Petrol price chain letter

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#450977 23-Mar-2011 06:16

Kyanar:
timmmay: I have no problem with the high cost of fuel. It'll force more people onto public transport, which can only be a good thing.

Yup. Now they just have to do something about the high cost of public transport.

Problem is that public transport will only go up with higher fuel costs. It isn't free to run and in all areas in NZ is heavily subsidised by local councils. As costs go up there are two choices - increase rates to pay for this so all people pay more, even if they don't use public transport, or increase costs for end users.

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#450985 23-Mar-2011 07:47

timmmay: What a waste of time. Margins are slim AFAIK, it's what the crude costs plus the massive government taxes that make it expensive.

I have no problem with the high cost of fuel. It'll force more people onto public transport, which can only be a good thing.

This is exactly the point, there is no margin for movement. The concept relys on altering supply and demand. However demand wont change just where you buy it will. In effect that will mean dittily squat to the supply price as the "two big fuel companies" still have to pay the same price for crude they will just be supplying the market less.

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#450987 23-Mar-2011 08:12

itxtme:
timmmay: What a waste of time. Margins are slim AFAIK, it's what the crude costs plus the massive government taxes that make it expensive.

I have no problem with the high cost of fuel. It'll force more people onto public transport, which can only be a good thing.

This is exactly the point, there is no margin for movement. The concept relys on altering supply and demand. However demand wont change just where you buy it will. In effect that will mean dittily squat to the supply price as the "two big fuel companies" still have to pay the same price for crude they will just be supplying the market less.

If anything this concept would actually force the price up of petrol at other chains.

Here in the NZ the major players all own a share of the Marsden Point refinery, and commit to fuel volumes in advance based upon their market shares. Extra fuel requirements above this are imported already refined, and can cost significantly more than the cost of fuel refined in NZ.

If market shares in NZ were to significantly change overnight you'd find other chains facing fuel shortages and having to rely on imported fuel to meet this shortcoming, which would be at a higher cost, and probably force fuel prices up. The chain on the other hand that was boycotted will still have their NZ fuel and would be able to keep selling this at the same price.

old3eyes

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#451002 23-Mar-2011 08:53

NzBeagle:
Also, are not many petrol retailers independently owned and operated, and would this action not cause significant parallel damage to employees and part-timers?

This is my issue with these letters that get spread around. If you are putting a small corner station out of business, I doubt the Chain's will really mind, but think about the livelihood of those owners, who in a lot of cases struggle to make much off the fuel as it is. Hence in store groceries being pushed.

I haven't seen in the past few years any small corner stations here in Auckland. They're all owned and operated by the oil companies. Most small privately owned gas stations have closed and become other things..

Regards,

Old3eyes

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#451113 23-Mar-2011 13:14

old3eyes:
NzBeagle:
Also, are not many petrol retailers independently owned and operated, and would this action not cause significant parallel damage to employees and part-timers?

This is my issue with these letters that get spread around. If you are putting a small corner station out of business, I doubt the Chain's will really mind, but think about the livelihood of those owners, who in a lot of cases struggle to make much off the fuel as it is. Hence in store groceries being pushed.

I haven't seen in the past few years any small corner stations here in Auckland. They're all owned and operated by the oil companies. Most small privately owned gas stations have closed and become other things..

Not true. A very large portion of those are on the RORO (Retailer Owned, Retailer Operated) model. BP, Mobil, Shell, Gull, Caltex and GAS are franchises as well as chains.

Many stations may have the BP brand for example, but they are really "Bob and Jim's Fuel Services Ltd, trading as BP Somewhere Road" - Bob and Jim's Fuel Services has to buy all their product at wholesale from BP Oil, and then they add a (virtually nonexistent!) margin to it and resell it. Unfortunately for them, though, the retail price is fixed by contract to whatever Corporate says it is, which means that if they don't go through petrol very quickly, they could potentially buy petrol really expensive and have to resell it for less than they bought it if the price goes down. The Foodstuffs monopoly on wholesale food while being one half of the duopoly on retail food doesn't help (Foodstuffs owns Gilmours, Toops, Trents, Pak 'n Save, and New World) as it means the independent gas stations are also paying a fortune and a half on their in store items.

Also, the worst possible thing you can do to an independently owned gas station, is use a supermarket fuel voucher and not buy anything in store. When you do this, they ARE selling the petrol at a loss to them, but the franchise agreement says they must honour the voucher. Some smaller franchisees have been even been driven out of business by this requirement.

gzt

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#451148 23-Mar-2011 15:23

I get my gas from the automated pumps at pak-and-save. No queues (the way I plan it), no-one pushing 3 chocolate bars for $5 or whatever the alleged 'special' is.

Alternatively I go to a small and friendly family operated garage which offers none of the nonsense, and offers full service for anyone who wants it. Four meters from the pumps to the register. And, I buy more incidental items there.

Effectively taking away eftpos at the pump lost me as a customer from the major branded stations years ago.

In my view there is room for many different business models. The existing models are stale. Running an automated pump and offering additional car related services at the same location is the way to go. But there are vastly many, many more possibilities not being addressed.

Kyanar

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#451170 23-Mar-2011 16:29

gzt: I get my gas from the automated pumps at pak-and-save. No queues (the way I plan it), no-one pushing 3 chocolate bars for $5 or whatever the alleged 'special' is.

Alternatively I go to a small and friendly family operated garage which offers none of the nonsense, and offers full service for anyone who wants it. Four meters from the pumps to the register. And, I buy more incidental items there.

Effectively taking away eftpos at the pump lost me as a customer from the major branded stations years ago.

In my view there is room for many different business models. The existing models are stale. Running an automated pump and offering additional car related services at the same location is the way to go. But there are vastly many, many more possibilities not being addressed.

Isn't it amusing that the old business model the big chains and franchises abandoned is actually one of the more viable ones (full service)? So many people still value going to the gas station and having someone friendly pop over to fill up your gas, top up your windscreen wiper fluid or help you out putting air in the tyres, and say hello.

Admittedly, some of the chains/franchises are pretty good too. The station my sister goes to (a Mobil), the attendant sees her arriving, gives her a friendly wave, and unlocks the pump (even though it's Prepay).

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#451178 23-Mar-2011 16:53

Kyanar: Isn't it amusing that the old business model the big chains and franchises abandoned is actually one of the more viable ones (full service)? So many people still value going to the gas station and having someone friendly pop over to fill up your gas, top up your windscreen wiper fluid or help you out putting air in the tyres, and say hello.

How many will pay more for this though?

old3eyes

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#451198 23-Mar-2011 18:50

sbiddle:
Kyanar:
timmmay: I have no problem with the high cost of fuel. It'll force more people onto public transport, which can only be a good thing.

Yup. Now they just have to do something about the high cost of public transport.

Problem is that public transport will only go up with higher fuel costs. It isn't free to run and in all areas in NZ is heavily subsidised by local councils. As costs go up there are two choices - increase rates to pay for this so all people pay more, even if they don't use public transport, or increase costs for end users.

Don't you guys in Wellywood have a nice lot of electric trains and buses so how come the fares still keep going up.. Oil fired power stations in Wellington??

Regards,

Old3eyes

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#451207 23-Mar-2011 19:30

Kyanar:

Isn't it amusing that the old business model the big chains and franchises abandoned is actually one of the more viable ones (full service)? So many people still value going to the gas station and having someone friendly pop over to fill up your gas, top up your windscreen wiper fluid or help you out putting air in the tyres, and say hello.

Mobil in Waikanae, Bohanna Motors, still does this!

They make no extra, people pay no extra, but they are a local family business and people know that and get their fuel there out of loyalty.
Plus the fact they have a full workshop (where the money is).
Some customers/businesses go their even with fuelcards and often run the place out of diesel!
They now keep a portable tank filled just for that though.

tardtasticx

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#451209 23-Mar-2011 19:47

Gosh you guys are a bunch of whining nana's. Its just saying to go to a different petrol station. How hard is that? Go to Gull, they're cheaper by like 4c a litre, which is a lot in the long run, so you're saving money there, AND hopefully helping drive the cost down. We dont know if we dont try.

blakamin

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#451210 23-Mar-2011 19:50

Handy if the nearest gull wasn't 120ks away.

tardtasticx

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#451211 23-Mar-2011 19:52

blakamin: Handy if the nearest gull wasn't 120ks away.

Caltex? Shell? Even a tiny little family owned one. If not, still go to the big bp and that. No ones forcing you, it'd just be nice

itxtme

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#451257 23-Mar-2011 22:09

tardtasticx: Gosh you guys are a bunch of whining nana's. Its just saying to go to a different petrol station. How hard is that? We dont know if we dont try.

It wont work because it cant work. Someone sitting at their desk came up with it and thought the principal makes sence. But it fails to understand even the most simple rules of supply and demmand. We would be more likely to reduce oil prices if we collectively cuddled a tree - "How hard is that?" and how likely is it to work??

Kyanar

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#451282 24-Mar-2011 00:19

tardtasticx: Gosh you guys are a bunch of whining nana's. Its just saying to go to a different petrol station. How hard is that? Go to Gull, they're cheaper by like 4c a litre, which is a lot in the long run, so you're saving money there, AND hopefully helping drive the cost down. We dont know if we dont try.

We do know, and it won't work. That's the problem. There's little, if anything, that we can do to affect petrol prices. Half the cost (at least) is government taxes, and cuddling the tree will be more likely to give you free fuel than the government cut taxes (earthquake, earthquake, earthquake!) Petrol prices for the most part are mostly controlled by overseas crude prices, the aforementioned taxes, and a margin so slim that you could cut cheese with it. What the chain letter is saying is patently flawed.

Now, buying from Gull, who are often selling less than the competitors, as well as being a local company, I can agree with. It won't do anything for prices, but at least the money stays here.

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