Shell boosts gasoline sales, despite falling demand

HOUSTON — Royal Dutch Shell says it has boosted its domestic gasoline sales over the last five years, despite plummeting demand for the fuel in the United States.

Sales of its gasoline at retail stations have grown 5.5 percent since 2009, the company says. In that same period, overall gasoline consumption has fallen.

Gasoline consumption last year was down about 7 percent from the rate in 2007, according to the U.S. Energy Information Administration.

Backing research

Shell says its growth is a credit to its aggressive strategy to develop new fuel technology and its marketing efforts to boost interest in the specialized fuels.

The company spent $1.3 billion on research and development in 2012, a figure that includes its spending on developing new fuel additives.

“We believe that the Shell quality fuel, the technology, is something that no one else is competitive with us on,” said Elen Phillips, vice president of fuels sales and marketing for Shell’s Americas division. “We’re ahead significantly there.”

More refining

But it’s not clear whether consumers actually care about the differences between fuels and their additives, said Patrick DeHaan, senior petroleum analyst for GasBuddy, a consumer fuels information website.

A more likely explanation for Shell’s sales growth is related to the expansion of its massive Motiva refinery, which Shell co-owns with Saudi Aramco, DeHaan said. The refinery, the largest in the United States, completed a $10 billion expansion last year that doubled its capacity.

“They’re obviously going to be selling more gasoline because they’re producing more,” DeHaan said.

Shell also has added more retail stations to its network. It now sells fuel to 14,336 stations, up from 13,599 in 2008.

Engine performance

Phillips said more customers are choosing Shell because of its premium fuel, which the company says helps to keep certain engine components cleaner than other fuels.

“I think sometimes you can feel the difference,” Phillips said. “But the main difference is the miles per gallon. The cleaner your engine, the more efficient your engine and that’s going to affect the miles per gallon.”

Other major brands, like BP and Chevron, also have promoted special fuel additives that clean engines, DeHaan said.

“What you buy at BP is going to be slightly different than what you buy at Shell,” DeHaan said, citing additional additives that some fuel makers place in their gasoline, above those federally mandated for all fuels. “Motorists aren’t going to know, but in the long run there may be a tiny difference in the engine of someone using BP versus (fuel from a) mom and pop station.”

Shell has put out an aggressive advertising campaign to promote the capabilities of its latest premium fuel, which it says keeps engine intake valves much cleaner than fuels of competitors. See a video on the fuel below:

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