Unbranded vs. branded gasoline: Is there a difference?

 

Gasoline by any other name still smells as sweet.

 

When it comes to branded and unbranded gasoline what comes out of the refinery from BP, Exxon or Citgo, may not be the same product that consumers think they are getting at the branded pump.

While all gasoline sold in the US has to meet quality standards, the farther you get from the refinery, the less likely you are to know where your gasoline comes from, said Jeff Lenard, vice president of communications at the National Association of Convenience Stores, or NACS.

 

While some retail stations promise gasoline from Shell, the unbranded gas station down the street could also be selling Shell gasoline, but at a cheaper cost to consumers.

 

The process from refining to pipeline shipment to storage starts with a specific brand and ends with a mix of gasoline from several different producers.

 

“All gasoline that comes out of refineries that has met governmental standards is then shipped via a pipeline where it is then put into a wholesale terminal of about 3 million gallons,” said John Eichberger, vice president of government relations at NACS.

 

From there the gasoline gets mixed with product from other refiners and then shipped through another pipeline to a storage facility.

 

At that point, said John Eichberger, vice president of government relations at NACS, there is no way to tell which gasoline was produced by which refiner.

 

“I don’t think retailers in the US can say with certainty where their fuel comes from,” said Lenard.

 

At Valero, spokesman Bill Day said that much is true.

 

“It is true in that gasoline is a fungible commodity,” said Day whose company owns and operates almost 1,000 branded stations in the US. “But there are certain detergent packages, added at the end, that make it brand specific. But it doesn’t necessarily mean that the gasoline that is for sale at a branded station was made by that refinery.”

 

What partially sets apart branded versus unbranded gasoline is the detergent or additive package that is injected into the gasoline before it heads to the branded station, claiming to aid in automobile performance.

 

Chevron boasts its Techron patented additive that the company says reduces the accumulation of deposits in fuel injectors and on intake valves, and minimizes build-up of deposits in the combustion chamber. In short, it will help your vehicle perform better.

 

But with added incentives in the gasoline, also comes added price.

 

Unbranded gasoline that heads to stations like US Gas also receives the detergent or additive package, albeit a generic one that is regulated by the government. But with price at the forefront, more retailer store owners are making the move to unbranded stations as consumer’s eye price over performance.

 

“The brand right now is price,” said Lenard. “The brand may come back if the brand can offer consumers something other than price.”

 

Valero’s Day said their gas stations do not offer a patented “value-added” detergent package to their gasoline.

 

“We have distribution agreements and add proper packages at the rack but we don’t have specifically branded additives,” said Day. “All of those packages add to price and Valero competes on price, not marketing.”

 

Retail gasoline station owners in New Jersey are encouraged to make the change from branded to unbranded, said Sal Risalvato, executive director of the New Jersey Gasoline-C-Store-Automotive Association.

 

“There has been a transition over the past five to six years,” said Risalvato, referring to many retailers switching to unbranded gasoline stations. “We encourage it because [the gasoline] can be bought and sold cheaper. Branded and unbranded is all the same stuff.”

 

The question of branded versus unbranded came to the forefront following BP’s massive oil spill in the gulf when angry consumers pushed to boycott BP products.

 

“All gasoline gets co-mingled at the rack before it goes to the pump,” said Risalvato.” If you boycott BP you are hurting the small businessman. You could then drive down the street to an unbranded station and pump BP gasoline without knowing it.”

 

Around 50% of Risalvato’s nearly 1,500 membership is now made up of unbranded retailers versus around 30% unbranded 10 years ago.

 

“There was a time 20 to 25 years ago when you could tell the difference of whose gas was whose but today you can’t because of how fungible the product is,” Risalvato said. “It is the nature of the business today.”

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Comments

  1. P Moore at March 27, 2014 5:21 pm

    I have a small chain of gas stations in south Alabama , five stations are branded and the other four are unbranded . The unbranded stores usually have a 25% better magrin than the branded stores. We never have negative remarks of the unbranded product we sell. The only plus in the branded stores is the credit card processing is better.
    My future locations will be unbranded .

     
  2. Elaine at March 12, 2014 3:42 pm

    Is there any way to tell if your vendor is delivering branded or unbranded gasoline? Can I tell from a Bill of Lading? For example, at a DPW that has storage tanks, how can I tell if the vendor who is delivering the fuel is delivering branded or unbranded?

     
  3. Reva at February 11, 2014 7:15 pm

    What are the rules for an unbranded gas/convenience store operating with branded store signs still posted? Customers thinking they are buying branded gas or wanting to know why their branded credit card is no longer being accepted there.

     
    • John Kingston at February 11, 2014 9:35 pm

      I don’t think such a thing is possible. If it’s flying a brand, it’s by definition branded. The station is required, for example, to buy Exxon gasoline at an Exxon rack if it’s branded Exxon outside. I don’t think the situation you are describing can exist. As far as the credit card issue, I really don’t know; maybe there would be an issue with the bank that backs the card. But as for the fuel itself, if there’s a brand outside, the dealer is absolutely supposed to be selling only gasoline provided by that supplier. If there are exceptions to that, I’d be glad to hear.

       
  4. John S. at January 16, 2014 10:19 am

    Coming from the standpoint of a gas station owner and hearing from my repeat customers, there’s definitely a correlation in reports of lower mpg’s from fillups at 3rd party stations such as Pilot/Flying J and Loves. As far as a general unbraded no-name filling stations, I’ve yet to hear positive/negative reviews.

     
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