By Sunoco LP, a leading fuel distributor, has announced its plans to invest over $200 million in organic growth. The majority of this investment will be dedicated to expanding its fuel distribution business and enhancing its 94 octane gasoline offering. In addition, the company aims to explore new markets to further expand its presence.
A careful analysis of Sunoco’s distribution network reveals that the most promising growth opportunities lie in the Upper Midwest, Rockies, and West Coast regions of the United States. Currently, Sunoco distributes approximately 8 billion gallons of fuel across more than 40 states and territories, serving over 10,000 retail and commercial accounts.
With a robust network of 42 product terminals and over 200 wholesale fuel terminals, Sunoco is well-positioned to meet the demands of its expanding customer base. By strategically leveraging its infrastructure, the company aims to distribute around 8.3 billion gallons of fuel in 2024, with an anticipated average wholesale margin of 12.5 cents per gallon.
Sunoco’s strong wholesale margins have been buoyed by market volatility and uncertainties, as well as limited domestic supply due to refinery shutdowns and increased overseas exports. This has given larger distributors like Sunoco a significant advantage over smaller operators with higher break-even margins.
Recognizing the potential for continued growth, Sunoco has invested more than $1.3 billion over the past three years. The company remains committed to pursuing organic expansion as well as acquisition opportunities in the foreseeable future.
To support its growth initiatives, Sunoco has allocated a budget range of $560 million to $570 million for total operating expenses. Additionally, approximately $70 million has been earmarked for maintenance capital.
Sunoco’s financial guidance for the coming year also includes an estimated adjusted EBITDA range of $975 million to $1 billion, reflecting its commitment to sustainable long-term growth.
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