BP is to terminate its agreements with Arval due to “escalating costs”. From 31 October, BP will no longer accept Arval fuel cards at its company operated sites. In addition, retailers have received letters from the oil company’s fuels operations manager Peter Molloy stating Arval costs have “increased significantly” in recent years and are “simply
unsustainable”. The letters add that, had BP continued its agreement with Arval, it would have had to pass the costs on.
While BP will no longer accept Arval at its company operated sites from 31 October, it has told retailers they are free to continue - but they will need to deal directly with Arval. According to the letters, BP’s online authorisation service will no longer apply to any cards issued by Arval UK Ltd.
The letters also outlined that, as a consequence of the move, dealers “will not be able to obtain on-line authorisation or carry out any pollng of Arval Cards using the Donne terminals.”
They add BP will “not provide any on-line authorisation services or polling services for any Arval cards”, and will “not pay on your behalf any Merchant Service Charge fees relating to any Arval Cards”.
So if retailers want to accept Arval Cards after 31 October they will have to deal directly with Arval, and soak up the extra costs.
As an added sweetener, BP has offered retailers a reduction on their fuel purchase price if they enter into an agreement to only accept BP branded fuel cards and selected partner cards at their site. The cards in the exclusivity agreement are BP PLUS, BP PLUS Bunker, BP Agency, Shell Agency, Totalcard Commerical, Totalcard Fleet, Agip Routex, OMV Routex, UTA and DKV.
Retailers, who were told the discount would be applied off invoice, have expressed anger and concern over the move.
Andrew Lawrence, who runs independent group Lawrences Garages (London) Ltd, said: “I’m very concerned about the loss of Allstar trade and the effect on profitability. I’m waiting for advice on what to do. I think most dealers will probably sign but a lot of dealers, like me, accept other cards and of course that’s something we have to consider.”
Paul Sykes, MD of Huddersfield-based Shaws Petroleum Ltd, said: “While I have no sympathy for Arval, it’s extremely worrying that we may lose 10% of our business. If we keep accepting Arval cards, we’ll need a separate system for swiping the cards etc. BP is saying it is our choice, but there are so many hurdles in place. I think Arval has left BP with very little choice - I just hope Arval can come to the table and discuss this.”
In a statement, BP said: “From 31st October 2008, Arval cards will no longer be accepted at BP operated sites. BP branded sites operated by independent dealers may still accept Arval cards after this date.
“The decision to end the relationship between BP Oil UK Limited and Arval after a long partnership was a particularly difficult one, but necessary in the current business environment.
“We apologise for any inconvenience this may cause to our customers and Dealers.
“Dealers should be aware that this action does not affect the acceptance of all other BP Fuel cards and in particular BP PLUS, BP PLUS Routex and BP Agency; these will continue to be accepted at all BP sites across the UK.
“Finally BP continues to be committed to providing for the fuel needs of our customers. Our longer term plans therefore reflect our commitment to our customers and Dealers over the long haul.”