KSA Gas Station Market Outlook to 2028

Market Overview:

The Kingdom of Saudi Arabia (KSA) Gas Station market is undergoing rapid evolution with significant growth potential. The surge in demand for fuel and related services has been a key driver, propelled by various sectors, including transportation, construction, and industrial activities. The market exhibits a consolidated landscape featuring prominent global players and a notable presence of small-scale foreign entrants. Notably, there are a limited number of domestic players actively participating in the sector.

Key players dominating the Saudi Arabian gas station market include Al Drees Petroleum & Transport Services Company, Saudi Automotive Services Co, Liter Group etc. Their strategic focus on providing high-quality fuel, advanced service offerings, and a seamless customer experience underscores the stability and growth potential of the KSA gas station market. The current market scenario suggests a trajectory of stable growth, and this trend is anticipated to persist in the medium to long term, driven by the continued demand for fuel and related services in the Kingdom.

The ecosystem of the Kingdom of Saudi Arabia (KSA) gas station market is a dynamic and interdependent network that encompasses various stakeholders contributing to the supply, distribution, and consumption of fuel. The companies mentioned below establish and operate gas stations across the country, ensuring a widespread network to meet the demands of diverse sectors, such as transportation, construction, and industrial activities.

KSA Gas Station Market Analysis

• The drive-thru model is gaining popularity, influenced by the aftermath of COVID-19 and the effects of climate change. In Riyadh alone, there are over 6,000 drive-thru barista coffee businesses, indicating widespread adoption. Gas station companies can explore partnerships with food companies offering drive-thru services to tap into this trend.
• Approximately 30% of a surveyed group of 100 consumers regularly utilize services provided by convenience stores. The younger generation, in particular, seeks diverse services under one roof, such as convenience stores, food cafes, Gas Station shops, or car wash facilities.
• Incorporating digital screens at convenience stores is crucial for providing customers with a preview of available products and services. This increases the likelihood of customers making a purchase when they are well-informed about the store's offerings.
• Simplifying and streamlining services through apps has led to increased sales. For instance, Zoom now accepts orders through the Instazoom app for customers at gas stations. Customers can place orders while refueling their cars and receive them directly at their vehicles. Additionally, new customers are offered incentives as part of this service.

Key Trends by Market Segment:

By Station Category: As of now type C stations are the leading gas station type in KSA.But with the government's commitment to enhancing gas station quality and consolidating industry players in the Kingdom of Saudi Arabia, a notable surge in the numbers of Type A and Type B stations is anticipated. These establishments, equipped with convenience stores, restaurants, cafes, mosques, and various amenities, are poised to become increasingly popular. The strategic incorporation of diverse facilities within Type A and B gas stations is expected to drive heightened demand, aligning with the government's vision for elevated service standards and enhanced customer experiences. This shift underscores a holistic approach, emphasizing not only fuel services but also creating comprehensive hubs catering to the multifaceted needs of consumers.

By Fuel Type: KAPSARC provided the retail demand for Diesel and Petrol separately, which is weighted along with their respective average prices to identify the revenue contribution from Petrol and Diesel. According to Asian Clean Fuels Association (ACFA), 70% of the total petrol consumption comes from Petrol 91 while the rest comes from the premium unleaded Petrol 95. With higher growth in new and premium car growth, the future growth for Petrol 95 will be higher than that of other two major fuel types in Saudi Arabia.

By Regions: Central and Western region are the highest constituents in terms of number of gas stations with the presence of major provinces such as Riyadh, Qasim, Makkah, Madina and Tabuk. These region combines constitutes more than 65% of the total population of the Kingdom.

In terms of total number of cars, Central and Western region have nearly 70% of the total cars in Saudi Arabia, leading to more than 65% of the total gas stations coming from these two regions. This also indicates the higher average revenue per gas station in these regions as compared to the other provinces in the Kingdom.

Competitive Landscape:

Major Players in KSA Gas Station Market

• Positioning for robust growth, Aldrees Petroleum and Transport Services aims to strategically operate 1,000 service stations over the next five years. Focused on expansion, the brand will accelerate its acquisition strategy, affirming its commitment to thriving in the competitive Saudi fuel retailing market.
• Saudi Automotive Services plans to add 100 new stations in 2 years, aiming to achieve a network of 615 stations, implying a growth of 20%. It also plans to add 40 Palm stores (convenience stores) within the premises of petrol stations this year.
• Gulf Oil has expanded from 4 to 60 location in the country and looking to increase its footfall in the kingdom by opening new locations.

Recent Developments:

• With recent deals taking place between major companies such as Total Energies with Aramco and acqusition of Sahel, Sasco acquisition of NAFT indicates the target of large companies aiming to consolidate their locations in the country by acquiring small players.
• In addition to traditional gasoline and diesel, gas stations in Saudi Arabia are increasingly offering alternative fuels such as compressed natural gas (CNG) and liquefied petroleum gas (LPG). This is in line with the country's efforts to reduce its reliance on oil. The number of CNG filling stations in Saudi Arabia is expected to reach 1,2000 by 2028, up from around 400 in 2022.
• The Ministry of Urban, Rural and Housing Affairs in Saudi Arabia has made it mandatory to have a coffee shop or restaurant in Category A petrol stations, failure of which will attract a fine of SAR 5,000. There are other violation fines such as availability of clean toilets, tire shops, availability of  containers or barrels for waste collection and more which will attract the fine ranging from SAR 1,000 to SAR 25,000.