The changing landscape of petrol stations in Singapore: What lies ahead?
Some 2 million sq ft of land could potentially be primed for repurposing
EARLY this month, US energy major ExxonMobil was reportedly mulling the sale of its network of nearly 60 petrol stations in Singapore, which could fetch about US$1 billion.
This development, highlighted in a Bloomberg report, comes amid growing concerns over ebbing petrol demand as more drivers transition to electric vehicles (EVs).
What does Singapore’s petrol stations landscape look like?
Singapore is home to around 180 petrol stations, a decline of over 15 per cent from a peak of 222 stations in 2003. The market is dominated by major players such as ExxonMobil under its Esso brand, Shell Singapore, Chevron Singapore’s Caltex, Singapore Petroleum Company (SPC) and Sinopec.
ExxonMobil is believed to be the biggest player with 59 petrol stations under the Esso brand, followed by Shell Singapore, which has 57 stations across the island.
According to a 2023 market report by property consultancy Knight Frank, approximately 56 per cent of Singapore’s petrol stations are situated on private land, while the remaining 44 per cent are on sites tendered out by government authorities. These leases typically range from 10 to 99 years.
Government-tendered sites: a closer look
For instance, the Housing and Development Board (HDB) released 56 parcels of land for petrol station use between 1991 and 2020.
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The most recent successful tender in January 2020 was for a 1,725-square-metre (sq m) plot in Jurong East with a max gross floor area (GFA) of 862.5 sq m. The 10-year leasehold site drew three bids at the tender closing, with a top bid of S$33.8 million from ExxonMobil.
Another notable tender occurred in November 2019 for a 2,000 sq m site along Woodlands Avenue 5. The 30-year leasehold plot, offering a maximum GFA of 1,000 sq m, received four bids and was eventually awarded to Sinopec at a record price of S$115.4 million.
Zoning and land use
These sites are zoned as “transport facilities” in the Urban Redevelopment Authority’s (URA) 2019 Master Plan, used or intended to be used mainly for the parking of vehicles and transport facilities including garages.
When setting aside land for such sites, URA said it considers national and local land use needs, site context, as well as key trends such as the growing adoption of EVs.
The agency added that the number of stations in Singapore has remained largely stable in recent years.
ExxonMobil’s petrol station sale
Should ExxonMobil proceed with the sale of its petrol station network, regulatory hurdles may arise, particularly for stations located on land tendered out by authorities.
Savills Singapore executive director of research and consultancy Alan Cheong explained that such sites may be subject to land sales conditions that require regulatory approval.
However, this may not apply if the sale involves the company holding these stations, rather than the stations themselves.
As for potential buyers, Cheong suggested that another overseas oil and gas company is the most likely candidate. In 2009, Chinese oil giant PetroChina had acquired a 45.5 per cent stake in SPC for S$1.5 billion, before taking it private.
The future of service stations in Singapore’s EV era
The rise of EVs is reshaping the petrol station landscape.
Analysts told Reuters in May that global petrol demand growth could halve this year, potentially marking the slowest growth since 2020.
Bloomberg’s energy research service BloombergNEF also said in an August report last year that oil consumption displaced by EVs could rise to more than 20 million barrels per day by 2040.
In Singapore, electrified cars accounted for 80.9 per cent of new car registrations in the first half of 2024, with pure EVs making up for more than a third. The EV population also nearly doubled to 24,247 between January and November. Compared to the 6,531 EVs at the end of 2022, this was a more than 270 per cent increase.
This follows a strong push by the government towards EVs, as part of the nation’s efforts to achieve its net-zero emissions climate goal by 2050. There are subsidies incentivising drivers to opt for EVs, for instance, and the city-state’s EV infrastructure has expanded to support growing demand.
In a written response to a question that was raised in Parliament in January 2022, the Ministry of National Development (MND) noted that demand for petrol and diesel fuels is expected to fall as EV adoption rises.
“Some petrol stations have already adapted by installing EV chargers,” it said.
Repurposing the sites
Land use planning will also adapt to the changing needs of the fuel retail market and petrol stations, while ensuring that the needs of different types of vehicles are met, MND added. “Where needed, some petrol station sites may be rezoned upon their lease expiry, and redeveloped for alternative uses.”
Similarly, Knight Frank predicts a potential over-provision of petrol stations in the next 20 to 30 years. Land parcels averaging 22,000 square feet (sq ft) per station could gradually become available for repurposing.
“While 22,000 sq ft is not very substantial, spread over 180 stations all over Singapore, this represents about four million sq ft of land,” said Knight Frank.
“If only half of (them) become obsolete... this would mean that some two million sq ft of space could potentially be primed for repurposing,” the consultancy added.
Redesign, reuse and recycle
Knight Frank suggests that these sites could be repurposed as EV charging stations, maintaining a relatively similar function to their current use.
Since such sites tend to be relatively small, they could also be gazetted as remnant land – that is, parcels of state land that are too small or irregularly shaped to be developed independently, said Knight Frank.
These remnant plots can potentially be combined with adjacent land and put up for tender, the consultancy noted.
Knight Frank cited the petrol station at 355 Commonwealth Avenue as an example. With its lease set to expire in 2025, the site – located in one of Singapore’s oldest HDB estates – could be merged with nearby older HDB blocks once they are deemed obsolete and sold off, paving the way for redevelopment opportunities.
“(This could) enhance the practical use and economic value of the private land and the neighbourhood,” Knight Frank said.
A study by global sustainable development firm Arup and the National University of Singapore, published in July this year, also proposed that petrol stations can be converted into mixed-use developments, comprising commercial and office spaces, with EV charging stations.
This not only encourages integrated transport and land use planning, it also improves the area’s urban character, said the authors.
Alternatively, Knight Frank said these lots could be repurposed using shipping containers or double-decker buses for a variety of purposes – akin to the food and beverage container park at 30 Cosford Road, or The Bus Collective resort at Changi Village which repurposed old public buses into resort suites.
“(Such formats) where the real estate can be quickly converted to meet the needs of new human demands with the minimum of material consumption... would be the icing on the cake in the sustainability era,” said Knight Frank.
This will also help Singapore work its way towards “rethinking, redesigning, reducing, reusing and recycling for a circular economy”.
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