Consumers and Distribution System

Home and commercial heating oil (primarily No. 2 fuel
oil) and "on-highway" diesel fuel accounted for 67 percent
of the national demand for middle distillates in 1974.
The other principal uses of middle distillates were:
agriculture and construction, 4 percent; railroads, 9 per-
cent; electric utilities, 7 percent; industrial equipment,
7 percent; vessels, 2 percent; and, military and
miscellaneous, 4 percent.

The regional distribution of distillate fuel oil is
depicted by U.S. Bureau of Census regions in Table IV and
Figure III-10.
Figure III-11. As these data indicate, end-use market
demand varies regionally. Heating represents the major
middle distillates demand market in the Northeast and
the North Central states, and diesel fuel and other forms
of transportation represent the major middle distillates
demand markets in the South and West.

Regional boundaries are indicated in

Middle distillates move through a complex system of
pipelines, trucks, and intermediate storage facilities
operated by refiners, terminal operators, distributors, and
other retail dealers. At each level in this system, some
facilities are owned or controlled by major or independent
refiners, while others are owned and operated by independent
(non-refiner) marketers, both branded and nonbranded.

Jobbers buy products from refiners or terminal

operators for sale directly through their own or other
dealers.

The jobber usually owns his delivery equipment
and either owns a bulk storage plant or uses a terminal.
Branded independent marketers operate at both the
retail and wholesale levels, selling products under the
brand name of a refiner. Nonbranded independent marketers
perform the same functions as do branded terminal operators,
jobbers, and retail dealers, selling products under their
own brand names or supplying other nonbranded independent
marketers.

The distribution structure of the middle distillates
market varies with the type of end-user involved.

As

portation (1) 16.5

N/A

N/A

18.2

34.7

shown in Table V, utilities, industries, and other large-scale accounts, which require large volumes but limited service, are served primarily through direct marketing by refiners. Independent marketers, on the other hand, play a dominant role in the retail distribution of diesel fuel and heating oil to the small consumer, who requires additional services.

Sources:

no for total end-use. PEA Fuel Oil Survey (FFA-P-306-S-0) for marketer distribution by end-use.

(1) Includes diesel for on and off-highway uses, railroads and vessel bunkering.