As of 2020, the Kingdom of Saudi Arabia (KSA) held the second-largest proven oil reserve in the world, after Venezuela. The country witnessed around 161.09 thousand barrels per day of gasoline demand in 2020, and by 2027, it is expected to witness a demand of around 231.56 thousand barrels per day, registering a CAGR of 7.31% during the forecast period of 2022-2027. The COVID-19 outbreak negatively impacted the consumption of refined petroleum products, such as diesel, as most of the commercial and residential spaces in the country rely on diesel generators for power supply. The restriction imposed limited the movement of vehicles that directly impacted the market. Major factors such as increasing adoption of the compact fuel station concept, expansion of existing fuel station infrastructure, and increased investment in the downstream sector by government and multinational corporations are expected to drive the market during the forecast period. However, fluctuating fuel prices, and stringent regulations implemented by fuel station industries are expected to restrain the Saudi Arabia fuel station market.
- Factors, such as expansion of existing fuel station infrastructure and increasing investment in the sector by both, the national firms and foreign players, are expected to drive the fuel station market in the country during the forecast period.
- As of 2020 budget, the Saudi government is planning to invest heavily more in the construction business, which includes new cities, shopping complex, etc. The new construction will not only boom the real state business, but it will also increase the need for a new fuel station in the constructed areas. Thus, this is expecetd to provide great opportunity for the market.
- However, factors, such as increasing adoption of electric vehicles, and lack of government surveillance and regulations to oversee the fuel station industry, are expected to hinder the growth of the fuel station market in Saudi Arabia, in the coming years.
Key Market Trends
Increasing Investment for Infrastructure Development to Drive the Market
- Saudi Arabia government is looking forward to find suitable solution to growing fuel demand due to the increasing quantity of on road vehicle. The government is looking for investment in the fuel infrastructure and establish fuel station to provide a last mile connectivity, especially for the rural parts of the country.
- A huge number of foreign companies have shown interest to invest in the fuel stations across the country which in turn is likely to drive the fuel station market.
- In October 2021, Saudi Aramco and French oil company TotalEnergies SE have opened first two service stations as part of a planned USD 1 billion fuel retail network across the kingdom.
- Additionally, Emirates National Oil Company (ENOC) , a wholly-owned entity of the Government of Dubai announced it plans to invest close to AED 2.2 billion to increase its service station network by more than eight-fold by 2030 to reach 124 stations to meet the growing fuel station demand in Saudi Arabia.
- Moreover, with increasing emphasis being laid upon by government and growing foreign investment, the number of fuel station is expected to witness a huge growth during the forecast period.
Increasing Adoption of Alternate Vehicles to Restrain the Market
- Under the Saudi Vision 2030, the Saudi government is looking forward to reducing its dependency on oil. As the automobile sector accounts for a significant share of oil consumption in the country, the government plans to ensure sustainable future, by executing several reforms in the country, such as promoting cleaner fuel-based automobile.
- Most of the major companies in the country are paying attention to the adoption of renewables in the country energy mix, and thus, investing in the business of electric vehicles. In a bid to move forward toward the Saudi 2030 Vision, the Saudi Electricity Company has signed an agreement with Japanese firms, Tokyo Electric Power Company, Tecaoca Coco Energy Solutions Company, and Nissan Motor Company, to implement an electric vehicle pilot project. Under the agreement, fast-charger stations are expected to be developed to charge EVs in 30 minutes.
- In January 2022, Lucid Group Inc. has announced to build an electric-vehicle factory in Saudi Arabia by 2025 and is negotiating details with ministries in the kingdom.
- Moreover, in June 2020, commercial imports of EVs and their charging stations were allowed in Saudi Arabia under specific procedures. A committee has been created headed by the Energy Ministry, in coordination with government and private agencies and research centers that aim to study all aspects of establishing infrastructure for EVs. Such efforts indicate its increasing interest in electric vehicle adoption. It is expected to hamper the demand for fuel stations as more electric vehicles are deployed in the country.
- According to the International Energy Agency (IEA), there is expected to be a 50 million electric vehicles on the road in the country by 2025, and 300 million by 2040, from close to the 2 million now. This is expected to cut domestic fuel demand from fuel-based vehicles in the country, which in turn, is expected to prohibit the demand for fuel station over the forecast period.
- Moreover, the falling cost of associated equipment, such as battery, is expected to result in reduction in the cost of electric vehicles and increase its uptake in the country, during the forecast period.
The fuel station market in Saudi Arabia is fragmented. Some of the leading market players include Tas’helat Marketing Company, Aldrees Petroleum and Transport Services Company, and ADNOC Distribution, ENOC, and Saudi Aramco Oil Co.
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1.2 Market Definition
1.3 Study Assumptions
4.2 Gasoline Production and Demand Forecast in thousand barrels per day, till 2027
4.3 Fuel Price Analysis
4.4 Number of Fuel Station Analysis
4.5 Scenario of Fuel Stations in Rural and Metropolitan Area in Saudi Arabia
4.6 Analysis on Consumer Behavior Pertaining to Fuel Stations in Saudi Arabia
4.7 Fuel Stations Expansion Targets by Companies/Government
4.8 Government Policies and Regulations
4.9 Recent Trends and Developments
4.10 Market Dynamics
4.11 PESTLE Analysis
5.2 Strategies Adopted by Leading Players
5.3 Company Profiles
5.3.1 Tas'helat Marketing Company
5.3.2 Aldrees Petroleum and Transport Services Company (APTSCO)
5.3.3 Al Osais International Holding Company
5.3.4 Petromin Corporation
5.3.5 Oman Oil Marketing Company (OOMCO)
5.3.6 ADNOC Distribution
5.3.7 Emirates National Oil Co Ltd LLC (ENOC)
5.3.8 NAFT Services Co. Ltd
5.3.9 Saudi Arabian Oil Company (Saudi Aramco)
A selection of companies mentioned in this report includes:
- Tas'helat Marketing Company
- Aldrees Petroleum and Transport Services Company (APTSCO)
- Al Osais International Holding Company
- Petromin Corporation
- Oman Oil Marketing Company (OOMCO)
- ADNOC Distribution
- Emirates National Oil Co Ltd LLC (ENOC)
- NAFT Services Co. Ltd
- Saudi Arabian Oil Company (Saudi Aramco)