As EVs dominate, why are Esso petrol stations being acquired and what will the future look like?
The purchase of petrol stations – a ‘sunset’ industry – comes at a time where EV-maker BYD is outselling long-time king Toyota
[SINGAPORE] Indonesia’s Chandra Asri recently announced its plans to buy ExxonMobil’s Singapore Esso petrol kiosk chain for US$1 billion.
The move, announced on Oct 24, comes at a time where petrol stations are shuttering. The number of stations in Singapore has decreased by more than 17 per cent since 2003, The Straits Times reported.
Not only are there fewer petrol stations, electric vehicles (EVs) and hybrids are so in vogue that China’s BYD toppled Toyota to become the No 1 brand in terms of new car registrations.
EVs also made up 43 per cent of new car registrations in the first nine months of 2025 here. In comparison, they accounted for 33.8 per cent of new car sales in the whole of 2024 and 18.2 per cent in 2023.
Elsewhere, Shell is divesting some assets in the fuel business. It completed the sale of its Singapore refinery and refining assets to a Chandra Asri-Glencore joint venture, it said earlier this year. Shell also agreed to sell its petrol station business in Indonesia to a joint venture, according to Bloomberg.
The Business Times takes a look at what might be driving Chandra Asri’s charge into petrol stations against the declining backdrop.
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Strategic diversification since 2024
Chandra Asri, a chemical and infrastructure solutions provider in South-east Asia, operates Indonesia’s largest petrochemical complex.
In response to queries from BT, a spokesperson from Chandra Asri said: “This acquisition is part of Chandra Asri’s regional expansion strategy to strengthen its presence in the South-east Asian retail energy market.”
Chandra Asri’s website stated that the group in 2024 embarked on a “strategic transformation to become the leading energy, chemicals and infrastructure solutions company in South-east Asia”.
The initiative focused on several key objectives that included diversification of its business portfolio. Today, Chandra Asri owns businesses that include manufacturing, trading and petrochemicals.
In October, Chandra Asri and Glencore’s joint venture Aster established a dedicated energy business called Aster Power. It will deploy about 16 megawatt-peak of solar capacity in Singapore by end-2026 in what seems to be another diversification push.
Chandra Asri’s expansion into petrol stations, with Singapore’s transition to only hybrid or electric new car registrations just five years away, could be a similar move, said experts.
Professor Lawrence Loh, director at the Centre for Governance and Sustainability at the National University of Singapore (NUS) Business School, theorised that the acquisition might be a way for Chandra Asri to expand both vertically and horizontally into retail and EVs.
A potential switch to electrification
Prof Loh said there could be an opportunity for Chandra Asri to capture the future of mobility in Singapore by adding EV charging points at Esso’s stations.
Chandra Asri acknowledged the rise of EV and plug-in hybrids as a potential part of its long-term plan for the petrol stations.
“While EV demand will increase, we project a managed transition period where petrol vehicles will remain in use,” said a spokesperson in response to BT.
Prof Loh also noted that the electricity generated for EVs and plug-in hybrids could itself come from fossil fuels or renewables, both of which Chandra Asri has an established presence in.
In September, Aster said it was investing US$125 million to upgrade its single buoy mooring and pipeline infrastructure near the Pulau Bukom refinery.
Jochen Siebert, the Singapore-based managing director at car consulting firm JSC Automotive, echoed Prof Loh’s view and said the move is likely more about diversification than pure profit-making from petrol stations.
“That is the only thing that makes sense from my point of view,” he said.
Still, he noted that the transition to full electricity will take some time and petrol will still have a place in the market. There are still five years until all new cars must run on cleaner energy, while there is no such target yet for pure EV sales.
In the meantime, the mass market might show a preference for hybrids instead, said Siebert, with most still requiring petrol fill-ups.
“I don’t think that there won’t be any more petrol stations in Singapore, but much less than there are today,” said Siebert. “Let’s say, 10 to 15 years from now... maybe only one per town.”
According to the Deloitte 2025 Global Automotive Consumer Study, 31 per cent of consumers in the city-state chose hybrids as their next vehicle. This compared to 12 per cent choosing battery EVs and 41 per cent choosing petrol or diesel cars.
Dr Walter Theseira, an associate professor of economics at the Singapore University of Social Sciences, also said the demand for petrol will not go away that quickly.
“There is a very strong likelihood that many cars will still be sold come 2030 which require petrol,” he said.
However, he added that a transformation of the Esso petrol stations into pure EV charging lots was a “nonsensical” pathway.
“As far as I understand it, there is actually no pure-play EV charging model anywhere in the world that is financially very sustainable at the moment,” explained Prof Theseira.
“In Singapore, and actually most countries, the most economical means of charging EVs is likely to be low-power, widely distributed charging available in car parks.”
Siebert similarly stated that it is likely that users will prefer destination or overnight charging instead of super-fast chargers that are akin to petrol top-ups.
Convenience stores and more?
Shell has already begun changing the face of the ubiquitous petrol station convenience store model, and Chandra Asri might have to follow suit to generate revenue in the shrinking petrol station sector.
In 2017, Shell ended its partnership with 7-Eleven and brought in food and beverage chains such as Ya Kun Kaya Toast, Old Chang Kee and McDonald’s Drive-Thru at certain stations.
Three in 10 customers visited Esso’s FairPrice-operated convenience stores to purchase daily essentials, a FairPrice spokesperson told ST in 2024. One outlet last year also opened a Maki-San takeaway sushi counter.
“The petrol retail business model tends to derive revenue from both the petrol sales as well as the sales of convenience products,” said Prof Theseira.
Where the revenue and its associated margins are built up depends on the model that Chandra Asri will want for the Esso stations, he added.
Some retailers get “most of their margin” from ancillary sales rather than petrol sales, said Prof Theseira, pointing to overseas examples where large shopping centres are located alongside petrol stations.
Whether Chandra Asri would want to push for profitability from the petrol stations themselves is “up to them”, but petrol as a “loss-leader” to drive higher sales elsewhere is not an unprecedented model, he said.
Is this a good purchase for Chandra Asri?
“I think there’s no such thing as a good or bad purchase. What there is, however, is a good or bad price,” said Prof Theseira. “Buying a sunset industry is a perfectly good business decision as long as the price reflects the market value.”
To fund the deal for the 60 Esso petrol stations, Chandra Asri is in talks with Global Atlantic, the insurance arm of KKR & Co, for a US$750 million unitranche facility, according to Bloomberg’s sources. Chandra Asri will fund the remaining amount through its own equity.
The Indonesian energy player is also in talks with at least one other fund for a loan to back the acquisition, said Bloomberg.
The petrol station market is not necessarily saturated, said Prof Theseira, despite strong competition from Shell and SPC. This is due to government limitations around zoning, the number of stations and their location.
Those limitations mean that the only “realistic” option to have a retail presence in Singapore would be through the acquisition of an existing retailer such as Esso, said Prof Theseira.
Prof Loh said Chandra Asri is likely able to “size the market better than big oil”, he said, pointing to ExxonMobil’s exit that was reported as early as December last year.
That leaves an opportunity for Chandra Asri to diversify like existing big oil players, who have units in “every part of the value chain”, and become a similarly large player itself.
However, Siebert cast doubts on whether the energy company understood that a downstream business such as petrol stations were effectively a retail play.
The move is less the creation of a “full stack” across the entire oil supply chain, but more of a diversification push, he said.
Still, Prof Loh said ExxonMobil may be unwilling to take on retail risk amid the changing petrol landscape in Singapore, but Chandra Asri could nevertheless extract value from its stations here.
It seem then that petrol stations are here to stay – at least for a while more.
“At least in the Singapore context, it seems to me that this will not be a sunset industry for a good many years,” said Prof Theseira. “It will be an extremely gradual process that will take place over the next one to two decades.”
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