When I was a kid, my mother worked for Shell and that started a long lasting relationship with the fuel industry. I worked for Mobil for 7 years, with three and a half years in Nelson looking after the service station network in the top of the South Island.
It was during this time that I got a deep knowledge and understanding of how the various oil company pricing methodologies worked.
Fast forward a few years when I joined Malcolm at The Buying Group. I immediately saw that we didn’t have a Fuelcard category we could offer our clients so I used my past experience at Mobil to put something together. With my contacts, I was able to negotiate a fabulous discount structure that was significantly better than what any other fuel company was prepared to offer a fledging buying group.
But we had a problem.
We noticed that Mobil was starting to close or sell a growing number of their outlets creating gaping holes within their network. Then the company started a cycle of regular restructures, cutting great swathes of staff from their head office and moving support functions overseas. On top of that, they started reducing their discount structures across the board.
However they weren’t alone by this stage – all of the oil companies had started a similar process and were progressively working through similar strategies.
So Malcolm and I reviewed our options and considered the following issues from a transportation perspective:
- fuel is almost a pure commodity with minimal added value
- clients want the cheapest price
- they don’t want to have to travel out of their way to purchase it
- whilst the above is true, they resist changing oil companies due to the perceived “hassle factor” of filling out more paperwork to open accounts and changing cards.
So we decided to make fuel an exception to our normal strategy of one supplier per category. Instead, we would approach the remaining oil companies to negotiate discounts with the intent of having all the big four available to our members. And that is exactly what I did.
A New Fuelcard Solution
We can now offer discounts with BP, Caltex, Mobil, Petroleum Logistics (who purchased all of Shell’s Marine pumps) and Shell (Greenstone Energy). At the same time, I built a new fuelcard billing platform that enabled us to issue cards from each fuel company, consolidate all our members transactions with the oil companies, and just issue one invoice for each member regardless of which fuel company card they used.
Our members now pick and choose which cards they will use based on which fuel company is cheapest and convenient for their location. And at the end of the month, they get just one consolidated invoice.
We have been tracking the five fuel companies their pricing for years and we know immediately when they change and which fuel company is the cheapest for each region of NZ.
The fact that the fuel companies use four different pricing methodologies only makes it confusing when trying to compare pricing, but we have developed a system that tracks it all.
Unique requirements
Transport companies operate on thin margins and so need to get the best deals on their major spends. This includes fuel and tyres. And besides low pricing, they need to be able to purchase these products in the cities and rural areas they are travelling to.
Our Fuelcard solution has solved these issues.
Examples of products
The range of products that we have helped our buying group members includes
| Fuelcard | Tyres | Safety |
| BP | Truck and Bus tyres | Footwear |
| Caltex | Retreads | Hi-vis clothing |
| Mobil | Call out service | First aid |
| Shell (Greenstone Energy) | ||
| Petroleum Logistics |
Click on the following link to find out more about our Fuelcard solution