Review of the Rural Petrol Stations Grant Scheme Final Report
APPENDIX B: CALCULATION OF VEHICLE MILEAGE CHANGES
This appendix gives details of the processes and assumptions used to calculate the potential additional mileage that would be created if a typical rural petrol station were to close. It should be noted that this analysis provides an estimate of the mileage effect of the closure of one rural petrol station and not that of a large-scale reduction in the fuel supply network in an area, the effects of which could be significantly different.
In order to estimate the additional mileage, it is first necessary to calculate the average number of customers each petrol station serves in a year. Although business respondents were not asked this directly in the survey, they were asked approximately how many litres of fuel the sell each year and this latter figure provides a method to estimate the number of customers.
The average volume of fuel sales of all the surveyed businesses was 885,000 litres per annum. The price per litre of each type of fuel was obtained from the AA UK fuel prices report April 2004 ( http://www.theaa.com/allaboutcars/fuel/) and an average price obtained (shown in the table below).
TABLE B1 UK FUEL PRICES: APRIL 2004 (SCOTLAND REMOTE AREAS)
Fuel Type | Price per litre |
Higher Octane Unleaded | 86.1 |
Unleaded 95 Octane | 82.0 |
Diesel | 83.3 |
LPG | 38.4 |
Average 38 | 83.8 |
The customer surveys determined how much each respondent had spent on fuel in that purchase and the average fuel transaction was calculated as 23.00 for local residents and visitors combined. Using this information and the average price of fuel per litre it was calculated that on average respondents purchased 27 litres of fuel per transaction. Therefore if a petrol station sells on average 885,000 litres per year, it can be estimated that they make approximately 32,000 fuel transactions per year.
Anecdotally from discussions with petrol station owners, throughout the year approximately two thirds of customers were local people and the remaining one third classed as visitors. The average total of fuel transactions per petrol station has therefore been split in this way to give an approximate number of resident and visitor purchases a year.
Local residents
Of the 227 residents who were surveyed, 88% stated they would have to drive further in order to reach their second choice petrol station if the site at which they were surveyed were to close. Another question asked how many additional miles they would have to drive, of which the average additional distance stated by residents is 26 miles. When compared to the business survey results, which show the next nearest petrol station to be on average 12 miles away it can be seen that there is some disparity between the two survey results. This may be due to misunderstanding of the question by respondents in the customer survey combined with a small sample size.
We have, therefore developed an alternative method for additional mileage estimation. Resident respondents were asked about the distance of their home to the survey site (average 5 miles) and the distance from their home to their second choice petrol station (average 15 miles. Using this data it can be determined that the average maximum additional distance required is approximately 20 miles (assuming that the maximum additional distance is equal to the distance between closest and second closest station, doubled to account for the return journey).
The average additional distance for all residents is therefore approximately 10 miles (assuming the minimum distance is zero miles). As only 88% of respondents stated they would have to drive further, this results in an average additional distance of 9 miles. As this figure is more closely related to that given in the business surveys, it is assumed that this is a reasonable estimate of the effects of fuel station closure.
Results from the customer survey show that on average residents drive approximately 15,000 miles per annum. If on average a car travels 6.7 miles per litre (30 miles per gallon) and given the average purchase is approximately 27 litres it can be assumed that on average residents will purchase fuel approximately six times a month. Using this information, it can therefore be shown that over the course of a year a typical resident would have to travel around 700 additional miles to purchase fuel if the petrol station nearest to their home was to close.
If a petrol station has on average 32,000 fuel transactions a year (of which approximately two thirds, 21,000, are residents). When multiplied by the 9 additional miles per fuel transaction, this results in approximately 190,000 additional miles driven by residents of the vicinity of the station per petrol station closure per annum.
All the key information used in the above calculations and assumptions is shown in the table below.
TABLE B2 ADDITIONAL MILEAGE FOR LOCAL RESIDENTS
Proportion who would have to drive further | 88% |
Estimated average number of additional miles | 9 miles |
Estimated average number of resident customers per year per station | 21,000 |
Estimated additional mileage per person per year | 700 miles |
Estimated additional mileage per petrol station per year | 190,000 miles |
Visitors
Of the 54 responses from visitors to the area, 67% stated that they would have to drive a longer distance on the day of the survey in order to access an alternative petrol station. On average this additional distance was estimated by respondents to be 25 miles. As with the surveys of residents, this differs significantly from data gathered in the business surveys regarding the proximity of the next nearest petrol station and may, we feel, be an overestimate of the real effects. As a result, the average distance to the nearest petrol station obtained in the business survey was used as the basis for this analysis.
As stated previously, this average distance was estimated to be 12 miles. Hence the average maximum distance a person would have to drive to purchase petrol is 24 miles (assuming they would then have to drive back again). If the maximum additional distance visitors would have to drive is 24 miles and the minimum additional distance would be zero, the average additional distance is therefore 12 miles. However, as only 67% of visitor respondents stated they would have to drive any additional distance at all, the overall average additional distance is therefore approximately 8 miles. It appears consistent that additional mileage per transaction will be less for tourists than residents as the former category will, in general, be on longer journeys and hence more likely to be passing alternative sites.
It has already been stated that visitors account for approximately one third of all fuel transactions, equating to an average of 11,000 fuel purchases per petrol station per year. If this is multiplied by the additional mileage per transaction, it results in an estimated 90,000 additional visitor miles per petrol station per year.
All the key information used in the above calculations and assumptions is shown in the table below.
TABLE B3 ADDITIONAL MILEAGE FOR VISITORS
Proportion who would have to drive further | 67% |
Estimated average number of additional miles | 8 miles |
Estimated average number of visitor customers per year per station | 11,000 |
Estimated additional mileage per petrol station per year | 90,000 miles |
Summary
The estimated additional mileage per petrol station per year has been calculated separately for both residents and visitors, however if they are added together it results in an estimated total additional mileage of 280,000 miles per petrol station per year.
The average mileage per annum of resident respondents was stated to be approximately 15,000 miles a year, which is higher than the UK average of 9,400 miles a year 39. It has been calculated in the sections above that for residents, the closure of a petrol station site would result in approximately 700 additional miles per year. This represents an estimated increase in total vehicle mileage in the vicinity of the petrol station of around 5%.
