Fuel Station Market in Saudi Arabia Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Fuel Station Market in Saudi Arabia Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Saudi Arabia Fuel Station Market size is estimated at 516.01 Thousand barrels per day in 2024, and is expected to reach 580.45 Thousand barrels per day by 2029, growing at a CAGR of 2.38% during the forecast period (2024-2029).

Key Highlights

• Over the medium term, the increasing automotive sales and increasing investments in fuel station infrastructure across Saudi Arabia are expected to drive the market.
• On the other hand, the increasing adoption of alternative fuel vehicles in the country in order to meet the carbon emission targets set by the country can potentially hinder the market's growth during the forecasted period.
• Nevertheless, Saudi Arabia is working on a dynamic fuel delivery model. During the forecast period, a greater number of fuel stations are expected to come up, which would start the delivery of fuel to homes. The service is likely to provide advantages such as avoidance of city traffic and scorching heat while driving to get the vehicle refueled, offering significant growth opportunities for the fuel station market players in the coming years.​

Saudi Arabia Gas Station Market Trends

Increasing Automotive Sales In Saudi Arabia

• Saudi Arabia's automotive industry is expected to grow in a decent phase with the Vision 2030 program enabling domestic manufacturing and penetration of new technology and investments in the automotive industry. This is expected to increase domestic automotive sales and exports to neighboring countries.
• Saudi Arabia is one of the most advantageous and fastest-growing automobile markets. Multiple factors, such as the availability of labor, R&D efforts, geographic advantage, and supportive government policies, propel Saudi Arabia's automobile industry. Additionally, with a positive outlook on the country's economy and greater household purchasing power, automobile sales in Saudi Arabia are set to witness a strong surge in sales.
• According to the International Organization of Motor Vehicle Manufacturers (OICA), the total sales volume of vehicles (including all types of vehicles) in Saudi Arabia reached 6,16,491 units compared to around 5,56,559 units in 2021, representing an increase of almost 10.8% compared to 2021.​ In Saudi Arabia, the improved macroeconomic conditions, along with tens of thousands of driving licenses issued to women, positively impacted Saudi's auto market and services industry.
• Further, in early 2022, the Saudi National Automotive Manufacturing Co. (SNAM) confirmed laying the foundation stone for the first car assembly plant in Jubail Industrial City. According to SNAM, the assembly plant, along with the testing area, will reach 120,000 sq. m, and the plant's production capacity is set to hit 30,000 cars annually. Such target capacity is anticipated to be achieved within two or three years.
• In March 2023, Oil giant Saudi Aramco announced that it is preparing to join carmakers Geely and Renault in a new joint venture in hybrid and internal-combustion vehicles. Aramco has signed a letter of intent to become a potential minority stakeholder in the subsidiary. In November 2022, French automaker Renault announced teaming up with China's Geely to develop and produce engines, gearboxes, and other components for hybrid, petrol, and diesel vehicles.
• According to Renault, the Aramco partnership is expected to give the joint venture a head start in the race towards ultra-low-emissions ICE (internal combustion engine) powertrain technology. All these scenarios will likely boost the automotive industry and sales in Saudi Arabia and support the market for fuel stations in the coming years.
• Furthermore, the demand for commercial vehicles is also increasing from the construction sector, given the Kingdom's extensive pipeline of infrastructure projects. With this, the major global OEMs – Isuzu Motors, Mercedes, Man, and Volvo- have been trying to increase their heavy-duty vehicle production capacities in the country.
• Thus, the recovering trends of new vehicle sales are expected to grow significantly and continue over the forecast period, creating considerable demand for fuels and associated infrastructure in the coming years.

Increasing Adoption of Electric Vehicles to Restrain the Market

• Under the Saudi Vision 2030, the Saudi government looks forward to reducing its oil dependency. As the automobile sector accounts for almost a quarter of oil consumption in the country, the government aims to ensure a sustainable future by executing several reforms, such as promoting a shift toward cleaner fuel-based automobiles. Due to this, Saudi Arabia has been witnessing an increase in the adoption of alternative fuel vehicles, particularly electric vehicles (EV) and hydrogen-powered vehicles.
• With the country's rise in electric vehicles, the demand for charging stations will also increase. This demand necessitates the development of extensive vehicle charging infrastructure in the country, which is expected to increase charging stations on highways, parking, and commercial spaces, reducing reliance on fuel stations for other purposes.
• Moreover, the government of Saudi Arabia has launched various initiatives like tax credits, subsidies, and infrastructure developments. These steps are expected further to increase electric vehicle adaption in the country.
• For instance, in February 2022, Avass Group signed an agreement with the Saudi Arabian government to develop electric buses in the country jointly. The company is expected to manufacture electric buses in the country.
• The Saudi Industrial Development Fund has released a plan through which the country aims to have more than 65,000 electric vehicles on the road by the end of 2030. The electric vehicle market share in 2030 would be 10% of total automotive sales (ICE+EV) in Saudi Arabia.
• Additionally, recent technological advancements have significantly increased electric vehicles' driving range and efficiency. At the same time, various OEMs have also entered the market, which could decrease electric vehicle prices, further increasing their adaptability.
• Therefore, as per the points mentioned above, the increasing adaption of electric vehicles is expected to hinder the growth of the fuel station market in Saudi Arabia.

Saudi Arabia Gas Station Industry Overview

Saudi Arabia's fuel station market is moderately fragmented. Some of the major players in the market (in no particular order) include Aldrees Petroleum and Transport Services Company, ADNOC Distribution, TotalEnergies SE, Emirates National Oil Co. Ltd LLC (ENOC), and Saudi Aramco Oil Co., among others.

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