top states to start a gas station

All the factors you must consider to find the perfect gas station location.

Are you thinking about opening a gas station?

Finding the right place to do so could make the difference between success for your small business and failure. This article will explore the states with factors and characteristics that make it more likely for a gas station to succeed. Small business owners can use the information to decide where it makes the most sense to open or buy a service station.

States with the most vehicles

The demand for gas will be relatively higher in states that have the most registered vehicles:

  1. California: 30.4 million
  2. Texas: 22.4 million
  3. Florida: 18.5 million
  4. New York: 11.3 million
  5. Pennsylvania: 10.1 million
  6. Ohio: 10.1 million
  7. Illinois: 10.6 million
  8. Georgia: 8.8 million
  9. North Carolina: 8.7 million
  10. Michigan: 8.5 million
  11. Virginia: 7.3 million
  12. Washington: 7.3 million
  13. Indiana: 6.2 million
  14. Arizona: 6.1 million
  15. New Jersey: 6.0 million
  16. Tennessee: 5.9 million
  17. Minnesota: 5.7 million
  18. Wisconsin: 5.6 million
  19. Missouri: 5.6 million
  20. Colorado: 5.4 million

This data is reported by Statista and covers 2020, the most recent year available. Based on it, there are states across the United States with a LOT of vehicles and drivers where it could make sense to open a gas station.

States with the highest number of gas stations

The states with the most gas stations, in order, are:

  1. Texas
  2. California
  3. Florida
  4. Georgia
  5. Alabama
  6. North Carolina
  7. New York
  8. Michigan
  9. Pennsylvania
  10. Ohio
  11. Tennessee
  12. Tennessee
  13. Washington
  14. Virginia
  15. Illinois
  16. Missouri
  17. Louisiana
  18. Wisconsin
  19. New Jersey
  20. Oklahoma

In many cases, the list of states with the most gas stations correlates with the one for the most vehicles. In others, it does not.

This indicates some states may be underserved, which could present an opportunity to open a new station, while others may be over-served, which means the competition could be too high to be worth it. For instance, California has fewer gas stations than Texas but far more cars. This could indicate opportunities to open stations in the Golden State. Georgia is number four on the gas station list but number eight on the list of drivers, which means it could be a competitive place to run a service station.

Station penetration is an essential consideration in choosing where to locate your new business. This includes the state and specific site. You don’t want to find yourself at an intersection — or exit ramp — with three competitors. You also don’t want to be the only gas provider in a place with few drivers and little traffic. The art and science of finding the best place to open or buy a service station is to locate an underserved area, where it’s unlikely that you’ll face significant competition in the future.

States with the most miles of roads

Next, let’s look at the states with the most miles of roads:

  1. Texas: 683,533 miles
  2. California: 396,540 miles
  3. Illinois: 306,658 miles
  4. Minnesota: 290,618 miles
  5. Kansas: 286,606 miles
  6. Missouri: 277, 504 miles
  7. Florida: 275,376 miles
  8. Georgia: 272,662 miles
  9. Ohio: 262,492 miles
  10. Michigan: 256,579 miles
  11. Pennsylvania: 251,708 miles
  12. New York: 240,489 miles
  13. Wisconsin: 239,318 miles
  14. Oklahoma: 238,754 miles
  15. Iowa: 235,549 miles
  16. North Carolina: 229,011 miles
  17. Arkansas: 210,729 miles
  18. Tennessee: 203,850 miles
  19. Indiana: 202,707 miles
  20. Nebraska: 193,996 miles

This data came from Cubit’s Blog and was originally compiled by the Federal Highway Administration.

I’m presenting it to show that you could identify gas station-worthy states by comparing miles of roadway to gas station numbers to vehicles. It can help you identify states like Texas with a lot of vehicles and a large number of roadway miles, and a reasonable number of gas stations, that might not have many potential locations for new stations. Diving deeper, you’ll find that a lot of Texas roadway mileage is in extremely remote rural areas, which likely don’t offer much in the way of opportunities. On the other hand, Minnesota has a relatively large number of cars, many miles of roads, yet relatively few gas stations. There could be places outside the remote areas in the northern part of the state that could need a gas station but don’t have one.

Roadway miles aren’t the strongest factor to consider when identifying a state to own gasoline stations in, but it’s one worth considering.

Tip: Hawaii is a challenging state for gas station owners to operate a business in. Motor fuel oil and other costs are relatively high, especially compared to states like Oregon, Oklahoma, and Texas.

Top states for gas stations that have convenience stores

Convenience stores are a key driver of income for gas stations. The top states with gas station and convenience store combos are:

  1. Texas: 13,756
  2. California: 10,187
  3. Florida: 7,283
  4. New York: 5,982
  5. North Carolina: 5,963

This data comes from Safegraph.com and is limited in scope. However, if you’re opening a gas station with a convenience store, it’s worth considering whether you’re entering a state that’s too competitive in that category. In this case, North Carolina may have plenty of these combined operations, and you’d have to develop a unique concept or find an underserved community to compete.

The following states have the highest foot traffic for gas stations with c-stores:

  1. Oklahoma
  2. South Carolina
  3. Arkansas
  4. Texas
  5. Tennessee
  6. Alabama
  7. Georgia
  8. Mississippi
  9. Kentucky
  10. Missouri
  11. Wyoming
  12. North Carolina
  13. Indiana
  14. Louisiana
  15. West Virginia
  16. Ohio
  17. Florida
  18. New Mexico
  19. Michigan
  20. Kansas

This data also comes from Safegraph.com and is worth reviewing if you want to open a combination gas station and convenience store. These operations get heavy foot traffic in the southern United States, so it might make sense to open one in a place like Oklahoma, South Carolina, or Arkansas. They may not have many drivers, but the ones they do depend on their gas stations and convenience stores.

Did you know: The top gas station brands are Shell, Exxon, Chevron, Speedway, and BP? Other well-known oil companies include Sunoco, Marathon, and Valero.

States with the highest demand for gasoline

The following states have the highest demand for gasoline based on a variety of factors:

1. Mississippi

  • Per person annual gasoline use: 578 gallons
  • Per person annual gasoline spending: $1,324
  • Total annual gasoline use: 1,722,554,239 gallons
  • Total annual gasoline spending: $3,943,000,000
  • Average price per gallon of gasoline compared with U.S. average: -11.9 percent
  • Per person annual vehicle miles traveled: 13,850 miles

2. North Dakota

  • Per person annual gasoline use: 577 gallons
  • Per person annual gasoline spending: $1,498
  • Total annual gasoline use: 440,308,622 gallons
  • Total annual gasoline spending: $1,144,000,000
  • Average price per gallon of gasoline compared with U.S. average: 0.0 percent
  • Per person annual vehicle miles traveled: 12,839

3. Alabama

  • Per person annual gasoline use: 570 gallons
  • Per person annual gasoline spending: $1,301
  • Total annual gasoline use: 2,798,198,295
  • Total annual gasoline spending: $6,385,000,000
  • Average price per gallon of gasoline compared with U.S. average: -12.2 percent
  • Per person annual vehicle miles traveled: 14,576

4. Wyoming

  • Per person annual gasoline use: 569 gallons
  • Per person annual gasoline spending: $1,474
  • Total annual gasoline use: 330,146,731 gallons
  • Total annual gasoline spending: $855,000,000
  • Average price per gallon of gasoline compared with U.S. average: -0.4 percent
  • Per person annual vehicle miles traveled: 17,530

5. Delaware

  • Per person annual gasoline use: 561 gallons
  • Per person annual gasoline spending: $1,457
  • Total annual gasoline use: 547,438,138 gallons
  • Total annual gasoline spending: $1,423,000,000
  • Average price per gallon of gasoline compared with U.S. average: 0.0 percent
  • Per person annual vehicle miles traveled: 10,382

6. South Carolina

  • Per person annual gasoline use: 549 gallons
  • Per capita annual gasoline spending: $1,261
  • Total annual gasoline use: 2,834,788,130 gallons
  • Total annual gasoline spending: $6,506,000,000
  • Average price per gallon of gasoline compared with U.S. average: -11.7 percent
  • Per person annual vehicle miles traveled: 11,104

7. New Hampshire

  • Per person annual gasoline use: 532 gallons
  • Per person annual gasoline spending: $1,356
  • Total annual gasoline use: 724,194,683 gallons
  • Total annual gasoline spending: $1,845,000,000
  • Average price per gallon of gasoline compared with U.S. average: -2.0 percent
  • Per person annual vehicle miles traveled: 10,121

8. South Dakota

  • Per person annual gasoline use: 523 gallons
  • Per person annual gasoline spending: $1,325
  • Total annual gasoline use: 464,451,253 gallons
  • Total annual gasoline spending: $1,176,000,000
  • Average price per gallon of gasoline compared with U.S. average: -2.6 percent
  • Per person annual vehicle miles traveled: 11,114

9. Missouri

  • Per person annual gasoline use: 509 gallons
  • Per person annual gasoline spending: $1,209
  • Total annual gasoline use: 3,127,887,990 gallons
  • Total annual gasoline spending: $7,427,000,000
  • Average price per gallon of gasoline compared with U.S. average: -8.7 percent
  • Per person annual vehicle miles traveled: 12,870

10. Arkansas

  • Per person annual gasoline use: 505 gallons
  • Per person annual gasoline spending: $1,165
  • Total annual gasoline use: 1,524,939,471 gallons
  • Total annual gasoline spending: $3,520,000,000
  • Average price per gallon of gasoline compared with U.S. average: -11.2 percent
  • Per person annual vehicle miles traveled: 12,242

11. Texas

  • Per person annual gasoline use: 505 gallons
  • Per person annual gasoline spending: $1,159
  • Total annual gasoline use: 14,645,221,408 gallons
  • Total annual gasoline spending: $33,594,000,000
  • Average price per gallon of gasoline compared with U.S. average: -11.8 percent
  • Per person annual vehicle miles traveled: 9,817

12. Montana

  • Per person annual gasoline use: 502 gallons
  • Per person annual gasoline spending: $1,390
  • Total annual gasoline use: 537,487,105 gallons
  • Total annual gasoline spending: $1,487,000,000
  • Average price per gallon of gasoline compared with U.S. average: +6.4 percent
  • Per person annual vehicle miles traveled: 11,931

13. Tennessee

  • Per person annual gasoline use: 501 gallons
  • Per person annual gasoline spending: $1,209
  • Total annual gasoline use: 3,418,976,274 gallons
  • Total annual gasoline spending: $8,258,000,000
  • Average price per gallon of gasoline compared with U.S. average: -7.1 percent
  • Per person annual vehicle miles traveled: 12,036

14. Kentucky

  • Per person annual gasoline use: 497 gallons
  • Per person annual gasoline spending: $1,237
  • Total annual gasoline use: 2,223,504,645 gallons
  • Total annual gasoline spending: $5,531,000,000
  • Average price per gallon of gasoline compared with U.S. average: -4.3 percent
  • Per person annual vehicle miles traveled: 11,036

15. Iowa

  • Per person annual gasoline use: 492 gallons
  • Per person annual gasoline spending: $1,203
  • Total annual gasoline use: 1,553,573,619 gallons
  • Total annual gasoline spending: $3,801,000,000
  • Average price per gallon of gasoline compared with U.S. average: -5.9 percent
  • Per person annual vehicle miles traveled: 10,601

This breakdown, from Commodity.com, could make the most straightforward case for entrepreneurs to select a state to open a gas station business in: Simple demand. Some of the states are surprising, North and South Dakota, for instance. Some states that are thought of as big-driving states, like California, don’t make the list.

In addition, states with low gas prices have higher demand, so this could be another factor worth tracking.

In the end, you need to consider demand, coverage, competition, and more to choose the right state and specific location to open a new business or buy an existing gas station.

The best way to evaluate all these factors is to write a complete business plan, including:

  • An analysis of where your station should be located
  • The start-up costs you’ll need to be prepared to pay before you open
  • How you’ll finance it
  • The type of business loans you’ll need
  • Your business model including whether you’ll be independent or part of a gas station franchise
  • Your rationale for operating it as a stand-alone station or with a convenience store, restaurant, or car wash
  • How you’ll market your operation
  • The profit margins you need to succeed
  • Your credit card processor and the financial institutions you’ll use.

Creating a complete business plan will help you think through all aspects of running your business and make it more likely that it will be successful, no matter what state or location you choose to run your own gas station in.

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