Spotlight 37
“We have to be careful that consumers are given the correct information,” said David Blevings, spokesman for the Northern Ireland Oil Federation (NIOF), in response to the launch of the Crumlin Oil Club
Unrealistic savings
“The club’s publication refers to some GB schemes saving participants between three and 6ppl; this maybe the case in GB, but with a highly competitive local market in Northern Ireland, where 275 distributors supply around 500,000 homes, these savings are frankly not realistic. Reviewing the Fuel Oil News Price Totem the actual distributor margin in Northern Ireland is somewhere between 2 and 4ppl – the saving’s just not there.
“Many oil clubs are making comparisons based on the £1 plus per litre for a 20-litre oil drum, which includes the drum’s cost. Consumers have moved past buying drums; most households will have procured two or three drums which they use to fill up at the forecourt kerosene pump. Over the last two years, the biggest growth in kerosene has been at the pump; in rural areas the majority of retail sites now sport one.
For emergency use only
“The growth in the drum business is a concern; there are clear health & safety issues when carrying kerosene in cars, and there’s potential for environmental contamination from drips/spillages as it’s poured into the household tank.
“Small oil drums are for emergency use only. They should provide a small amount of oil – often in an out of hours run out situation – allowing the householder to heat their home until a distributor can visit the next day. They’re not promoted as a method for heating a family home and we continue to discourage consumers from using them, except in an emergency.
“We’re convinced that the future for oil consumers is a viable pay as you go system similar to that operated for gas and electricity. Along with OFTEC we continue to lobby minister McCausland to introduce the new technology that has already been developed locally by Kingspan and Carillion.
Prepare ahead for winter – ensure your customers know what payment terms you offer
“In this difficult economic period, NIOF is only too aware of the impact increased energy costs have on consumers. We’re not against oil clubs per se, but consumers should be given the correct information on potential savings.
“As a responsible industry, numerous products are already offered to help consumers budget for annual fuel requirements. Putting money aside each week into a budget payment scheme such as PayPoint and Council stamp schemes, can deliver all oil requirements over the winter period. Most distributors will accept direct debits and many operate their own savings schemes. These schemes are ideal as the consumer can build up credit and/or budget to buy a more economical amount of oil and control their fuel spend.”
Planning ahead of winter, distributors should ensure that customers are frequently reminded as to the options available.
Phillips 66 has further strengthened its commitment to UK fuel sales, appointing Tony Reddington as national sales manager for its UK & Ireland marketing division.
In his new role, Tony will be 100% customer-focused, targeting new customers and strengthening existing relationships with supermarkets and high volume resellers and dealers throughout the UK and Ireland. He will take responsibility for the development of the company’s speciality fuel businesses – marine, aviation and LPG.
Since joining the company in 1987, Tony has held a number of roles across its upstream, downstream and corporate divisions, with a particular specialism in finance.
Pete George, the company’s managing director UK & Ireland marketing, commented: “Tony has extensive experience of our business and our brand, as well as an in-depth understanding of the UK and Ireland’s fuel market. He is well-placed to take on the challenge of increasing our market share, identifying new opportunities and developing our customer base across all of our fuel products.” www.phillips66.co.uk
Brian Worrall, DODF chair and Marisa Ferguson, contracts manager, SQA, at the signing of the PDP agreement
The UK’s first Petroleum Driver Passport (PDP) has moved a step closer to completion with hauliers and training providers being invited to gain approval to deliver the necessary training and assessment.
Hauliers and training providers are now able to apply to Scottish Qualifications Authority (SQA) to become PDP approved centres, enabling them to carry out some or all of the required training and assessment.
The scheme will be open for driver training from January 2014. During 2014 all drivers must be trained and pass the associated assessments before being issued with the PDP card. Terminals will begin mandating the scheme from January 2015.
Training providers can register to undertake all activities, classroom and practical, on a five year and annual refresher basis whilst others may opt to conduct their own annual refresher, practical or classroom training. Some operators may choose to undertake the practical assessments for themselves and others, leaving the classroom elements to third party providers.
Brian Worrall, Downstream Oil Distribution Forum (DODF) independent chair, said: “The implementation of the PDP is progressing well and we are inviting companies to register with SQA as training providers so that we are in a position to begin driver training in January 2014. By implementing PDP, the industry can have confidence that drivers have been trained to a consistently high, externally verified standard in all aspects of tanker driving, from pre-vehicle checks to loading, driving and discharging.”
Secretary of state, Ed Davey added: “Government is supporting the PDP scheme which will improve standards and the quality of training across the industry. We would encourage all training providers to sign up to delivering this new qualification.”
Sue Macfarlane, head of specialist awards and services at SQA, said: “We are delighted to be working with the DODF. I believe SQA’s considerable experience of developing, assessing and quality assuring qualifications relating to the transport of dangerous goods means we can be trusted by the industry to help demonstrate drivers’ skills and knowledge of relevant safety procedures to terminal operators, customers and the public.”
Killybegs – where Donegal has a depot
Some lucky decisions and a keen share of the marine and lubricant markets have helped give one distributor a positive outlook in recession, writes Irish correspondent, Aine Faherty.
“All markets are contracting but we’re maintaining our own and growing market share where we can,” says Arthur McMahon, managing director of the Letterkenny-based Donegal Oil Company.
In the last two years, the company’s lubricants sector has seen growth treble as great strides were made in gaining market share.
The marine industry is also an important component with business from the fisheries and exploration industries in both winter and summer. The exploration industry is serviced from the port of Killybegs, where Donegal also has a depot. If oil exploration develops further off the west coast of Ireland – something largely determined by global oil prices – Arthur is hopeful there will be a beneficial knock-on effect on his business.
Presently, the company, which was formed by Arthur’s grandfather in 1954, operates in four areas with its core being home heating oil, delivered countywide from Falcarragh to the north and Killybegs in the south. The company also supplies diesel to agricultural, commercial and small retail customers. There are 30 full-time staff and 15 tankers, ranging from mini-tankers to full articulated trucks.
Now with his grandfather, father and brother Barry acting as non-executive directors, Arthur is the first McMahon to have a hands on role as managing director. Firmly in the driving seat, he looks to the future with positivity.
“When everyone else was getting bigger, we didn’t join them,” he said. He recalls how the company sold two filling stations in 2006 and 2007. “Good business decisions on our part which I would best describe as ‘lucky’ now. Thankfully we’ve no big legacy of debt and we’re happy enough with business, at the moment.” Many of Donegal’s customers and suppliers are, however, under pressure from the banks. “This constitutes a bit of a squeeze on everything and costs are controlled accordingly,” he added.Maintaining a good reputation
The Donegal Oil Company has a strong association with Topaz – a brand Arthur says is synonymous with quality. Although cheaper options for oil are available, he believes that people appreciate brands they can trust.
Acknowledging the substantial amount of illicit home-heating practices around, with cross-border smuggling and laundering operations in full swing, Arthur admits such activity is “very frustrating” for legitimate players. To remain disassociated with such practices and to keep reputation intact, the company supplies a number of small rural filling stations on an on-going basis. “This needs to be all or nothing. We’re not willing to share business,” he says explaining that if its brand were to be seen at a station which was also being supplied in the middle of the night by another lorry, this would have a detrimental effect on business. “A good reputation in business is next to impossible to claw back.”
Celebrating 20 years in business, Jerry Cosgrave and Leon Byrne beside McConville Oil’s tanker
McConville Oil is run by Jerry Cosgrave who took over the business from his father-in-law Dermot McConville eight years ago in what was a very different operating time
“It was push, push, sell, sell and no-one worried about credit,” he says. In such busy times Jerry could have put another tanker on the road but now he is very glad that he did not opt for expansion. “I would be carrying significantly more overheads in a market where volumes have almost halved and there is little or no consumer confidence,” he told Irish correspondent, Aine Faherty.
McConville Oil operates just one tanker bought in 2007, which Jerry drives in addition to taking all the orders on the road, backed up by Leon Byrne, a part-time administrator in the office. In operation for 12 years, prior to Jerry’s acquisition McConville Oil had developed a reputation for reliability so he retained the name and secured a contract with Top Oil.
The bulk of business is done within a 12-mile radius of its Graiguenamanagh base in Co Kilkenny where domestic home heating oil is the main seller throughout the winter months. Over summer where once there was some road diesel business from construction accounts, Jerry now relies solely on the farming industry and might just work on the basis of a three-day week spread over five or six days. Although rewards are not massive, Dermot reports a good living which he is very happy with.
A few years ago tanks were installed in the yard and investment was made in a bottom loading skid. Now, while there are no capital spending projects in the pipeline, it is hoped that temperature compensation probes will be installed in his lorry before September. At a cost of €700 to fit, it could give a saving of €4,000 to €5,000 per year. In the future, Jerry also hopes to utilise a mobile fuel management system if a cost effective solution for the small operator is available; presently outlay for software would not be feasible.
Since January, like all oil distributors, he has adhered to strict revenue reporting guidelines on the movement of oil. Initially quite a challenge, Jerry now says that despite the extra paperwork involved, it enables him to keep a tighter control on stock movements. He does, however, remain to be convinced that this will meet its intended purpose, to grind fuel laundering practices to a halt.
As many quit giving people credit, Jerry still extends credit to his oldest customers as a form of goodwill for their continued custom. Burned by big players, he has entered into payback plans; one owing a large sum is repaying at the rate of €100 per month. “It’s better than fighting with them,” he says.
Jerry feels the future of oil is fairly secure, “especially in rural areas where gas is still not an option. Unless it becomes much more expensive, which I think is unlikely. “Most people would revert back to oil if it cost €1000 for 600 to 700 litres, which is about 20% cheaper than it currently is in Ireland. “And I think it could happen,” he says optimistically.
Royal warrant holder, Linton Fuel Oils recently took part in the Coronation Festival at Buckingham Palace.
Marking the 60th anniversary of the Queen’s Coronation, the event, which took place from 11th-14th July, was an opportunity for royal warrant holders to showcase their business and its products and for the country to celebrate its ‘tradition, innovation and excellence.’
“We were obviously very proud to be involved in the Coronation Festival,” said Russell Mortimer, marketing manager. “Although it wasn’t very easy for Linton to display and demonstrate its products, we were very pleased to take part in the hub area, where we were able to have a display.”
Following the recent acquisition by World Fuel Services, both the previous owners and directors of Linton, along with members of the World Fuel Services management team attended an evening gala. Several other members of staff attended the Coronation Festival in the day time.
www.coronationfestival.com
The Basingstoke to Paris team in Airport Energy sponsored shirts
A little saddle sore with a strained Achilles and very tired after his ‘little cycling challenge,’ Airport Energy’s operations manager Craig Heggie got back to work.
Every couple of years Craig sets himself a ‘crazy challenge’ to raise money for the Sebastian’s Action Trust. “It’s an amazing charity that I and some of you have supported since 2006,” said Craig. http://sebastiansactiontrust.org/about_us/our_film.php.
Earlier this month, a team of 10 set out to cycle 700 miles from Basingstoke to Paris and back again in just 5 days. Craig’s bike was fitted with a tracker so supporters, friends and family could follow the team’s progress live online. Using social media to best advantage, the team had a Facebook page and could also be viewed on Youtube at https://www.youtube.com/watch?v=0oSoXOI3TkY.
“The whole week became a bigger challenge then we expected,” Craig told Fuel Oil News. “We had everything thrown at us – head winds, an 8 mile hill, 15 punctures, two broken spokes, thunder and rain.”
Seven out of the 10 completed the challenge in 4 days, 13 hours and 40 minutes with a average of 140 miles a day and to 15 hours a day in the saddle.
“On the plus side cycling down the Champs Elysées from the Arc de Triomphe was an amazing experience and, to date we’ve raised just over £9000, so a massive thanks to all those who supported us.
“If anyone wishes to personally sponsor me post event, please follow the link to my just giving page http://www.justgiving.com/CraigB2P2B
Corrib Oil once again sponsored the annual Tour de Lough Corrib in Connemara with money raised beating last year’s €50,000.
Organised by the heart and stroke charity Croi, this year’s event raised €72,405 for the West of Ireland’s Cardiac Foundation. The event, which is in its 18th year, has been sponsored by Corrib Oil since its inception.
This year saw over 900 cyclists taking part, including cycling legend Sean Kelly who once again completed the tour and rallied his fellow cyclists who followed a 27.5 or 75 mile route.
From its strategically located depot network, Corrib Oil delivers heating oil to Counties Cavan, Clare, Galway, Laois, Leitrim, Limerick, Longford, Offaly, Mayo, Roscommon, Tipperary and Westmeath in a modern fleet of over 60 fuel tankers.
www.corriboil.com
In support of the Armed Forces, Simon Storage terminal manager at Immingham West, Clive Hewins
Clive Hewins, terminal manager at Simon Storage’s Immingham West terminal spent a day in uniform in support of Uniform to Work Day last month.
Managing director, Jordan Ingoe, shows off the company’s new 14,000 litre tanker. Photo supplied by Jonathan Farber
Rochdale-based Ingoe Oils attracted new business at the Cheshire Show last month.
Irish correspondent Aine Faherty with David Blevings, Northern Ireland Oil Federation at the recent Fuel Oil News Distributor Debate held in Templepatrick in March
The number of operators selling washed diesel and taking business from legitimate dealers continues to affect the industry
The low rate of convictions in Northern Ireland was recently raised by politician and TUV leader Jim Allister, where there have been just 17 convictions in the last four years, with little or no fines and prison sentencing imposed.
“This gives out all the wrong signals to the perpetrators,” said a Craigavon-based distributor. “Laundering fuel is the equivalent of stealing, and it damages vehicles, so it should carry a heavy penalty. As soon as one place is closed down, within a short time the same operators are carrying on regardless from a different, albeit close location.” The distributor, who wished to remain anonymous, was unaware that penalties were so low.
At the Northern Ireland Oil Federation, the message is clear. “If there’s known fuel abuse in an area, it impacts on business. It’s in everyone’s interest to report it and tackle the situation. After all, this fuel abuse is a real threat to legitimate business and damages the industry’s reputation.”The need to keep one step ahead with a more robust fuel marker
Most recently published figures by HM Revenue and Customs (HMRC) indicate that within the last year, officers dismantled 24 laundering plants and arrested 7 individuals for fuel fraud offences.
“We’re not complacent and appreciate the need to keep one step ahead of fuel launderers,” commented an HMRC spokesperson. “Consequently, the search for an even more robust marker capable of foiling 21st century fuel launderers is essential to ensure that opportunities for fraudsters to exploit fuel supplies are reduced and illicit fuel can be detected.”
In a joint initiative between the Republic of Ireland and the UK submissions for a new fuel marker suitable for use in both jurisdictions have been invited.
“HMRC is responsible for investigating suspected excise fraud and reporting cases to the public prosecution service. When we detect those engaged in the illicit supply chain or commercial scale misuse of fuel, we also have a range of sanctions at our disposal. These range from seizure of assets, civil recovery of taxes evaded to prosecution. Sentencing is a matter for the judiciary; a review of which is being carried out by the lord chief justice.”
Designed to boost the oil heating industry, the Oilsave campaign is a joint initiative between OFTEC and the Federation of Petroleum Suppliers. Should the two organisations do more together?
Brian Allerton, WCF
In recent times, FPS and OFTEC seem to have been working more closely together and I think this has been to the betterment of the industry. Closer communication must make for a better understanding of each other’s aims and aspirations. After all, we’re all working towards the same goals.”
Mark Askew, FPS
“It’s important that those who represent all aspects of our sector should have the ability to work together in a constructive way, within areas of mutual interest.
“Over recent times the FPS has worked hard to develop good working relationships with its partners in the sector and is currently working on the Oilsave campaign with OFTEC. We’ve also worked with OFTEC on other joint initiatives and will continue to seek ways in which we can operate together to support the industry which we serve.
“We’re already working closer together than we have for some time and are in regular communications at all levels. We also meet to discuss how the relationship is developing and to see if there are other areas in which we can co-operate.”
Derek Wallace, Carrs Billington
“As both organisations are oil related, it certainly makes sense for them to move closer together.”
Jeremy Hawksley, OFTEC
“OFTEC and FPS already work closely together, most notably on our joint marketing campaign, Oilsave, where we are promoting the benefits of oil heating to consumers and working hard to defend our industry – with the support of many others from within our sector.
“Our members share many goals, particularly around the need for a strong and sustainable industry. For this reason, we’ll continue to explore opportunities to work together now and in the future.
“However, while we share many interests we serve different groups with different needs within the oil heating sector. OFTEC believes those interests are best served by having two independent trade associations to focus on and champion the particular needs of their members.”
Mark Nolan, Nolan Oils
“I think the two organisations should work more closely. We’re both representing the same trade, so I think only good can come of working together.” (Mark Nolan was inaugurated as FPS president last month, his tenure of office will be two years)
Being proactive rather than reactive was one of the really strong messages conveyed to an audience of over 60 fuel oil distribution staff who attended last month’s Fuel Oil News Distributor Debate in Northern Ireland, writes Irish correspondent, Aine Faherty
Distributors from north and south of Ireland attended the event in Templepatrick, where much emphasis was placed on the promotion of oil as a viable, trustworthy and efficient fuel and heating solution.
“Everyone needs to make a concerted effort to push oil and to improve the view people have of the industry,” said Mark Askew, chief executive of the Federation of Petroleum Suppliers and first speaker. Highlighting the very important role drivers have as the industry’s PR men, a view endorsed by David Meekin of Meekin Fuels, Mark said: “We must carry the right message and the right image to the consumer by way of proper and up-to-date driver training.”
Although oil has undergone a long period of instability over the last eight years, BP’s Angus Fraser assured delegates that, despite exiting refining, the oil major remains committed to the Northern Ireland market. Stressing the importance of strong, long-term relationships, he said BP strove to pass on the best possible price to customers and that high quality products and a reliable source of supply – even when stock is low – remained the company’s invaluable strengths.
“Most people hate to change software,” said Fuelsoft’s David Kingsman. “Thinking it’s a case of the better the devil you know. However, putting up with short term pain to change systems and learn new work practices, could reap rewards long term. A well-rounded integrated system links telephone and computer, meaning orders can be taken and monitored more easily and backed up by a 3D secure website for payments.
In feedback, many attendees found the fuel quality presentation given by chemist Julia Mansfield of Fuel Science Additive Technologies provided great insight into reasons behind fuel’s variable quality. An issue of particular relevance to Ireland, which imports 80% of its fuel requirements, and where the closure of Whitegate, the country’s only refinery, is expected in the near future.
Initially painting a dim picture for the home heating oil distributor, David Blevings, Northern Ireland Oil Federation said average profit for such a business was less than 2% of turnover. In March 2009, 900 litres of kerosene was £300 cheaper than it is today; add this to the fact that solid fuel and gas are considerably cheaper and ”it’s easy to see why people are choosing to go elsewhere,” he said.
Remedy – show your customer you’re here to help – a condensing oil boiler could save 20% on fuel costs – form a partnership with an oil installer and offer a fixed contract and a budget plan. “A customer upgrading to a modern condensing boiler will be a customer for another 20 years.”
Tom Noonan – Maxol is concentrating on the retail side of its business, having condensed its distribution arm in recent years
Following Maxol’s announcement that it plans to invest 50 million euros expanding its all-Ireland service station network and rebranding its image, Irish correspondent Aine Faherty spoke to chief executive, Tom Noonan about the company’s move from loss to profit-making
In the news lately for all the right reasons, the Maxol Group has bucked the recession trend and experienced a €60 million turnaround in its net cash position, from minus €41 million at the end of 2005 to a net cash position of +€18 million at the end of 2011.A rise in retail
In January, Maxol unveiled a new forecourt identity and a five-year business development plan involving a €50 million investment to expand and upgrade its retail business. According to chief executive Tom Noonan, this should have a very positive impact on the overall image. “Good looking service stations are the best form of advertising we have, they help to reinforce a brand in which the consumer can have faith.”
Whilst the company has interests in three other distinct areas – fuel cards, distribution and lubricants, Mr Noonan explained that retail had proved to be the most lucrative area in recent times.A fall in distribution
At present, distribution arm, Maxol Direct forms a modest portion of the business, down from over 40 businesses at its peak to less than 20 now. At one point the group, which had an annual turnover of €700 million in 2011, worked off the model of having one distributor per county across the island – a model that would be nowhere near feasible today with high costs and reduced working capital.
Following a shake-up of the business in the mid 2000s, the company decided to undergo “enormous rationalisation” and divested itself of many distribution businesses around Ireland, some of which had only been acquired a few years previously.
At the time, Maxol had begun to notice a slowdown in the fuel market and recognised that property prices had peaked. Home heat was considered too risky with an economic slow down imminent and encroaching competition from gas and solid fuel. With a shorter winter season, that spanned just three to four months, there was concern that its large team of drivers and vehicles would be left idle for the greatest part of the year. And so the decisive downsizing action, which has proved invaluable, was taken.
For those businesses that have survived in this difficult sector until now, Tom believes they are in a strong position to move forward. In order to do this, he says that people need to make sure their business is as efficient as possible and realise that cash is not everything. However, managing cash flow and having a balanced portfolio is of utmost importance with a greater need than ever to keep the fleet moving.
“In the downtime of the year, oil distributors need to look to the commercial market,” he says for businesses such as hauliers, pubs and other industries that carry on steadily enough throughout the year.
“The bottom line is that the industry has changed – domestic customers are using remarkably less oil and businesses in general are watching their pockets. The key to survival therefore is making big decisions fast in a bid to stay afloat.”
With heating oil consumption already in decline in Northern Ireland, plans to extend the gas network are not a welcome development to distributors already under pressure reports Irish correspondent, Aine Faherty. Market share peaked in 2005 with 75% of households using heating oil; reduced to 68% in 2009.
Speaking at the company’s base 20 miles from the urban Belfast centre, Ken Hylands, managing director, Hylands Fuels, recalled the impact of a similar gas expansion in Belfast and surrounding areas.
“We just had to adapt in advance,” said Ken. “I would advise businesses in targeted areas (see box right) to do the same and be prepared. The secret is to continue providing a service at a competitive price and to ensure customers remain loyal to a product they still want. Nowadays customers just want to pay for what they can afford, so it’s important to have easy payment options with credit card, direct debit and standing order options.
In Ken’s experience, customers may not opt for gas, even when available, preferring to stick to what they know best. “Some may not have the option to switch; a majority of homes on an estate/road must opt for change before the high cost of running a pipeline into the area is warranted.”
Expansion is due to start in 2015, north and north west towns under consideration include Dungannon, Cookstown, Magherafelt, Coalisland, Omagh, Enniskillen/Derrylin and Strabane. Hillsborough, Ballynahinch, Downpatrick, Saintfield and Crossgar are being considered in County Down.
Not overly concerned is Malcolm Hill, business development manager with Solo Petroleum and AH Fuels which has most business in rural County Tyrone. Whilst Malcolm is confident that as a long established business, customers will remain happy with oil, he is concerned about the knock-on effect on ‘an oversubscribed fuel business.’
“Any increase in gas coverage will have a detrimental effect on the oil business, pushing its customer base away from the inner city/towns and into the more rural areas,” reported Michael Strain, general manager, Topaz Direct.
Gas is already in the main towns in which Kelly Fuels operates. “It will just be another competitor and we’ll have to deal with it,” said Derek McAuley. He likens the presence of gas to the new competition posed by the selling of home heating oil on forecourts.
The Northern Ireland Oil Federation (NIOF) has little doubt that the extension will go ahead as planned with oil customers targeted to switch. “This represents a real threat,” said David Blevings, NIOF executive director.
However, David did point out that the Northern Ireland Housing Executive (NIHE), which currently manages 90,000 social housing dwellings, may not hurry to changeover, despite gas being its preferred fuel. “With oil boilers only installed at many of these dwellings in recent years, these boilers are not at the end of their useful life so I anticipate gas conversion rates will take awhile. Whilst this is good news in the short term, we really do need to sit up and take notice of impending changes.
“We need to lobby direct store delivery (DSD) to support and introduce the Kingspan/Carillion Pay As You Go system to public sector housing and others that will allow oil to compete on a level playing field.
“If the oil sector is to retain a healthy market share it needs to think long term about the services it offers to the customer and become an energy provider offering energy services, not just oil.”
A recent report by the Fuel Poverty Action Group has called on fuel oil distributors to establish a priority register* for vulnerable customers
James Owen, S Owen and Sons, Shropshire
“We’ve noticed that many of our customers are ordering smaller quantities of oil as they’re struggling to pay for larger deliveries. We do have a lot of elderly customers who prefer to pay cash on delivery and we’re happy to accommodate them. Although we don’t advertise this fact, if a customer were to come to us and ask for £100 or £200 worth of fuel, we would do it as it spreads the cost for them and also means that we get paid on time.”
Kevin Bennetts, Consols Oils, Cornwall
“We always keep an eye open for vulnerable customers potentially in fuel poverty and do as much as we can to assist them which may, on occasions, mean a relaxation of very tight credit terms to accommodate them. We also actively encourage cash-strapped customers who are able, to come to the yard with four or five cans and fill them at a sensible price so that they purchase fuel in bite size chunks rather that incur a much larger bill for a bulk delivery that overwhelms their budget. As a result kerosene sales from the yard have increased considerably.”
John Cooper, Stevenage Oils, Hertfordshire
“As a smaller company we have a long relationship history with many of our customers, particularly our older and more vulnerable ones and we do try to be as flexible as we can with them.”
John Roberts, White Rose Fuels, Yorkshire
“Whilst we don’t have anything specific in place for our more vulnerable customers, we do offer all of our customers the option to spread payments across the year, using our budget payment plan. We’ve also done the odd emergency delivery for our longer standing, more vulnerable customers. We have one or two nursing homes on our books; they’re extremely loyal customers and we would always endeavour to get out to them quickly if the need arose.”
Robert Taylor, Butler Fuels
“Yes, an online service can offer benefits in that customers can place orders and email us with any queries, whenever it suits them.
However, we do believe that even though many customers may choose to order online, there’ll always be a large number who’ll continue to prefer to use the phone.”
Helen Needham, Hingley & Callow
“Huge benefits I would say – given the amount of abuse we’re currently taking from those customers foolish enough not to have remembered to check their fuel tank. Oh to be at the end of a computer rather than a phone line!
“On a serious note, while an online sales channel would undoubtedly have cost saving benefits, we would be concerned that we’d lose the personal touch we’re able to offer as a family business. We like to nurture the customer relationship and hope that some customers still appreciate the banter!”
Chris Bingham, Craggs Energy
“It’s a small number of people buying online presently but – it’s growing significantly. We’ve a band of customers who only buy online. If you don’t have the facility, you can’t blame customers for buying online somewhere else.
“I understand the rationale behind wanting to protect prices from competitors, but customers want to buy online which is leading to the growing presence of third party sites.
These sites are not owned by oil companies, they’ve no interest in the industry, no investments made and no personal risk. If we’re not careful, in the medium term – between one and 5 years – current distributors will be excluded from this sales channel, becoming simply hauliers in a world that’s all about who can ship fuel for the lowest price.”
Richard Burton, Barton Petroleum
“There are definitely benefits for those distributors choosing to offer an online sales channel. It’s my view that you can’t afford not to have an online route to market. Increasingly there are customers who will only transact online, and this group of customers will inevitably grow.”
Grant Lockie, Johnston Oils
“Whilst a high percentage of our orders are through traditional channels such as the phone or our sales team, we offer online ordering as well to facilitate an increasing demand.”
Jo Ritzema, WCF Fuels
“An online sales channel offers additional choice for consumers in how they buy their oil, in particular for those who wish to make their purchase outside of normal working hours.”
Out on the road – Pete, Lindsey and Guy at Old Trafford
A few months after the Conoco Phillips demerger to create a business dedicated solely to its downstream operations, Phillips 66 took to the road in a uniquely branded bus to do what it does best – talking, and building customer relationships
Over 200 dealers and distributors turned up to the Phillips 66 roadshow at exciting locations across the country, to take a seat in the specially designed double-decker bus, talk to members of the team, and learn more about the company after its introduction to the UK market earlier this year.
It was a whirlwind journey around the UK, designed to allow as many customers to attend as possible. The dual-branded Phillips 66 and JET bus visited eight iconic venues, including the Falkirk Wheel, Bristol Planetarium, Twickenham and the Imperial War Museum. Fuel Oil News joined in the fun at the last event at Old Trafford football stadium, for a chat about the benefits of the recent reorganisation, and a peek into the Phillips 66 future.A seamless split
“Looking back at the demerger, it has appeared seamless – but there has been a lot of work from those behind the scenes in the organisation,” said Pete George, managing director, UK and Ireland marketing.
Lindsey Grant, manager, national sales, added: “The roadshow has been about showing that although operations are under a new name, we still have the same culture, mind-set and strengths. The name has changed, but we haven’t changed who we are.
“Our objectives from the outset were to introduce customers to our team and highlight our new customer-centric structure and approach. It was also just as important for us to get feedback from customers and find out more about their needs directly from them. We feel that we have achieved this and more.”
Phillips 66 was introduced in the UK in May this year, when the downstream business split from the ConocoPhillips name to create two independently operated companies. As a result, Phillips 66 focuses on downstream refining, marketing operations and trading in the UK, while also continuing to market its fuel brand as JET. The move also included a company restructure, involving the creation of a separate national sales team, led by Lindsey, to look after UK-wide brands, such as GB Oils and Watson Petroleum. Independents with a regional base are now looked after by Guy Pulham, manager, regional sales, and a team of regional managers.Distributor benefits
“We have introduced a number of changes during the reorganisation to further support our distributors. For example, regional account co-ordinators have been introduced to be on hand for customers when a member of the sales team is on the road or unavailable,” said Guy. “A new online system has also been installed at Bramhall, Immingham and Kingsbury which calculates the daily amount of fuel a distributor has lifted. If needed, they can request to lift additional product, meaning no wasted journeys.
“The service we provide for each customer depends on the type and level of support they require,” added Lindsey. “Whereas national customers need a UK outlook, regional customers now have a contact within their local area to match the needs of their business. Matching technology and different planning strategies are also tailored for each customer.
“The reorganisation addresses the way the industry is heading, and means Phillips 66 is at the forefront for the benefit of our customers,” said Lindsey.
Busy ensuring that the split and restructure was as smooth as possible for customers, the company has been less vocal than usual. The roadshow presented the perfect opportunity to show customers that it’s business as usual and shout about the benefits of the structural changes.
“We’ve seen a lot of people and it’s been a lot of fun,” Lindsey continued. “Our biggest strength is our service focus and the relationships we have with our customers, so the bus acted as the ideal mobile venue for us to talk informally to people in a friendly and relaxed atmosphere.”Culture of success
The company recognises its culture as one of its core strengths, emphasised by the name change to Phillips 66 – which has been one of the leading fuel brand names in the United States for decades.
“The Phillips 66 culture is very family oriented,” explained Pete George. “Our values of safety, honour and commitment are a perfect fit with the UK business.
“We like to think we have a different approach. We listen to our customers and they have almost unlimited access to us – most have got my mobile number. We’ve got a very responsive and energetic team who don’t have to answer calls at 10pm, but they want to. You can’t buy that culture, you have to create it.”
Pete was planning to retire later this year, but accepted his new position as part of the reorganisation and has no regrets about continuing.
“It didn’t take a lot to persuade me to stay on after the restructure. I love the unique culture of the company, which was shown at its best throughout the roadshow. It’s a breath of fresh air in a corporate world.”An earlier interview with Pete George was published on page 6 of the September 2012 issue of Fuel Oil News.
Due to be launched on 1st January 2014, the scheme manager for the Petroleum Driver Passport (PDP) is the Scottish Qualifications Authority (SQA).
The scheme manager appointment follows a tendering exercise which saw SQA meet the quality and delivery requirements set by the UK Downstream Oil Distribution Forum (DODF).
Brian Worrall, DODF independent chair welcomed the appointment: “We continue to make rapid progress towards the launch of the PDP. SQA bring valuable experience and expertise which will ensure the quality and credibility of the PDP.
Detailed work is now underway to ensure that the PDP will be launched on schedule. The PDP will give assurance to fuel terminal operators, customers and the wider public that all tanker drivers have a common core of tested knowledge and competence in the loading, driving and off-loading of fuel tankers. It is supported by the PDP training standard which all tanker operators will be able to use as the basis of driver training and development.
The PDP builds on the knowledge already tested in the ADR certification process, incorporating additional knowledge and a practical assessment of skills. It includes content specific to five industry sub sectors; home heat, commercial, aviation, retail and marine.
Delivered through a combination of in-house or third party training and assessment providers accredited and audited by SQA, the passport will be valid for 5 years and will include an annual refresher day and both a written and practical assessment.
Email: john.bowman@skillsforlogistics.org
Jill Turner receives the award from councillor John Loughnan
Carbery Plastics has been recognised at an awards ceremony hosted by its local town council.
The company was nominated for a Spirit of Clonakilty Award by councillor. Cionnaith Ó Súilleabháin. The award which recognises Carbery’s contribution to the local economy, continued commitment to innovation and sales success in Ireland, the UK and Europe, was presented to the company’s Jill Turner at a recent ceremony in the West Cork town.
“I’m delighted to receive this prestigious award on behalf of everyone at Carbery,” said Jill. It recognises the contribution and commitment of the entire team to the continued growth and success of our business. Despite a challenging macro economic environment, Carbery continues to invest in its production processes and products, ensuring the company is positioned to capitalise upon the market opportunities of the present and the future.”www.carberyplastics.com
Encouraging the uptake of high efficiency oil-fired appliances is Martyn Bridges, OFTEC’s new chairman
….That is the challenge for Martyn Bridges, Worcester, Bosch Group’s director of marketing and technical support who has been appointed as the new chairman of OFTEC
The appointment, which takes effect on 25th April 2013, sees Martyn commence a two-year spell as chairman of the organisation, for which he has sat on various committees since its inception in 1991.
Having started his Worcester career as a technical services engineer in 1986, Martyn has since worked in a number of roles and departments before taking up his present position, which he has held since 2005. Martyn is responsible for the training, marketing, engineering services, product management and standards departments and is also involved in a number of Bosch-wide design and product committees.
Martyn commented: “I am extremely honoured to be given the opportunity to take up this role within an organisation which is key to the ongoing development of the domestic heating industry.
“I have been in the heating industry for 35 years and involved with OFTEC for over 20 years so I look forward to helping OFTEC continue the challenge of preserving the oil market, encouraging the uptake of high efficiency oil-fired appliances and growing the combination of oil and renewable solutions.”www.oftec.org
www.worcester-bosch.co.uk
Cash conscious consumers, rogue traders dealing in washed diesel and a sharp rise in the use of solid fuel, ensures that oil distributors in the Leinster region are feeling the heat this winter, writes Irish correspondent Aine Faherty
Martin Daly, head of sales and marketing at Top Oil says that a succession of shorter winters, coupled with a short home heating season, is putting pressure on the sector, as people use their central heating as a last resort. “People are burning turf or whatever fuel they can and supplementing this heat with oil,” says Martin. “In a bid to save them money in the long term, people are investing in solid fuel burners instead.”
This first Essar branded tanker is now working on deliveries to commercial customers
Last week Essar Oil (UK) unveiled its first ever Essar liveried tanker at the company’s Stanlow manufacturing complex
The tanker, which is set to become a familiar sight on the motorways of north west England, will be used on commercial deliveries. Operated by Flexigrid, Essar’s haulage service provider, the vehicle is the first branded tanker to be put on the road since Essar acquired the site in August 2011.
Colin Dixon, head of marketing at Essar Oil, said: “Our priority since acquisition has been to build our reputation for being a reliable supplier with whom it’s easy to do business. On the back of getting these basics right we’ve been able to expand our business, including that part in which we deliver fuel into the premises of the bus & rail companies, hauliers, parcel delivery companies, manufacturers and resellers. The fact that we’ll now have a very visible presence out on the roads is a sign of our determination to attract new customers, further grow the business and build our brand in the UK.”
“We’re delighted to have an Essar branded vehicle as part of our fleet and look forward to growing our partnership with Essar over the coming years,” added Michael Blundell, Flexigrid director. The branding of the tanker reflects the hard work of the staff at both companies over the last 18 months, in particular the professionalism of the drivers in delivering the highest level of service.”
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“The closure of Coryton is already having quite severe consequences. It’s affecting other terminals in the area, with the high demand for product stretching resources to the limit. When it closed earlier this year, the weather was warmer and demand was low and the problem not as noticeable. Now, companies are queuing at the terminals as computers break down and getting further and further behind. I’m preparing as far ahead as possible, opening up over weekends, as I predict supplies will be low over the coming months.”
John Cooper, Stevenage Oil Co, Herts
“We didn’t purchase products directly from the refinery as a matter of policy, so its closure has made no discernible difference for us.
“We’ve noticed an increase in the amount of traffic at the Nu-Star, TDG and Purfleet terminals that we use on the Thames. As former Coryton users seek out products from alternative sources, such as the independent traders operating from storage points along the river, it’s inevitably led to congestion particularly at peak times, and this remains a concern as we approach winter.
“When Coryton becomes a storage terminal, it may actually prompt us to reconsider the use/purchase of product from the site as a secondary source of supply – dependent, of course, on a suitable pricing structure. And, as traditional Coryton ex-rackers drift back to purchase from the new terminal, it may also benefit the Thames terminals by reducing congestion.”
Neil Flynn, Linton Fuel Oils
“The impact of Coryton closing is showing; supply is already becoming an issue, especially around us. And with wholesale traders not buying much stock due to backwardation, there’s double trouble with not enough physical stock to supply and distribute. We’ve had situations where our hauliers have gone into terminals and there’s been no allocation or they’re on complete stock out.”
Mark Mackenzie, Nolan Fuels, Oxon
“Coryton’s closure is already affecting us as we used to utilise it extensively with certain suppliers. Unfortunately, now that source isn’t available, it’s impinging on the service that some of those suppliers can provide.”
Rob Warne, AD Fuel Oils, Essex
“It’s too early to say. P66 says it will have no impact but there are already allocations on kerosene. There’s bound to be an impact.”
Richard Burton, Barton Petroleum, Northants