles daily, while others in sparsely populated regions may earn only 67,000–100,000 rubles per day. Revenue size doesn’t always indicate high profitability due to the high costs of maintaining modern large stations.

Key factors influencing gas station location decisions include traffic flow, accessibility, and competition. For example, in the Moscow region, stations of the same network must be at least 20 kilometers apart in one direction, and a town with a population of 100,000–150,000 may have three to four stations.

Profitability Drivers
Retail fuel prices at gas stations include production costs, excise taxes, and operational expenses. Factors influencing profitability include crude oil price dynamics, government fiscal policies, wholesale petroleum prices, and operational costs. Taxes and fees can constitute 60–70% of fuel prices.

Non-fuel sales have become a survival strategy for independent gas stations that lack the resources of vertically integrated oil companies. Development of these services requires significant investments in facilities, staff, licenses, and permits. High-traffic stations—only about 10% of the total—are better positioned to offset these costs.

Strategies for Profitability Growth
To improve profitability, gas stations focus on expanding their range of non-fuel goods and services. Current trends include installing EV charging stations, pickup points for marketplace orders, and pharmacy outlets. Companies also adopt energy-saving technologies, digital solutions, and loyalty programs to enhance efficiency.

According to the Russian Fuel Union, there are 23,000–24,000 gas stations in Russia, with major networks like Rosneft, Lukoil, and Gazprom Neft operating significant shares. Partner management models, where professional dealers manage stations, are increasingly used to optimize costs.

Developing a comprehensive government program for the sector could further enhance the profitability and sustainability of gas stations in Russia.



Translated using ChatGPT

Sourse: https://www.vedomosti.ru/analytics/krupnyy_plan/articles/2024/08/13/1055625-skolko-zarabativayut-azs.