The peaks and troughs in the retail fuel market are going to get much bigger this year, according to BP’s retail director Graham Sims. “The volatility this year of the British petrol retailing market is going to change, and we’ve got to get used to the great times and the bloody awful times,” he said.
“Global demand on products is making them more volatile, so when you have a bad season’s weather in north US, one scare in Baghdad, one ship not being able to dock in Killinghole, there’s no slack anymore. In the UK market there is no shortage of product, but the market is just a bit jittery. Therefore the dealer community as well as the oil companies need to evolve their offer so that when you have these downturns you’ve got something else keeping you going. In well-run locations you should be looking at between 30-50% of your profit now coming from non-fuel. A few years ago it would have been 10%.”
Sims stressed that it was a good time for independents if they had the right attitude. “Fixed margins on fuel is not going to be what makes a great partnership with a fuel supplier, or what is going to make their
fortune. I’m very proud of the dealers in BP because, in the main, they have a partnership philosophy. When times are tough, like last year, we all pulled together. And when the good times came – in November and December – we made money. Certainly those that had a margin share or Platts-plus
contract would have made a lot money. Last year was the worst ever. About 75% of the time no money was being made selling fuel.”