This month sees the start of a new fuel supply service targeting independent, unbranded fuel retailers across the South East. The source of the supply is Prax Petroleum, which has been building up to this point for several months, publicising its services including exhibiting at April’s Forecourt Show at the NEC and talking to retailers in order to gauge reaction and interest.
"We’ve had very good feedback from the publicity we’ve done so far," says Neil Robertson, sales director at Prax Petroleum. "People seem very keen and interested, particularly the smaller retailers with one, two or three sites. They may be retailers whose fuel supply contracts are coming to an end, and need a stop gap before they sign up to a new contract. They may be questioning whether they really need a big brand, or want the freedom to go and buy their fuel as efficiently as possible.
"If retailers are just buying fuel from a supplier, they’re probably looking at saving 2ppl. They’re not getting anything else no pole signs, card systems and so on except the fuel. So there’s some pretty big savings to be had."
Robertson believes parts of the market are moving to own-brand, or smaller local brands, where the focus for the retailer is on the ’sharper’ price of fuel. While there is an obvious consumer attraction to forecourts displaying big brands such as BP and M&S, that’s a whole different ball game to where Prax Petroleum is pitching its offer.
"People are very price-driven, particularly the smaller retailers, and that’s where the interest is coming from," explains Robertson. "They might want their own brand on their three sites. They might just want to buy the fuel at the best possible price, and they just don’t see the value in having a big brand.
"That seems to be the main motivator for people talking to us, because we’re offering a straightforward supply service and not necessarily going into contracts."
Robertson accepts that ringing round looking for a good fuel deal on a regular basis can be time-consuming for today’s busy retailers. "Yes, they’re busy, but the chance to save money is a good motivator for picking up the phone to try and negotiate a decent price. But there’s nothing to say we couldn’t offer anyone a contract we haven’t ruled that out. If they prefer a Platts-based contract, that could well be done."
Prax Petroleum also has a flexible approach to size of load, according to Robertson: "Generally we do full artic loads around 37,000 litres. But as long as we can get access to the site, we can drop off anything as small as 5,000 litres. We’re very flexible on the type of deliveries we’re not as rigid as the big majors. We’ll be able to drop off a small amount to one site, and then combine it with a commercial load to someone else. That’s where we can definitely steal a bit of a march on the bigger oil companies we’re able to be much more flexible on delivery sizes.
"The highest importance is obviously the health and safety aspects of the site, and tanker access.
"If it’s a small site, we may well do a risk assessment before delivery, after discussing the matter with the retailer, but chances are it would be a driver risk assessment on the first delivery.
"We don’t own trucks or drivers, we sub-contract everything we’ve got a huge pool of available resources for delivering."
All retailers have to do is set up an account and they are ready to order from the Weybridge, Surrey-based company.
"One thing we’re very cautious of is that retailers must be unbranded and untied," stresses Robertson. "It’s essential that is crystal clear. We can’t be implicated in any breach of contract if they already have a supply contract with someone else.
"We’re just going for the guys who don’t have a brand at all, or they have their own brand.
"People are not so hung up on having a brand, they just want the fuel, a bit like in the commercial market. They can even arrange their own trucking if they want to a bit like in the American model.
"We haven’t ruled out Prax Petroleum branding on the forecourt we’ve put together a few graphics, which were displayed at The Forecourt Show which give us a nice, clean image.
"We are a young and up and coming company, we’re quite nimble and can make a mark. We’ve grown very rapidly currently growing 25% year-on-year in terms of sales and revenue.
"We now have the opportunity to market fuel in the South East up to the south east Midlands, along the M4 corridor to the west of Swindon, and down to the south coast.
"In simple terms, we can offer very competitive spot prices, for anyone who’s unbranded and untied, using our efficiencies in bringing in large cargoes of fuel, an efficient supply chain, with a very secure line of supply."
Prax Petroleum is part of the State Oil Group, which describes itself as one of the leading and fastest-growing independent importers and suppliers of automotive and industrial fuels in the UK. It was featured as the ninth fastest-growing private company in the 2010 Sunday Times Fast Track 100. The company specialises in the supply of diesel, bio-diesels, kerosene and gas oil. It has also started importing gasoline.
State Oil was founded in 2000, by managing director Sanjeev Kumar. He is a successful oil trader, who also had an interest in creating a retail forecourt network in the UK. He acquired service stations and built the network up to more than 20 sites, putting it in the Top 50 Indies listing. The network now stands at nine sites.
In 2006 the company began importing small amounts of fuel, and began supplying the commercial market as well as operating its own retail network. Prax Petroleum was formed.
The commercial business has grown at an exceptional rate, selling to distributors such as GB Oils, Watson Petroleum, and contracts with the Stagecoach Group. Fuel is sourced from all over the world, generally from NW Europe and Russia. Last year it moved into Immingham, and has just agreed a deal to purchase a terminal in Cardiff.
With increased capacity coming on stream on the Thames this month, it is now targeting retailers in the South East.