Fuel supplier Murco has thrown a lifeline to Harvest Energy dealers, who have had to source more expensive petrol on the spot market for five weeks because of the Prax Lindsey Oil Refinery’s demise.
Murco is the first major forecourt brand to step forward to offer short-term contracts, in this case for six months, with an immediate break clause if the Prax Group subsidiary Harvest Energy re-secures supplies from elsewhere, according to retailers Forecourt Trader has spoken to.
It is being seen as a major breakthrough by affected retailers. They operate between them 125 Harvest Energy and Total Energies branded sites. The latter brand came on board with Harvest Energy in a deal with Total, the multinational oil company, in 2019 to develop its network of service stations and to secure fuel supply.
But since the collapse of the North Lincolnshire refinery on June 30, the dealers have had no choice but to shop around day to day for the best prices outside of their contract with Harvest Energy.
Over this period some of the dealers say it has cost them tens of thousands of pounds in higher fuel prices, empty tanks, and lost fuel and shop sales. It has also put strain on their time, and added the worry of unpredictable deliveries.
Operator Prem Uthayakumaran, who has four sites, one of which one has Total branding, is hoping other oil brands will follow Murco’s example, to give dealers a choice of supplier. So far other companies have been reluctant, Uthayakumaran says, because of the dealers being held to their Harvest Energy contract.
“I’m disappointed that nobody else has come forward,” he says. ”Chances are that whoever helps us now will end up being our long-term suppliers.”
Seevaratnam Muresh, who operates 10 Harvest Energy sites, agrees that it is difficult to move on: “I’ve had a meeting with my preferred partner and they are happy to proceed only once Harvest let go,” he says.
Harriet Cookson, whose family owns Lawford Service Station in Manningtree, Essex, is jumping at the chance of reliable supplies at a contracted price with Murco.
“This situation with Harvest Energy has cost us nearly £15,000, and it could go on for another five weeks or more. I don’t want to lose another £15,000 in the process,” says Cookson, who hopes to be receiving supplies within two weeks of signing with Murco.
“I am having a meeting on Tuesday with Murco and have agreed the diesel the same as Total, and the petrol, a tiny bit more. It is a relief to know that my supply will be okay for the next six months, and that I won’t have the nightmare of trying to find the best prices and sort deliveries,” says Cookson.
“Only this morning I had a call at 6.30am to say that a fuel tanker had unexpectedly arrived. We have manned deliveries because we have small tanks and either my dad or myself have to be on site to watch. I had to drop everything, which is not ideal when you have two young children to look after.”
Forecourt Trader has contacted Murco, which declined to comment on the negotiations. Earlier we asked other major oil companies about offering short-term contracts but they did not want to comment.
