The launch of the PRA’s fighting fund to tackle the integrity of wet stock deliveries has certainly struck a nerve – particularly on a forecourt in Scotland, where the owner, Frank Hamill, has been struggling to sort a serious problem out with his (now former) fuel supplier, Shell, for the past 10 years. Frank has been a petrol retailer for 20 years, building up a good business on his Pheonix Filling Station, which covers a large area on the Keppochhill Road in the heart of Glasgow. It has an average fuel volume of about 140,000 litres a week, but Frank claims he has been losing an average of 2,500 litres per month through delivery shortages.
Frank, a former tanker driver with ShellMex BP before he bought his own site, has tackled Shell over the issue many times: “Our concerns over shortages in fuel deliveries were first raised with Shell in 1994,” he says. “Not long after our agreement started with Shell in 1989 we noticed we were getting negatives showing up on our tank dips. We raised our concerns with our then Shell representative who passed our complaints on to his bosses at Shell House.”
A long period of inactivity came after this and despite several reminders Frank’s rep came up with nothing concrete until the garage was nearing the end of its five-year contract.
“At this time he asked us to present a detailed report of losses we had encountered over the previous term,” says Frank. “We produced this report – which consisted of piles and piles of computer printouts – and after some re-working to present the report exactly as Shell wanted it laid out, it was agreed that Shell owed us approximately £90,000, covering the previous five years from 1989. I thought it was a lot more than that, but at least it was a start.” In the meantime he signed up to another five-year deal.
Nothing happened about his agreed compensation for nearly two months, so Frank questioned the rep who eventually returned with the instruction that Shell wanted the information grade by grade, pump by pump.
Needless to say Frank was flabbergasted – it had already taken him three to four months to get the original paperwork done. “I had been paying staff to work at night to sort out the figures – and now I was being told Shell wanted it a different way. I said it was impossible. So I let it drop. On top of that, Shell kept all the paperwork!”
Soon after this the Shell rep left suddenly and Frank had a similar situation with his replacement.
“Then we started getting the problem badly again – it wasn’t so much hot fuel as short deliveries. We’ve always taken a dip before and after a delivery and we were always short – never once has it been over. The first thing you’re told is that your gauges must be wrong. Fine, we get the gauges checked, and there’s nothing wrong with them. Then you’re told you’re giving too much fuel to the customer. So we get the Weights & Measures to come and check the pumps – there was nothing wrong. Besides if our gauges can be wrong, so can Shell’s.”
Frank then spoke to lawyers about the matter who said he had a great case but who would take on an oil company? One of them compared it to the whiskey business where the shrinkage problem is referred to as the ‘angel’s share’. “The Government allows the whiskey manufacturers their duty on the shrinkage,” stresses Frank. “I asked the Customs & Excise about it and the response was that the ‘angel’s share’ is allowed to the oil companies. I said that surely I should be getting the allowance, but I was told I don’t because I don’t pay the duty direct to Customs. I pay the duty to the oil company who pay it to Custom & Excise, so therefore I should claim it from the oil company – who get the allowance and should pass it on to us but don’t.
It’s a long and winding tale, but roll on to June 2004 and Frank is facing the ending of his Shell contract. “We desperately needed to have these shortages rectified. We approached our new rep who again asked us to supply figures for the losses. We have done this and an agreement has been reached in principal that Shell will reimburse us for losses sustained.
“Our complaint is not only that we are receiving ‘hot fuel’, but that we are being short delivered. Consistently we lose in the region of 250 litres per delivery. We are, however, unable to take any kind of reading at all from our delivered tanker. Instead we must just accept that what the line on the delivery sheet says is what has been delivered. We started to mark on the delivery lines the quantities we had gauged we were delivered, although we were still paying the full amount. We did it for two days and Shell stopped sending a delivery saying we had to pay in advance, following my letter of complaint which the company felt suggested we wouldn’t pay.”
Frank took great offence. “I’ve been paying direct debit to Shell for 20 years – I’ve never not paid. I was so angry I went straight to the bank that day and cancelled all my direct debits, so now I do owe them for two loads. Shell also stopped paying us for credit cards and is still holding £70,000 of our money. So I guess it’s even.
“People often ask why we didn’t complain years ago – we did – but the difference was that we were making good money, so if you lost £500 on hot fuel or short deliveries whatever, it wasn’t a great deal and we were getting money back in other ways so it wasn’t a problem.
“I think many retailers have a problem but they’re too afraid to speak out about it; and when they do, they know it’s a lot of work, and they’re not going to get anywhere with it.”
While the dispute still rages Frank has now signed up with Jet. “I’ve had only three loads – but it seems that if they deliver 19,928 litres that’s what they charge you for. That’s all we want – it’s great.”