Why Are Low-Cost Petrol Stations So Cheap?

Low-cost petrol stations can offer cheaper prices than major brand stations (such as Repsol, BP, Shell, etc.) due to a business model focused on minimising operational and structural costs.

The most evident feature is the absence or drastic reduction of staff. Most of these stations operate under a pure self-service model, where the customer handles the entire refuelling and payment process (often through an automatic terminal or mobile app). This eliminates salary, social security, and training costs associated with cashiers or forecourt staff.

A second factor is their location in areas with cheaper rents, such as industrial estates, city outskirts, or areas with lower population density, avoiding premium locations on main avenues or central zones.

They typically lack additional services offered by traditional petrol stations, such as shops, cafes, car washes, workshops, etc., significantly reducing maintenance, inventory, and staff costs associated with these services.

Their facilities are usually simpler and more functional, with lower construction, maintenance, and equipment costs than large service stations with more elaborate infrastructures.

Another factor is their operation with tighter profit margins per litre. To compensate for this lower margin, their strategy is to sell a very high volume of fuel. Being cheaper, they attract more customers looking to save, allowing them to maintain profitability through volume.

An example is Ballenoil, which leads in Spain in the automatic service station sector with over 315 operational petrol stations in Spain. It ranks among the most economical fuel brands in Spain thanks to a cost strategy that, according to its managers, "relies on service automation, internal process digitalisation, and direct supply control." This model, they claim, allows them to adjust prices daily and position themselves among the stations with the most competitive rates in the market, according to data from the Ministry for Ecological Transition's Fuel Price Geoportal.

This official portal notes that Ballenoil is among the options with the lowest prices in dozens of provinces. In Madrid, for example, it lists diesel A at €1.149/l (Camino San Martín de la Vega) and 95 E5 Premium petrol at €1.289/l (Avenida de Andalucía). In Barcelona, it stands out for its offer of Premium diesel at €1.185/l (Calle Córdoba). Also in Valencia, the company offers 95 E5 Premium petrol at €1.305/l (Calle Burjassot).

This trend extends to provinces such as Seville, Murcia, Toledo, Granada, Cádiz, Badajoz, Valladolid, Huesca, Cantabria, Palencia, or Jaén. Price differences compared to other traditional service stations can exceed 30 cents per litre in cities like Madrid, where 95 petrol reaches €1.63/l in some cases. In Barcelona, the gap between stations can reach 25 cents, according to Geoportal records.

The search for more competitive prices leads many drivers to low-cost petrol stations, raising a recurring question: Is cheaper fuel of lower quality? The answer is clear: the base fuel we refuel is the same at all petrol stations in Spain, regardless of brand or price.

The sector has confirmed that petrol and diesel, the "base" fuel, come from the same refineries and are distributed through the same unified logistics network (mainly operated by Exolum, formerly CLH). This ensures that all fuel meets the strict quality and safety standards required by Spanish and European legislation.

The fundamental distinction lies in the additives. Major oil companies invest in developing and adding specific additive packages that promise extra benefits: improving engine performance, prolonging its lifespan, optimising consumption, or reducing emissions.

In contrast, low-cost petrol stations usually sell the base fuel without these premium additives or only with the basic additives already incorporated by the distributor at the source. This strategy allows them to significantly reduce operational costs by dispensing with large investments in marketing, staff, or additional services like shops or car washes. By minimising these structural expenses, they can offer lower prices per litre, maintaining profitability through higher sales volume.