IN the 21st century it seems we can access most things via the internet – whether it’s buying groceries or houses; seeing what the weather’s like in a holiday resort via a webcam; or simply communicating with the rest of the world via email, chatrooms and suchlike. So it seems only natural that there is now a specialist website dedicated to helping independent dealers run their businesses and giving them a competitive edge.
BigOil.net went live on January 6, and with it the claim that it will become a catalyst for change by bringing much needed transparency to the industry. Using real-time pricing data provided by Platts – the industry’s benchmark price data provider – BigOil aims to provide retailers with a sharp tool with which to make key decisions about fuel purchasing and supply. It generates a pence-per-litre daily petroleum quote from the dollar-per-metric-tonne provided by Platts. From this a number of value added services have been created, including the formation of the Pump Price Optimisation Model, which allows the retailer to optimise fuel margins and create individually tailored models and trend analysis relevant to his site-specific fuel supply agreements.
The founders of the business have long experience in the fuel industry. Chairman Keith Guppy is familiar to many. He joined Elf straight from college and over the years has worked in just about every department – accounts, distribution, commercial – including 10 years on the retail side. In recent years he has worked as sales manager for epos systems company Arciris – a role he will continue on a part-time basis.
Partnering him is managing director Darren Briggs. He was formerly a commercial engineer until a career change in 1997 saw him join Elf (which later merged with Total and Fina) as a dealer business manager at a time when the company was expanding rapidly in the dealer market. His experience also covered spells in shop development, e-business strategy and
POM trading until he left the company last summer.
“POM-trading – which stands for Pre-Optimsation Marche – was a new role covering the agreement of the transfer price between the refining departments to marketing,” says Briggs. “It was a very interesting and political role involving margins, transfer volumes and product prices.”
Hence armed with this insight and experience in all aspects of the industry the pair set about creating a comprehensive service that will help the independent retailer. Fuel margins have always been a bone of contention and the BigOil website aims to ease the pressures by giving retailers easy access to the same information available to oil companies, which has previously only been available to them through an expensive subscription to Platts, or by constant nagging of their supplier. “I don’t want oil companies to see this as a threat – it’s not for dealers to whip round the heads of the oil companies – it’s actually a way of helping the two sides work closer together,” explains Guppy. “There’s a classic cliché the oil companies use, that the ‘cake is only so big’, ‘we can only cut the cake up so much’. This system will prove to the retailer the size of the cake.
“Using BigOil retailers can not only be more precise about their own ordering and making sure they optimise their fuel stocks, but it’s also a way of bringing more openness into the situation. In the past retailers have just had to trust what they’ve been sent by the oil companies. On a Monday morning they will get an email or fax telling them what happened the week before on Platts and they will have just had to believe them – they had nothing to check against. In the test phase we’ve picked up one or two anomalies – mistakes do happen!”
There are four main areas to the website: 1) Platts daily petroleum quotes – it is updated every weekday with graphical data in dollars per tonne and tablet format converted into pence per litre, giving actual trends of what the market is doing. The Platts Market Data updates are emailed and can be texted to mobiles; 2) daily business intelligence reports – provides major oil industry news as well as business news geared towards retailing; 3) pump price optimisation model – tailor-made to the supply agreements for the individual retailer. It gives trends and analysis telling retailers when is the best time to purchase fuel in relation to their contract-specific supply agreements with their oil companies. BigOil claims thousands of pounds a year in savings can be made here; 4) value added services such as insurance, finance and promotional tools.
“We realised from the years spent doing this kind of business that Platts has a major influence on the deal for the independent – it doesn’t really matter what kind of deal he’s on,” says Guppy. “The BigOil website gives independent dealers the same competitive advantage as a major oil company because they’re getting the Platts information and they’re also getting the business intelligence reports telling them exactly what’s happening in the industry. That’s basically anything that’s published in the world in your industry being sourced to their desktop everyday.”