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BS: Petrol stations

Gurney 02 Nov 07 - 01:40 AM
Ebbie 02 Nov 07 - 02:17 AM
Liz the Squeak 02 Nov 07 - 03:03 AM
George Papavgeris 02 Nov 07 - 03:50 AM
JohnInKansas 02 Nov 07 - 04:44 AM
Gurney 02 Nov 07 - 06:06 AM
Big Phil 02 Nov 07 - 07:27 AM
GUEST,strad 02 Nov 07 - 08:36 AM
George Papavgeris 02 Nov 07 - 10:50 AM
John MacKenzie 02 Nov 07 - 11:11 AM
Irene M 02 Nov 07 - 11:48 AM
Liz the Squeak 02 Nov 07 - 08:41 PM
Backwoodsman 03 Nov 07 - 11:34 AM
GUEST,leeneia 04 Nov 07 - 01:06 AM
Mr Happy 04 Nov 07 - 01:15 AM
Liz the Squeak 04 Nov 07 - 02:32 AM
JohnInKansas 04 Nov 07 - 02:39 AM
Gurney 05 Nov 07 - 01:05 AM
Rowan 05 Nov 07 - 01:27 AM
JohnInKansas 05 Nov 07 - 02:47 AM
Rowan 06 Nov 07 - 01:19 AM
JohnInKansas 06 Nov 07 - 02:26 AM
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Subject: BS: Petrol stations
From: Gurney
Date: 02 Nov 07 - 01:40 AM

All our locally owned, private fuel stations/garages have closed, eight of them, leaving only wholly owned stations of the big fuel brands.
Half of them still run the workshops, but have taken out their tanks.

When I asked the one I deal with most, he assured me that it was costing him money to sell fuel as the profit margin was so small and compliance costs so big. He was buying from an international company.

Cynic that I am, I suspect that we are in for an astonishing price rise when the big companies have a monopoly. We have had roughly a 60% price rise in the last 18 months already.

This is in New Zealand. Is the same happening where you are?


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Subject: RE: BS: Petrol stations
From: Ebbie
Date: 02 Nov 07 - 02:17 AM

Did they perhaps recently ban smoking? :)


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Subject: RE: BS: Petrol stations
From: Liz the Squeak
Date: 02 Nov 07 - 03:03 AM

It's been happening here in the UK for the last 10 years or so, helped by the legislation that allowed supermarkets to sell fuel. When it was a local petrol station taken over by the supermarket, it was fine, but now they've built huge, out of town shopping centres and the petrol goes there. The smaller garage is then closed as not cost effective.

From where I live, in east London, it is over a mile to the nearest petrol station in all but one direction. The only reason that petrol station is still there is because that road goes west, into London and is one of the first stations you come to when heading east out of Central London.

Recently I had to drive for 23 miles through south west London with my petrol gauge showing "just the fumes left" before I found a petrol station, just in time.

LTS


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Subject: RE: BS: Petrol stations
From: George Papavgeris
Date: 02 Nov 07 - 03:50 AM

A number of different things here, LTS. First, it is my view (and as far as I know also the Govt's and the oil majors', which I guess doesn't put me in good company!) that most of England is "overpumped", with an average distance anywhere of <7 miles from a garage (from BP's surveys). To expect a petrol station within half a mile of one's home is decadent, I say. Remember, the increased fuel efficiency and tank capacity of today's cars (compared to the 60s and 70s) means fewer visits to a garage on average. A more logical distance would be about 10-15 miles, as the "red light" nowadays means you have a good 20-30 miles left in the tank, and often more than that.

Now Australia is not short of space, right? Yet you will not find a petrol station for miles, in Canberra, its capital. They have them all in the suburbs, well spread out. As for the motorways, in England you get an average of about 15-20 miles between petrol stations - in Australia you can go for 70-100 km without finding one, as I remember to my cost. Scotland and Wales are less over-pumped by the way, due to the lower population density.

As for the profits, do the maths. Even with crude at $100, the cost of the raw material represents less than 10% of what you buy from the pump. Another 20% or so goes to the refiners. A further 15% or so to distribution. The garage owner usually creams 10% (and that's with the oil company paying for his advertising, his forecourt equipment, his shelving in the shop etc) - and the remaining 45% is tax. Money for nothing.

So when the prices go up, work it out who profits the most.


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Subject: RE: BS: Petrol stations
From: JohnInKansas
Date: 02 Nov 07 - 04:44 AM

Recently I had to drive for 23 miles through south west London

On one trip from Seattle to Wichita, with a new vehicle so I didn't yet know how accurate the gage was, we hit "time to fill up" on the Interstate and started looking for a pump. It was night time, and a sleet storm had blown in, with intermittent fog separated by patches of snow/sleet/rain for 170 miles before we found something open.

That was about 12 years ago and I'm still trying to "unpucker" from the tension of thinkin' about LiK havin' to walk to look for gas and wonderin' how much she could carry. Wasn't 'nuff traffic for her even to wave some flesh and hitch a ride.

John


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Subject: RE: BS: Petrol stations
From: Gurney
Date: 02 Nov 07 - 06:06 AM

Perhaps I didn't make my point clear. It is the garages that are pulling out their tanks and pumps, not the petrol stations owned and operated by multinationals. Often these garages are NOT closing the repair workshops, so that part of the business must be making a profit.
These small businesses operate at no cost to the big outfits, and are often situated where they get little passing trade, selling fuel as an adjunct to their repair shop, unlike the big outfits, who tend to operate on the main roads, do no repairs, just sell petrol and little else that is vehicle oriented, mostly sweets, drinks, and creature comforts like coffee.
So, if an established garage in a quiet area can't make a profit on petrol bought from a multinational, and the multinational CAN make a profit on an identical product sold to ITSELF in a newly-established site where it pays bigger rates, and pays a workforce just to pump the stuff, I thought I smelled something sinister in the wind.
Sure as eggs, Esso is not going to send someone out to help you if you get stuck.


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Subject: RE: BS: Petrol stations
From: Big Phil
Date: 02 Nov 07 - 07:27 AM

Fuel at around 97/98 pence per litre. 63.7 pence per litre TAX and VAT at present here in the UK. Bloody ridiculous.


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Subject: RE: BS: Petrol stations
From: GUEST,strad
Date: 02 Nov 07 - 08:36 AM

Lucky you, Big Phil. We're paying 109.9p/litre for petrol in Shetland and 67.9p/litre for LPG. Someone somewhere is making big bucks out of us.


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Subject: RE: BS: Petrol stations
From: George Papavgeris
Date: 02 Nov 07 - 10:50 AM

BP is - they more or less "own" the pitch in Scotland.


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Subject: RE: BS: Petrol stations
From: John MacKenzie
Date: 02 Nov 07 - 11:11 AM

Well I have a 5p off a litre ticket from Tesco's from our last shop, and I'm going down complete with my 3 X 25 litre jerry cans on Monday. Diesel has been over £1 a litre in our village for 2 months.
Giok


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Subject: RE: BS: Petrol stations
From: Irene M
Date: 02 Nov 07 - 11:48 AM

Last "petrol shortage" we had, one bright spark down the road filled a wheelie bin at the filling station, and put it down his cellar.
'Course, the petrol ate through the plastic, filled the house with fumes and soaked away through the cellar's brick floor. They thought at one point they would have to demolish the whole ruddy terrace!
What I can't get my head round is (a) filling and then wheeling the bin home and (b) getting the filled bin down the cellar steps.


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Subject: RE: BS: Petrol stations
From: Liz the Squeak
Date: 02 Nov 07 - 08:41 PM

I can appreciate that 23 miles in London and 23 miles in Australia have no comparisons, but I'm talking about 23 miles of built up area. 23 miles of continuous buildings on a major road out of the capital, through several areas that have not been known for their kindness to white, 'middle class' women. I've driven through freezing fog, aquaplaned across 3 lanes of traffic, had a tyre burst at speed but I've never been so nervous in the car as when driving through particular areas of London. It's for times like that, mechanical failure, whatever, that we have the AA and the RAC, Green Flag, Britannia and other car rescue companies. Mostly they are very good and will come out with a can of petrol, especially if you're a woman alone in the car or with a child.

LTS


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Subject: RE: BS: Petrol stations
From: Backwoodsman
Date: 03 Nov 07 - 11:34 AM

You could always move to The Backwoods, Liz - no such problems with the natives here! :-) :-)


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Subject: RE: BS: Petrol stations
From: GUEST,leeneia
Date: 04 Nov 07 - 01:06 AM

We lost our family-owned station because the operator didn't want to pay to pull the tanks and clean up the spilled gasoline that gone out over the decades.

Environmentalism has its costs.


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Subject: RE: BS: Petrol stations
From: Mr Happy
Date: 04 Nov 07 - 01:15 AM

Been some hoohah in the mejah lately about folk using agri pink diesel in their cars instead've regular.

As someb'dy above said, it's the gov't needing to extract their 'money for nothing' revenue.

Guess they need extra dosh to pay for all these wars ?


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Subject: RE: BS: Petrol stations
From: Liz the Squeak
Date: 04 Nov 07 - 02:32 AM

They'll regret it in the end... regular use of agricultural grade red diesel in cars leaves irreparable damage to some of the more expensive parts so I'm told.

LTS


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Subject: RE: BS: Petrol stations
From: JohnInKansas
Date: 04 Nov 07 - 02:39 AM

Relative to the original question:

There have been virtually no "small stations" that combine service and repairs with selling fuel in most places anywhere near where I've lived for many years.

One or two stations have continued to offer "full service" fuel service with perhaps oil and filter changes, but little else, in my current home town. They've generally charged an extra cent or two on gasoline (petrol), and about double for an oil/filter change, and cultivated the "little old ladies"1 who thought it worthwhile to pay the extra for a bit of attention that went with it.

1 In this case "little old ladies" is a mental state, not an age or sex thing. "LOLs" come in all sexes and ages, and it's a "term of endearment" rather than something having the simply implied meaning.

Nearly all "gas stations" have added "convenience items," either by redecorating/rearranging existing facilities or by being replaced by special-built new facilities; but this process has occured over a period of decades rather than months or years. Soft drinks and cigarettes have been principal "items of convenience," with a gradual addition of "truck stop snack items" at many.

Fuel suppliers have been traditionally split three ways:

1. Tradional "branded" fuel stations like Shell, Citgo, Texaco, Phillips66, etc.

2. Convenience store chains that "sell fuel out front" such as Quik Trip, Quick Shop, Stop-N-Go, Cum-And-Go, etc.

3. Store-fronts including grocery and "hard goods" outlets like Dillons, Safeway, Kroger, Walmart, etc who have added pumps on the fringes of their massive parking lots, frequently selling fuel as a "loss leader" to attract customers.

We have had a round of closings and/or "changes of identity" for a couple of the "branded fuel" stations recently. Usually this is a matter of a corporate takeover/selloff and often, after a few weeks of shakeout, many of the stations may return to "business as usual" but "under new management" and usually with at least some increase in prices and/or decrease in quality/service. This is in the "s**t happens" ("guano recurs" if you're batman) category, and goes on intermittently depending on when the investors' surplus of money overwhelms their market sense.

There appear to be very few stations actually owned and operated by the major oil companies. It's difficult to get statistics on this, but it looks like the majority are "franchises" that operate independently under "distributor contracts" with the majors. We've seen quit a few in my neighborhood who've dropped their franchise and "gone independent" over the past decade, so it appears that control of the retail outlets by the major refiners is "loose" to a degree.

Half of them still run the workshops, but have taken out their tanks.

Basically, that's what happened here 30 (or maybe it was 40) years ago. A lot of established fuel sellers were hit with high tank maintenance/replacement costs due to new standards, and decided to just fill the tanks with concrete and (a.) get out of the fuel business or (b.) move to a new location where the traffic was better anyway.

There was a lot of relocation, and quite a bit of replacement, but if there's a market for fuel there likely will be a pump to feed it - eventually. While there's a transition in progress, there may be quite a bit of inconvenience for some; but it shouldn't be hard to find "alternate supplies" and learn to keep the tank a little further from the bottom until you (and the market) have adjusted.

While there quite likely is a "conspiracy" to extort more out of the consumer, it's unlikely that the closings that you're seeing in NZ are something that the extortionists could arrange. (Unless your market is a lot different than here.)

John


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Subject: RE: BS: Petrol stations
From: Gurney
Date: 05 Nov 07 - 01:05 AM

It may be, John. There is a total population of 4 million here, more than half living in Auckland. We have the big firms, Mobil, BP, Shell, Caltex, and one largish supposed independant, Gull, and one small independant, GAS, both of whose prices are in line with the big boys. I haven't worked out how many refinaries we have, just one, I think. The independants import ready-refined.
Monopoly used to be the order of the day, for virtually everything imported. It was government-ordained by use of import licences once, but things have loosened up a lot in the last 15 years.

My suspicion was aroused by the type of closures happening. As I implied, the mechanics and other employees in the garages used to man the pumps as required, but the big outfits have 'specialists,' or often nowadays, it is self-service.
The tanks are being removed and sold, for re-use in at least two local cases, so they must have been in good condition.


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Subject: RE: BS: Petrol stations
From: Rowan
Date: 05 Nov 07 - 01:27 AM

John, when you wrote
"the majority are "franchises" that operate independently under "distributor contracts" with the majors"
you would be describing the situation In Oz if you also put "independently" into quotation marks.

We have the same majors as Gurney's NZ and the main threat of the supermarkets' offerings of docket-discounted fuel is to the independents, who are not associated with the NZ independents. And, because our markets are a lot smaller than those in the US, their prices seem to rise and fall in remarkable concert there is well-founded suspicion that conspiracies are involved. Otherwise, much of the scene here in Oz seems to have some similarities to your description in the US as well as some that Gurney describes in NZ.

Cheers, Rowan


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Subject: RE: BS: Petrol stations
From: JohnInKansas
Date: 05 Nov 07 - 02:47 AM

The "lock-step" price changes don't necessarily mean that there's a conspiracy in the traditional sense. When the retail operators are forced to operate with very low profit margins, and can't raise their prices because of widespread/interchangeable competing operators, everyone must sell at the lowest reasonably common price, or face exclusion from selling anything.

When "someone" raises prices, it's a betting game about whether you can raise yours and others also will follow, but with marginal profits, often the whole retail market jumps onto any rise.

Eventually, someone will drop back to a lower price to try to move more volume, and everyone else will be forced to follow.

The retail market instability comes from conflicting trends: you can sell more, so you can make enough with a smaller markup, if your price is lower than others; but the others will follow until they force your "market share" back down to where the margin - at lower volume - puts you near to (or past) unprofitability.

In some retail markets, advertising can be used to create "market identities" for which you can charge a little more, while the "anonymous others" have to sell for a little less. This tends toward more stable prices, perhaps(?), even though it makes little rational sense.

People do not generally accept that one brand of fuel is sufficiently better than any other fuel to justify paying more, so "brand loyalty" doesn't work - except perhaps in a few niche markets.

Unskilled/semi-skilled labo(u)r is about the only other market I can think of where this "dance between equal/interchangeable partners" works as clearly. "There ain't no job security under the golden arches," so everyone is always looking for the better job at the newest grand opening. (There's not much employee loyalty either.)

John


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Subject: RE: BS: Petrol stations
From: Rowan
Date: 06 Nov 07 - 01:19 AM

"The "lock-step" price changes don't necessarily mean that there's a conspiracy in the traditional sense. "

That's basically what the ACCC (Consumer and Competition Commission) keep telling us, John. You're right, but that doesn't allay all traces of suspicion.

Cheers, Rowan


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Subject: RE: BS: Petrol stations
From: JohnInKansas
Date: 06 Nov 07 - 02:26 AM

From my first post:

While there quite likely is a "conspiracy" to extort more out of the consumer, it's unlikely that the closings that you're seeing in NZ are something that the extortionists could arrange

As some wiseass person once said, "just because you're paranoid doesn't mean they're not out to get you."

It just seems unlikely that the particular effect cited is an intentional result of something the robber barons are doing.

John


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