Is this price fixing?
If you give everything away you’ll get plenty of footfall... but no profit, says Paul Ghuman who runs Pentagon Service Station in Derby.
He says: "The major oil companies are getting very greedy and driving our fuel margins down to 1ppl. They are doing this by cross acceptance of the fuel card agreements they have. Now when you sign the fuel supply agreement, you have to sign to accept their fuel cards. With Texaco (Valero), you must accept the Texaco Fast Fuel card, Shell Euro card and the BP card and you get 1.36ppl. With the Shell card 1ppl. Every day more and more retail volume is transferred over to a bunker fuel sale. On top of that you have all the other bunker cards: Key Fuel, UK fuel card, Morgan fuel card, Jet card too many to list. They even pay under 1ppl. What they are doing is sharing our margins with the customer and themselves. Now my fuel sale is 70% bunkering and 30% retail."
And Paul believes that the relatively recent move of cross acceptance (which means, for example, that anyone can use a Shell card at Texaco or wherever, and vice versa) amounts to collaboration and anti-competition business practice.
It is true that when these cards were introduced some 40 years ago (just before Paul opened for business) it was a different picture. "Wages then were around £2.65 an hour. Now the minimum wage is £6.50 and I pay more than that so wages have tripled. But the commission on cards is still the same."
He is totally fed up with the reductions you see everywhere from telephone top-ups to manufacturers’ growing habit of price-marking products.
But, above all, he questions the legality of these cross-acceptance agreements, and fears that unless something happens soon, a lot of retailers will go out of business.
It does seem very short-term thinking on the part of the oil companies. Even with them pulling out of retailing, they are very bound up with the future of the indies. And they know, better than anyone, how little retailers make on fuel.
It’s a message that needs to get across, so who might step up to the plate? Paul has already spoken to the PRA and is waiting for someone to get back to him. Meanwhile, I suggested that he goes to his MP. In fact, I suggest you all do. There is no better time. MPs are all raring to go right now. A good cause, like yourselves, coupled with a whiff of collaboration among those huge oily brand names should get MPs seeing themselves in the headlines in a very good way.
They do seem to be collaborating, but is it collusion?
Free cash withdrawals but no cash
Mohammed Nabi, who trades as Mayland Garage on the coast near Maldon in Essex, was so keen to offer a free-to-use ATM service to his customers that he turned down Payzone’s deal of charging users £1.85 a go on its Cashzone machine in favour of paying a rental fee of £60 a month instead. It is very popular and brings in lots of customers. There are caravans nearby so the machine is much in demand during holidays.
When he rang me just after the early May Bank Holiday, he was tearing his hair out.
"Since Cardtronics has taken over the service it’s been the same every Bank Holiday. When the money runs out, they don’t come straight away. They can monitor it so they know. It’s been empty now for seven days!" He says that calling them up didn’t seem to speed up the service.
I contacted Cardtronics and a Cashzone spokesperson replied: "We have refilled Mr Nabi’s cash machine and we apologise to him and his customers for the inconvenience caused by the temporary lack of cash access. We are glad to hear that the ATM is popular and helps attract people to his store. We are constantly working to provide the best service possible, and would like to thank Mr Nabi for giving us the chance to correct this issue, which we did immediately."
I rang Mohammed to make sure he hadn’t run out again and he said no, it was now fine... a case of so far, so good. But, as this was being written, another Bank Holiday was looming.
Move over, now Rover
There has been quite a lot of entertaining stuff written about the future of driverless, ’thinking’ cars. Much of it has concentrated on ethical situations fox runs into road and what option does the car take? Brake, cause pile-up, swerve, or kill the fox? Then there’s our weather, bad roads, humans all over the show doing unpredictable things.
But they are coming, these robots. Google reckons its driverless car will be mainstream in five years; Apple and taxi app Uber are investigating, and there are umpteen tests up and running in Britain right now.
The average driver in England spends 235 hours a year driving. It won’t come as a surprise that a lot of people actually like driving. What people don’t like is other drivers and jams. The petrol heads won’t be easily convinced because the cars will, out of necessity, be slow, and from some of the designs I’ve seen, there won’t be a spare steering wheel you can grab when you disagree with the plugged-in brain chugging you along. They don’t look like status symbols either, more like milk floats. And that pod decked out in the Union Jack looks like a jumped-up vacuum cleaner.
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