SIC 5172 Petroleum and Petroleum Products Wholesalers, Except Bulk Stations and Terminals

SIC 5172

This industry class consists of wholesale distributors of petroleum and petroleum products (except those with bulk liquid storage facilities). Industry products include butane gas, fuel oil, aircraft fueling services, liquefied petroleum gases, gasoline, kerosene, lubricating oils and grease, and naphtha. Petroleum brokers are also included.

Companies that wholesale petroleum and petroleum products from bulk liquid storage facilities are in SIC 5171: Petroleum Bulk Stations and Terminals.

NAICS CODE(S)

424720

Petroleum and Petroleum Products Wholesalers (except Bulk Stations and Terminals)

INDUSTRY SNAPSHOT

According to statistics compiled by the U.S. Census Bureau, the number of firms engaged in the wholesale distribution of petroleum and petroleum products has been on a steady decline since the early 1980s. By 2004, approximately 2,850 establishments operated in this industry. In 1982, there were 6,287 such firms, and 10 years later the ranks had thinned to 3,700. The average wholesale distributor sells over 11.5 million gallons of petroleum each year.

ORGANIZATION AND STRUCTURE

From an overall petroleum industry perspective, the transactions between wholesalers and the retail level are among the least efficient components of the supply chain, due to the sheer number of transactions and their fixed order and delivery costs, according to National Petroleum News. As a result, the cost per transaction tends to be higher. Thus the wholesale channel was a major target of the industry's efforts at consolidation as an attempt to boost overall efficiency and cost-savings.

Moreover, the majority of wholesalers remained relatively small and thus lacked the economies of scale to afford high-level electronic data and tracking equipment that would more thoroughly and systematically track their activities through the supply chain. As the petroleum industry consolidated and moved toward integrating supply chains among all trading partners, from the refinery stage to retail, the pressures on distributors were expected to grow.

As of 2004 this industry was served by the Society of Petroleum Engineers (SPE), which conducted extensive research into methods of transport for oil and gas, among many other endeavors. The American Petroleum Institute (API) and the National Petroleum Council (NPC) were also...