Bubble tea or kaya toast, sir? Petrol kiosks offer more retail options as gas demand falls

SINGAPORE - The number of petrol stations in Singapore has fallen over the past two decades, mirroring a global trend as demand for petrol wanes and electric vehicle (EV) adoption grows.

This comes even as remaining petrol stations evolve to offer more varied retail options, selling sushi, bubble tea, fast food and even kaya toast, to snag consumers, in addition to charging points for EVs.

There are currently 184 petrol stations in Singapore, according to petrol station operators. This is down 17.1 per cent from the peak of 222 in 2003.

The locations of petrol stations are planned by the Urban Redevelopment Authority (URA), which said it considers national and local land needs and key trends such as the growing adoption of EVs when setting aside land for petrol stations.

It pointed out that the number of stations in Singapore has been "largely stable" in recent years.

That said, there are signs that demand for petrol has dropped, which experts attribute to more fuel-efficient automotive technology and the take-up of electric vehicles.

Data from the Land Transport Authority (LTA), showed that the average annual mileage of a car in 2023 came up to 16,300km, down 19.3 per cent from 20,200km in 2003.

Shorter distances travelled would mean that most cars would need less fuel.

Newer cars are also more fuel efficient. For instance, the latest Toyota Camry, which is a large sedan with a 2.5-litre hybrid engine, uses 28.1 per cent less fuel than the version from two generations ago that came with a 2-litre engine and no hybrid assistance.

Hybrid technology cuts fuel consumption by reducing the load on the internal combustion engine, while EVs do not use any petrol at all. Both are increasingly popular.

As at the end of 2023, there were 79,256 petrol-electric hybrid cars and 11,941 fully electric cars, accounting for 14 per cent of the total car population in 2023. This is up from only 0.8 per cent of the total car population in 2013.

The EV population is growing rapidly.

In the first seven months of 2024, the number of EVs have surged by 60 per cent, to 19,098 electric cars. In that period, EVs made up 32.1 per cent of new car registrations.

Automotive industry consultant Say Kwee Neng expects EV adoption rate to accelerate as charging times come down and the range of EVs improve.

"Unquestionably, the demand for petrol will fall. The extent will depend on the EV adoption rate. But would we need the same network of petrol stations? All signs point towards a smaller retail footprint for petrol companies in the days ahead," he said.

The decline of petrol stations here mirrors what is happening elsewhere.

In a 2021 report, management consultancy Sia Partners projected that the number of petrol stations in Europe would fall by 43 per cent in 2050.

It reasoned that this would be due to a combination of a fall in average vehicle fuel consumption, the reduction in the proportion of internal combustion engine cars, and the continued reduction in distances travelled by car.

Meanwhile, petrol stations are broadening their store offerings to draw more customers who may be EV drivers waiting for their cars to be charged or residents living nearby.

Shell, after ending its 11-year partnership with convenience store chain 7-Eleven in 2017, has brought on food and beverage chains Ya Kun Kaya Toast and Old Chang Kee, as well as some bubble tea brands to its stations.

> The Shell petrol station at 49 Serangoon Garden Way features a bubble tea shop. PHOTO: The Straits Times

It also houses McDonald's Drive-Thru stores at stations at Havelock and Hougang after opening the first one in Tampines in 2017. Shell's spokesperson said it is in the midst of rolling out its own Shell Cafes at its stations to serve barista-style crafted coffee and food at its stations.

At Esso stations, the convenience stores are by FairPrice Group, which told The Straits Times that three in 10 customers visit these outlets to stock up on essentials and not to fill up their vehicles.

The FairPrice spokesperson also said more customers were buying ready-to-eat items, such as pastries, and ready-made meals.

In March 2024, the Esso station at Toa Payoh Lorong 2 was the first petrol station to have a Maki-San takeaway sushi counter at its FairPrice Xpress convenience store.

Cydric Chung, Maki-San's director, said besides drivers, the counter has seen residents who live nearby patronise the store.

Some of these food outlets also serve as nodes for food delivery, working with food delivery platforms to broaden their coverage.

Chin Kim Poh, a food delivery rider, said he picks up orders from the Maki-San outlet at the Toa Payoh Esso station at least one to two times daily for customers living in Toa Payoh, Bishan and Balestier.

Edwin Loo, associate editor at real estate consultancy Cistri, said the retail services at petrol stations take on a larger importance in landed housing estates.

"Petrol stations retail kiosks play a slightly more important role in landed housing estates with low retail provision, but do not play a significant role in providing retail amenity to residents in HDB towns who are already well served by HDB shops and their respective town centres," said Loo who was with the URA's urban planning team lead before joining Cistri.

Transport economist, Associate Professor Walter Edgar Theseira, from the Singapore University of Social Sciences, said market forces will eventually decide how petrol stations will evolve in Singapore.

"If the market has excess capacity, this will show up in lack of interest to bid for leases (to operate petrol stations)," he said.

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This article was first published in The Straits Times. Permission required for reproduction.