Yes, this is exactly how the Shell app works.
The Shell app only uses your Location Services when the app is running on your mobile device.
However, without your permission to use Location Services, the app won't work to it's full potential, including use of Pay at Pump and Find Nearest Station as we can not determine your specific location.
To allow access to Location Services on your mobile device go to:
Settings, select 'Location Services' , select the Shell app, click on While Using the App.