FON recently reported on a Shropshire-based charity that had secured a government grant to help people join a fuel-buying scheme. The £3000 grant is being used to make the scheme available to people who would otherwise be unable to pay for membership     The above group is just one of a growing number of community schemes across the country. And it’s not just in oil that such schemes are spreading… The Big Switch campaign, a collaboration between Which? and pressure group, 38 Degrees, already has more than 60,000 participants. The ‘trailblazing scheme’ offers energy customers the opportunity to club together to secure optimum prices from energy suppliers. Group-buying firms, Incahoot and Utility Warehouse also offer discounts on energy. In Oxfordshire, an organic farmer is encouraging community ownership of renewable energy projects. In 2004, Adam Twine, gave locals the opportunity to own shares in the wind farm on his land. Eight years on, he is offering the local community ₤4.5m shares in a new 30-acre solar project. Back to oil, The Times recently reported on a free website which is taking the idea of community buying onto a national level. www.oil-club.co.uk, which was founded by Chris Brown, combines smaller purchasers into one big body. Distributor views Although popular with consumers, community fuel buying groups are not viewed favourably by all distributors. Tony Deakins, of Shropshire based Deakins Fuels, told FON: “I’m very much against such schemes. I don’t supply any buying groups, as the majority of deliveries involved tend to be minimum delivery (500 litres) and are often not straightforward. Most of our customers seem to value our level of service and realise that another tier of ordering – for a minimal saving – simply removes them from any close relationship they may have with their distributor.” Shropshire distributor, Oakleys Fuel Oils is not totally against buying groups, but does have some reservations. “There’s nothing wrong in principle if a group consists of a few houses and involves a sensible size load. One tanker delivering to a small, close-knit community is a sensible option for both parties. When groups start to spread county-wide, deliveries are scattered and the members want the oil unrealistically cheap, then it simply doesn’t work.” Talking about the aforementioned Shropshire scheme in particular, Richard says he was shocked that Oakley’s, as one of the county’s biggest distributors, was not asked to supply the group. He also thinks that distributors are inadvertently giving buying groups more leverage by quoting inflated prices when they are not interested in supplying, rather than simply declining. When the group is eventually quoted a more realistic rate, it will then claim to have delivered its members a large saving. Richard makes the point that the industry should have a format to adhere to when dealing with buying groups. He also questions: “What do the group organisers get out of these schemes? A lot of these groups are run as businesses. Are they in fact taking a wage? Why don’t they just make an honest living out of it and buy a tanker themselves?” This is a sentiment echoed by Tony Deakins, who also questioned the role of group co-ordinators. Hingley and Callow director, Helen Needham, made her feelings on the subject quite clear:  “Community buying groups – now there’s a topic! The bane of our life! And, which bit of community buying allows the organiser to take more of a margin than us the supplier?! I had one the other day wanting to take 4ppl!” Mark Askew, chief executive of the Federation of Petroleum Suppliers was recently quoted in The Times as saying: “Small, local buying groups in a neighbourhood can benefit from the saving the distributor makes on travel time and costs. However, size is not always a benefit when purchasing oil through buying groups. People should be realistic about the level of savings.” Oxfordshire initiatives In a bid to save money and make their village a cleaner and safer place to live, residents of West Challow, Oxfordshire, operate an oil buying group. Local distributor, Sweet Fuels, has been supplying the group for three years, and also supplies a number of others in the area. Owner, Adrian Sweet said: “We supply about 20 groups in total. For the majority of these groups, we deliver once a week, offering members a discount off the ring round price. It works really well. However, we don’t supply the larger buying groups who routinely contact at least 10 companies to negotiate the cheapest price.” According to a recent article in the Banbury Cake, residents across Oxfordshire are benefiting from the roll-out of a scheme, which has already saved thousands of pounds.  The scheme, which was originally launched in 2010 by Oxfordshire Rural Community Council (ORCC) and Chris Pomfret of Community Buying unlimited, has saved householders a reported £71,151. The initiative, which requires residents to pay an annual fee of £20 and place their order through a local co-ordinator, has now been rolled out in 19 of Oxfordshire’s 37 Rural Community Partnerships. Peart partners housing association In North Yorkshire, F. Peart & Co has partnered with Broadacres Housing Association, offering an oil scheme to help residents take control of their energy bills. Broadacres Housing Association, which provides a range of services to over 5200 homes, sought a solution for its tenants, who sometimes find it difficult to purchase heating oil in bulk. “We were concerned that a number of our residents were living in fuel poverty and couldn’t afford the cost of their oil upfront, so we decided to set up a contract with an oil distributor to resolve this issue,” explained a company representative. As part of the scheme, residents are not required to pay any bills at the time of delivery and instead a direct debit is set up with the housing association, which then pays F. Peart & Co direct. Laura Jackson, business manager at the company, said: “Paying by direct debit is the safest and simplest method of payment and gives the tenant peace of mind that they’ve paid on time. A regular monthly payment also makes it easier for customers to budget for their heating oil.” Since its launch, 154 residents have joined and are now benefitting from the initiative.  

Kingspan Environmental’s SonicSignalman electronic oil-level monitoring system now has a NEW SMS feature, allowing oil companies to send text messages to end-users. The SonicSignalman is a onepart device that uses the latest ultrasonic and GSM technology to remotely monitor the level of oil in a customer’s tank. The new text message facility will enable oil companies to send updates to customers about promotions and planned delivery runs. Messages can be broadcast to all customers or sent to those in specific geographical locations. The information received back can be used to improve logistics, reducing the number of wasted deliveries and spreading periods of peak demand. www.sensor-systems.com

There are two million off-grid homes in the UK and Ireland.  Over the next 20 years, these homes will slowly but surely need to decarbonise. Along the way, greater energy efficiency of equipment and buildings will play a vital role; alongside the probability of an increasing number of new renewable technologies working in harmony with existing oil-fired systems. The energy behind the show Facilitating the way into this evolving marketplace is the Oil & Renewable Energy Show.   Organised by A&D Publishing – publishers of Fuel Oil News, Oil Installer, and Renewable Energy Installer – this national exhibition will be held at Manchester Central conference and exhibition complex on October 17th – 18th. Speaking at the official launch earlier this year, the show’s commercial lead, Jonathan Hibbert, said:  “This show is about oil working smarter and more efficiently alongside complementary renewable technologies such as solar PV, solar thermal, heat pumps and biomass.  It’s a chance for everyone connected to the oil heating industry to broaden their knowledge; to discover and to discuss future options for off-grid domestic and commercial properties and to watch practical demonstrations which will illustrate how the technologies can work together.” The show’s main trade association sponsor is OFTEC; director general Jeremy Hawksley said:  “OFTEC was formed 21 years ago to create technical standards for the oil heating/cooking industry.  Now, the 10,000 plus OFTEC-registered technicians serving this rather unique niche market, have a new mission to  get the low carbon message across to their customers.  The show will help oil installers find the most economic and do-able solutions to assist their customers in this transition period.” Well-known to FON readers as a tank manufacturer, Kingspan Environmental is a main commercial sponsor. Marketing manager, Cheryl Graham, said: “We’re delighted to be associated with the Oil & Renewable Energy Show – we’ll be launching new products at the event and showcasing the complete Kingspan Environmental product portfolio of traditional and renewable technologies.  We’re committed to the development of environmentally friendly products; one being rainwater harvesting, now being retrofitted in many homes and businesses.” “With fuel prices as they are, there has never been a better time to recommend renewable technologies as the perfect partner for oil-fired boilers in off mains gas properties,” said Martyn Bridges, director of marketing and technical support for Worcester, Bosch Group.   “We’re delighted to be one of the show’s key sponsors. Worcester has always been a strong advocate of combining solar thermal panels with oil-fired boilers for the energy efficient provision of hot water. Combined with the prospect of biofuels now on the horizon, those keen to introduce a renewable element to their homes have plenty of choices.” “October’s Oil & Renewable Energy Show has already attracted huge support,” reports Jonathan Hibbert.  “We’re particularly delighted to have a distinguished group of big name sponsors and exhibitors. Their support is testament to the show’s national significance.” To find out more about the Oil & Renewable Energy Show, call the team on 01565 653283 or visit www.oilandrenewableenergyshow.co.uk. 

Roger Creswell, director of the Oil Recycling Association (ORA) writes: “Never far from the environmental scene, and despite its wide utility, oil is a word that seems to catch the attention of governments, regulators and commentators, especially when it’s lost or spilt. That seems fair and just; so it means we all have to be focused, particularly so when it comes to managing waste oil” Obligations for producers In 2010 the UK introduced the revised EU Waste Framework Directive (rWFD) into national legislation and this placed a number of obligations on waste producers. While all oil streams will at sometime incur a waste, in general, our reference to waste oil is essentially that of used lubricating oils, for example engine oils, and those more common fuels. If something is discarded (and this has many legal meanings) it is a waste, even if that something is unused. Once a waste, it is to be managed under waste legislation. While offering a high degree of environmental protection, it can create barriers to subsequent reuse or recycling objectives. Waste oil has been one of those difficult areas for regulators. Having the obvious potential for use as a fuel, and recouping its energy content through combustion, then the Waste Incineration Directive (WID) would probably apply, though very few applications can conform to the rigorous emissions standards that are imposed. In the last few years, a tremendous effort has been channelled by authorities, and the oil recovery industry, into establishing waste policies that have been translated into guidance. These have then been turned into standards, in order to achieve a position that allows for an End of Waste status to occur.  All devolved regions of the UK have adopted such a standard that defines the conditions for End of Waste for used oils, in what is generally referred to as the Quality Protocol For Processed Fuel Oil. Quality protocol This quality protocol is usually abbreviated to the term ‘QP for PFO’. Essentially its core is a technical standard that seeks to emulate certain classes of industrial fuels, described in BS 2869. This together with certain restrictive additional parameters is designed to ensure that on combustion the fuel will be no more harmful to man or the environment than a comparative virgin fuel. It achieves this through the setting of detailed sampling and test limits/methods, and notably the use of accreditation to demonstrate compliance. There are further restrictions as to what may be incorporated into its feedstock, and on those permitted to produce a PFO, but additionally on users of the fuel. Higher oil prices in 2010 and 2011 have formed attractive outlets for PFO. The result has been that supplies of waste oil inputs are readily sought out on a commercial basis and a potential polluting stream is economically and efficiently removed from the environment. UK markets for the historic waste oil status, Recovered Fuel Oil (RFO), are now very limited, with the consequent need to export some volumes to continental based lime kilns that are WID compliant and where duty differentials make it an attractive fuel. Twists and turns? The rWFD transposed legislation referred to earlier, has required waste producers to declare that they have considered the hierarchal requirements that place an option of material recycling higher than that for energy recovery. What this means, is that for used lubricating oils, can the inherent basic lubrication oil fraction it contains be recovered for reuse? – a process known as re-refining. This also says that where combustion is the selected option, it needs to be justified through Life Cycle Thinking, and that is recovery usage and not recycling, a fine point in law. The Department for Environment, Food and Rural Affairs’ Hazardous Waste Guidance was published recently.  www.defra.gov.uk/environment/ waste/business/hazardous-waste Finally, in 2011 government’s National Policy Statement on Hazardous Waste and Planning for Infrastructure, puts forward a specific policy to encourage investment in a modern high technology lubricants re-refinery. This reflects waste hierarchy policy, but substantial monies will be required from the private sector. www.oilrecyclingassociation.co.uk

In December 2009, as the legislative framework shaping biofuels was about to change, FON reported on problems and issues affecting the industry. Two years on, we take a look at how things have changed. “Looking back at the original article, what strikes me is that in some ways biofuels have changed a lot; in some ways they’re exactly the same, “ says Mabanaft’s biofuels’ manager, Robin Lloyd 

Now chairman of Climate Change Capital, Vivienne Cox, who retired from BP in 2009 after 28 years, was guest speaker in the Vital Topics series at the University of Manchester’s Business School; Fuel Oil News listened to her perspective on the energy markets Oil and gas – mispricing risk Although disagreeing with the peak oil theory, Vivienne sees oil’s role in the future energy mix becoming less important – especially as gas production – $54 cheaper than a barrel of oil – and backed up by new sources of shale gas, is growing. Oil still has a reserve to production ratio of around 40-50 years; most oil wells have only had 50% of their contents extracted and technology exists to extract more but – going deeper, hotter and sourer comes with risk – a risk that Vivienne says the world has been significantly mispricing. For some time, the world has been deluding itself as to what energy should cost.  With huge political risk attached to energy production, project development gets harder – low cost oil production in Libya quickly went to no cost in the Arab spring; shale extraction attracts complaints and lawsuits; the cost of Shell’s long delayed gas to liquid plant in Quatar went from $5 to $19 billion dollars; Finland’s nuclear program is 60% over budget and 5 years late. As the financial markets have already found to their cost, mispricing risk is dangerous. Vivienne also highlights public backlash as another mispriced risk. Risk and volatility comes with oil production in Saudi Arabia, Iraq, Iran, Kuwait and Venezuela.  Plus 17% of energy supplies pass through a narrow stretch of water governed by repressive dictators – can we continue to rely on energy from such sources? As economies grow, access to energy will be demanded as a fundamental right.  China accounts for 20% of global energy demand; global energy consumption has risen by 6% as a result of its CO2 intensive industries. Is it sustainable for  global energy use to continue to increase? Will there be an increasing role for renewables in the future energy mix? As executive vice president of BP’s gas, power and renewables division, Vivienne created BP Alternative Energy to focus on solar, wind, biofuels and carbon sequestration and storage.  Asked why she had created a renewable business within an oil company, she pointed out that BP is an energy company and energy is shifting. If oil companies were to be more involved, it could facilitate a shift to renewables.  In a difficult investment climate, backing for sustainability is much lower and with long pay backs on projects, investors need very deep pockets. Seven years ago, Vivienne was ‘very optimistic’ about a renewable future but although the use of renewable energy has tripled in 10 years, the sector remains very small.   Even allowing for annual growth of 20% over 10 years, renewables would still only account for just 10% of our total energy mix; a figure insufficient to combat CO2 emissions.  Plus, in common with older energies, consistency of politics and consumer acceptance also inhibit further growth. Security of energy supply will be the biggest incentive to adding more renewables to the energy mix.  China will ‘leap frog the west’ in both technological advances for conventional fuel and renewables; the country is already very active in wind, solar PV and in cleaning up its coal generation.  As China has little proven reserves of oil, the driver for such technological advances will be the country’s energy security and its air quality. With access to both oil and gas, the US does not have a highly developed renewables sector although Vivienne expects a greater focus on wind power.  In the UK, tidal wave offers ‘promising technology’.  Good biofuels do make a difference, with the carbon footprint of cane-based ethanol being lower.  Airlines have shown a willingness to adopt bio-aviation fuels but with very small margins, will higher cost fuels and higher costs flights be acceptable? Achieving renewable production on a global scale will be very hard to achieve but many opportunities exist for smaller companies offering microgeneration. Reducing CO2 emissions The much-hyped Copenhagen climate change talks in 2009 highlighted that a global agreement to reduce CO2 emissions was ‘unlikely’.   Believing it is too late to stop temperature rises, Vivienne says we must accept CO2 emissions and adapt to climate change by reducing energy demand and raising efficiency. To mitigate against the issue of environmental migrants forced to flee rising water levels and hotter temperatures, the world must help. In Vietnam, mangrove swamps have already been created to help combat rising sea levels. Solutions to a massive problem Concluding that global energy provision was a ‘massive problem’, which will necessitate investigation into every emerging technology to help find solutions, Vivienne said the inclusion of nuclear in the energy mix was essential. Asked by Fuel Oil News what skills would help better secure our energy future, Vivienne replied ‘communication.’  The energy industry is largely run by engineers who can’t communicate.  Whilst engineers and scientists will still be required, people who possess skills to better inform the public – perhaps social anthropologists – and raise their perception of the energy industry are definitely needed.

  Weston-super-Mare based BWOC was founded in 1982 by Bob Wayne, a family man who had spent all his working life at different levels within the oil industry

Last summer, a new distributor emerged in the south west – Monument Fuels. Several months on, FON spoke to co-owner, Trevor Rolph, to find out more about the company and the trials and tribulations of setting up a new business 

Nestled in the heart of the Lancashire countryside, a mere stone’s throw from Carnforth station, which famously provided the setting for the 1945 film, Brief Encounter, lies WCF’s North West and Cumbria fuels division. Fuel Oil News recently met up with finance director, Jo Ritzema, North West general manager, Dave Spencer and commercial manager, Lynn Casson, at the company’s Carnforth depot Employee matters Founded as a farmers’ co-operative in 1911, the company was incorporated in 1988 and celebrated its centenary in style with a party last May. 100 years on WCF remains fiercely independent and proud of it. The company is owned by 3800 private shareholders, including many employees, which as Jo pointed out, is unusual in the UK for a non public organisation. “All of our employees are shareholders and encouraged to have shares, under the various schemes that we offer. Last year every employee received a bonus of £1500 in shares. It’s important to us that there’s a very strong element of employee ownership. It gives employees a sense of belonging and demonstrates to them that their opinions are valued.” Across the business, WCF employs approximately 250 people, around 50 of whom work in the company’s fuels businesses. “Staff retention is high,” says Jo. “This is partly down to our culture and partly down to location.” Proving the point, Jo has worked at WCF for 8 years, whilst Lynn has been there for 18 and Dave 23 years. Experience counts Following the removal of the default retirement age in October, the company is keen to retain drivers over 65. “It’s definitely an advantage to have older drivers in the business,” comments Jo. “Their local knowledge and existing customer relations are invaluable. It may be the case that an older driver is happy to work over the winter but would prefer the summer off to spend time with family, and we’re happy to accommodate that sort of request. The only downside, from a business point of view, is that the removal of the default retirement age, makes it very difficult to plan ahead.” Geographical spread The company consists of two main divisions; retail and specialised distribution, which includes fuels. WCF’s fuels sector operates from three main regions, all of which are run autonomously, each with its own general manager; North West (which covers South Lancashire to the Scottish Border, from the Irish Sea to the Pennines, as well as Wensleydale and Swaledale); North East (which encompasses Hexham and Northumberland, as well as the Tyne, Wear and Teesside areas) and Eastern (which primarily caters for the Yorkshire, Humberside and Lincolnshire areas, but also extends as far as Peterborough and into the Midlands). With depots in Boston, Pocklington, Immingham, Carlisle, Carnforth, Hawkshead, Peterlee, Gosforth and Hexham, and more than 1.5 million litres of storage nationwide, the company is well placed to cater for its wide spectrum of customers. Across the three regions, the company operates in the domestic, retail, agricultural, commercial, industrial and marine sectors. Currently, the company operates 32 tankers, which are normally leased on an 8 year basis, from a number of different companies. “We made an operational decision to lease, rather than buy tankers, as it gives us more flexibility,” explains Jo. “Often though, we’ll buy the tankers at the end of the lease period, if they have performed well.” Whatever the weather Like many other distributors, the severe weather last winter caused problems for WCF, but Dave said: “I can’t think of one person that we let down. The weather was terrible but we got through it because of our fantastic staff and drivers. Our drivers didn’t give up, even in the most badly affected areas, and on a couple of occasions, tankers got stuck and damaged.” Lynn echoed this: “Communication is extremely important to us. We never put the phones on voicemail during working hours and we always get back to people to keep them up to speed with their deliveries.” Indeed, it is the customer contact that makes WCF and the fuel distribution sector as a whole, an attractive place to work: “We have a variety of different customers and a good level of contact with them in the office. It’s very much a localised industry and as a result, we get to know our customers well. We get lots of indirect, positive customer feedback from our drivers,” says Lynn. When asked what is the biggest headache in the industry, Dave had to think hard: “Probably the uncertainty of supply from the refineries. We get more outages than we would like. Fuel is also way too expensive.” For Jo it is the sheer number of people competing in a small area. “Fuel distribution is a mature market and innovation is difficult. We need to make sure we are better than the competition.” Moving with the times In order to expand its customer base, compete with other firms and offer buying flexibility, the company has an online presence. In addition to individual websites for each separate region, which allow customers to order oil and manage their accounts online, WCF also operates www.fuelfighter.co.uk. “Fuelfighter is not a huge resource,” says Jo “but we wanted to have an additional internet presence for those customers who prefer to order their fuel online.” Looking ahead: “We’re aiming for steady growth,” says Jo. We are focussed on increasing our customer base, in what is a huge geographical area. Although we’re always in the market for acquisitions that add value to the company, we do have to be realistic that there is normally excess competition for those businesses that do come onto the market.”  

Dartmoor has a harsh, unyielding landscape which is intersected by narrow roads and small country lanes connecting houses and communities together.  Deliveries on the moor can be difficult at the best of times, but trying to deliver fuel in the heart of winter along snowy, icy roads brings a whole new meaning to the word “difficult.”  It is a challenge that Okehampton-based Moorland Fuels relishes   “We pride ourselves on our ability to deliver,” said Moorland Fuels’ managing director, Ben More.  “We like to consider ourselves the fourth emergency service, having the ability to deliver to some extremely remote places, keeping people’s homes warm and their livelihoods secure.” New tanker joins the fleet Moorland Fuels recently bought a new tanker from the Maine Group.   Ben explained:  “Maine was our chosen supplier because they understood the difficulties facing a small company, both financially and geographically.  The result of the partnership was a narrow track tanker specifically designed for use in hard-to-navigate areas, both on the moor and in towns and villages.  “It plays a vital role in our fleet of vehicles and is a welcome sight for many of our more remote customers,” added Ben. The new vehicle is unique in that both its tank and pumping/metering equipment are produced by the same company, Maine. “This “one stop shop” has obvious advantages,” said Ben.  “Only one place to go with problems and one less profit margin to pay, as other tanker builders purchase equipment from independent metering equipment manufacturers.  Maine, like Moorland, are finding their way in a crowded market by trying to do things better and more efficiently but with customer service uppermost in their thoughts.”  Both hope for continued success together. Impressive growth The addition of the new tanker brings the fleet to five – impressive growth in a tough economic climate for this Devonshire distributor.  The tanker’s eye-catching artwork shows Dartmoor’s most visited granite tor – the legendary Haytor.  Artwork was designed by Bristol-based Cohort Designs and customised by KBS Signs in Exeter. “We see ourselves to be part of the Dartmoor landscape,” said Ben.   “We’re constantly looking for ways to improve our service to customers.  We recently launched a new website www.moorlandfuels.co.uk to provide more information to our customers about heating oil, tank replacements and boiler servicing.  It’s also a good place to catch up on company and industry news.” Many customers support Moorland Fuels because it is local and a fully independent distributor.  “They know we source quality products at the most competitive price to meet the demands of their industry, farm and home.”  The company works closely with its contracted supplier, BWOC, who were instrumental in supporting the start up of Moorland Fuels with both supplies and advice.  This relationship ensures Moorland Fuels is able to keep an extensive stock of fuels to meet customer requirements.

Established in 1935, Chandlers Oil & Gas now has six depots – Grantham, Lincoln, Retford, Spilsby, Spalding and Corby.  Started 76 years ago by Des Chandler, Tom Caunt and Joe Pell, today’s business is run by Tom Caunt’s grandsons, David Hindmarch and Nick and Simon Caunt Thirty-four drivers operate the company’s 7 articulated tankers and 27 rigids. Serving customers in Lincolnshire, Nottinghamshire, Rutland, Northamptonshire, Cambridgeshire, Norfolk and Leicestershire, they cover an area which extends as far north as Kingston upon Hull and east to Kings Lynn.  Fuel sales are split 40%  domestic, 40% agricultural and 20% commercial with product sourced from terminals at Immingham, Nottingham, Birmingham and Kingsbury. The majority of depots are fitted with skids and metering from Alpeco; five being bottom loading.  Grantham and Lincoln store 500,000 litres each with the remainder storing around 300,000 litres apiece.   Tank gauging software from Kan’to Instruments has recently been installed and is ‘working well’. Respect for customers and staff “We like to think that we run a tight ship,” managing director, David Hindmarch told FON during an autumn visit to the company’s Grantham depot.  “In essence, there are many distributors doing the same job – the key difference is the way in which we each do that job. “Our focus is firmly on service and in exceeding our customers’ expectations.  We genuinely endeavour to give a first class service as without those customers, we’re nothing.” The company is rewarded by having a ‘significantly loyal band of customers’. Also vital to Chandlers’ success is the close relationship which the company has with its staff.  David explained:  “We’ve worked very hard to create a strong bond between staff and management with relationships built on mutual respect and empathy.  Each and every member of our 60-strong team knows they’re an important cog in our wheel, they’re kept in touch with what’s going on and are involved in management decisions. Good performance is well rewarded. “For a company to perform well, employing good people is a must – and for this a good wage structure must also be in place.  With well-trained and motivated staff who understand exactly what they’re doing and why, a company can’t go far wrong.” Marketing and managing the business Chandlers still has 6 sales people out on the road and spends a considerable sum on marketing.  Advertisements are aired on local radio, and Chandlers sponsors the weather on Lincs FM.  Leaflet drops and advertisements in parish magazines have further enhanced its marketing drive to attract new customers.  Running its own web and graphic design business, Hat Trick Media, helps Chandlers with such promotional activity. Also worth the investment was Alpeco’s i-meter.  “With i-meter tracking on our vehicles, we caught a driver stealing fuel red-handed.  It may have cost £300 a truck but given the high cost of fuel, it’s worth it.” With an ordering facility on its Chandlersoil.com website, an increasing number of orders are being placed online.  Previously, a shareholder in Boilerjuice, David said:  “As a national online supplier, I believe that Boilerjuice is still the best offering. It’s a good sound business.” Chandlers remains on the list of suppliers to Boilerjuice. “Cash flow can be an issue – strong credit control must be in place – we credit check everyone and have debt insurance with QBE.  Sometimes bad debt does come out of the blue although it’s never as a result of not having done due diligence or made checks!  It’s a continuing aspiration to have more customers on direct debit and, ideally I’d like to see an industry-wide initiative whereby every domestic customer pays by credit card at point of order.” Addressing industry challenges and maximising our strengths Like other distributors, in the run up to the publication of its off-grid energy report, David attended meetings with the Office of Fair Trading.  “The point I made was that our market’s already very competitive – if crude oil had been 30 dollars a barrel, we wouldn’t have needed any discussion.  December 2010 was almost a once in a lifetime occurrence, sadly.” The UK’s refining capacity is, however, a concern. “There’ll certainly be more competition for product in the future; although the advent of the wholesalers does offer distributors another fuel avenue, together with some interesting price mechanisms enabling us to buy forward, lock in and/or cap prices.  These newer companies are much more proactive then the majors and have given the market an interesting twist.” Speaking about other challenges facing the industry, David highlighted a lack of professionalism historically; the difficulty of extricating a good profit margin and a tendency to drag down the overall margin. “Certain companies are bereft of aspiration to create profit and that’s to the detriment of every other business in the industry.  Costs continue to rise forcing markets to work at unprofitable levels when compared to those of 10, 20 and 30 years ago.  I think the way some have priced over the last three to four years showed a complete lack of understanding of the market. “Whether an SME or a public company, 95% of this industry could enjoy steady and profitable growth achieved by means other than constantly cutting into margin.  A company with shareholders is usually driven to producing good profits. In acquiring Total Butler, I’m sure DCC’s ultimate aspiration will be to generate increased profits as well as increase its market share.   Because Total Butler belonged to an oil major with staff on the corporate career ladder – seemingly  inexperienced in marketing and sales and with no practical understanding of how the market operates – it led to profits plummeting. “The industry has many well-run businesses – large and small.  The presence of GB Oils has certainly influenced us all. “The management  of companies such as Watson Petroleum, NWF Fuels and Rix – all good operators – has been key to their success.  Each may have a different game plan and rationale but collectively, they have a responsibility to the industry in the way they perform and market themselves.  Running a business well is not about size; you have to have certain key elements right.  Understanding, empathising and communicating with your customers in a way they like, understand and trust is one of those key components. “This industry has some extremely talented people but in an industry that constantly tries to fall back on the lowest common denominator – price – such people can be dumbed down.  We all need to strive to add value to the industry that we represent, so that every sale is not dependent on who is selling at the cheapest price. “With all energies – not just oil – having risen in price over the last 12 months – gas is up 22% and electricity by 13% – let’s push our best aspects – heritage, integrity, competitiveness and service levels. “It’s all a bit of a challenge but change brings opportunity and the chance for us to grow our businesses more profitably.  As a company, we’re quietly confident and positive about the future.  “And what if you’re offered that big cheque,” FON asked.  “My office door’s always open,” replied David  “But there’s a conundrum – either the big players will get bigger and we will end up in a price war or, good sense will prevail and the industry will pull prices upwards giving a better return to all; so maybe Chandlers will hang around for awhile longer….”

Ask anyone about the fuelling requirements of the world’s busiest international airport and the first thing that inevitably comes to mind will be aviation fuel. Aviation fuel certainly ensures a smooth passage for Heathrow’s many hundreds of flights daily; but also vital to the airport’s smooth running is fuel for up to 7000 other vehicles which provide essential services – aircraft maintenance, buses to bring in staff, vehicles to push out and tow in planes; machinery to load cargo, handle baggage, empty toilets, clear snow, de-ice wings and stock up with catering supplies. Recognising the market’s potential Seeing potential in this niche and hitherto difficult to penetrate market, Phil Wright, a former regional manager with Total Butler, said:  “Following redundancy, I met up with David Fairchild (WP Group) to explore the possibilities; he was interested, and together with Neil Donald (former owner of Southern Counties), we set up Airport Energy in 2000. “At that time, legislation – in particular the updating of the Clean Air Act – meant that all vehicles, including those used on Heathrow now had to meet stringent targets.  As BAA, owners of Heathrow airport, switched to using ultra low sulphur gas oil – we focused on supplying this fuel which at the time was new to the industry and in limited supply.” The company now provides 95% of Heathrow’s airside fuel.  Additionally, it manages fuel supply and fuel facilities at Stansted and Edinburgh with fuel also supplied to Gatwick, Manchester, Liverpool, Bournemouth, Glasgow and Aberdeen airports.  Fuel is sourced from Greenergy and Esso with fuel supply to Scottish airports subcontracted to Highland Fuels. Adding fuel management services In 2004, Airport Energy Services was created to offer both an airside refuelling service and management services. “As customers realised the increasing importance of controlling and monitoring fuel usage, we introduced them to FuelOmat from Orpak Systems.  This system guarantees the right fuel in the right vehicle tank using a unique vehicle recognition service (VRS) as well as eliminating unauthorised refuelling.  It also collects and reports a wide variety of data, providing greater control over fleet management.  This initiative has helped BAA and our other airport customers to both save on cost and lessen environmental impact,” added Phil, now Airport Energy’s managing director. Working a hard day’s night Fuel Oil News recently toured the company’s Heathrow operation which has three fuel stations, 250,000 litres of storage, four tankers and an oil and water truck. Working airside is operations manager, Craig Heggie:  “A coil is fitted to the filler neck of each vehicle we refuel; this transfers data.  Without a coil in position, our trucks will not dispense fuel.  There are no cards and no keys – customers can just fuel and go, but we can see exactly what’s in every vehicle’s tank, and we can show customers fuel usage for a single vehicle or a fleet.” Craig is assisted by Alex McAtear, assistant operations manager, and a general manager, Dave Summers, who has recently been appointed. With its 30,000 workers, Heathrow is a city in itself. “It’s a very demanding environment,” Craig explained.  “Although our refuelling work starts around 5pm, the bulk is done after 11pm when planes are grounded.  We only stop refuelling when the airport starts moving again around 5am.” Airport Energy has 7 drivers.  “Drivers enjoy being their own boss – with just the night shift schedule detailing vehicles to refuel, they’re in charge but – working airside extreme care must be taken to avoid colliding with an aircraft. This seems obvious but it’s an extremely hectic environment. The big fuel consumers “We try to ensure that no vehicle is left with less than half a tank of fuel.  Big fuel consumers such as the vehicles which push back planes often have to be refuelled every night.  Air starts – used to bump start a plane – can consume up to 70 litres an hour.   When called into action, fuel must be available within four hours to refuel snow ploughs and, having three engines – one to heat the glycol, another to pump and a third to drive – de-icing equipment burns a lot of fuel. “Another useful aspect of our data capture is that it offers customers  useful comparisons.  For example, when considering the purchase of new equipment such data reveals the most fuel efficient. “Cargo customers like DHL work through the night so their vehicles are refuelled during an early morning tea break.  Starting at 1.30am, the airport’s 70 buses, which each use 200 litres a day, take two hours to refuel.  Each bus used to do a 7-mile round trip to refuel – we cut that wastage by taking fuel to them. “Eleven years on, this remains a niche market with good steady volumes which peaks in bad weather and during construction work,” added Phil.  The company supplied fuel to contractors building terminal 5 and is presently supplying fuel for work to upgrade terminals 1 and 2.

Manx Petroleums Ltd has been serving the Isle of Man community for over 85 years.   A Shell distributor for 58 years, the major’s withdrawal from both the island and UK downstream has seen Manx Petroleum go through a period of transition leading to the creation of a new brand identity.  To learn more, Fuel Oil News visited the company at its Battery Pier depot in Douglas