Petrol Prices - AGAIN arrrrgh

Jumpy

But..... thats..... but you....


You have just killed this thread now. Happy?

Bandara

Jumpy wrote: »

But..... thats..... but you....


You have just killed this thread now. Happy?

the facts tend to hurt sometimes.


:P

whiterebel

Hammertime wrote: »

for the hundredth time on boards I'll say this.

PETROL STATIONS DO NOT CARE IF YOU BUY PETROL FROM THEM OR NOT, WE MAKE ESSENTIALLY ZERO MONEY ON, WE HAVE TO PAY FOR IT IN ADVANCE AND IT IS A NIGHTMARE PRODUCT TO STOCK.


All we make money on is the shop, petrol is in simple terms a loss leader to get you into the shop.

I repost (again) the follow explanation that I wrote to list exactly how it works in this business.

---

The entire topic of fuel prices and profits on fuel is so full of clueless people who are spewing out fantasy numbers that they heard on the radio, in the pub or in some rag like the evening herald written by a journalist who hasn't the first iota about what he is writing about.

If people really want to know about fuel margins and profits I will outline them here. People like Clare-guy who obviously know nothing about the subject run around screaming at the top of their voice that we're all being robbed. We're not, and thats an fact.

Ok, I'll cover the independantly owned stations as they make the most out of fuel.

I built my station within the past 7 years on a green field site for €2.3m in total, its a very nice site, busy and does close to 4.5 million litres a year, which in fuel sale terms is very good. (The majority of sites do about 2m liters a year in Ireland).

I have a very good deal on fuel as I have a strong bargining position with the fuel companies due to the volume I do. On Unleaded I have a 9.5c rebate off invoice.

Before people get excited that rebate is off the list price of the fuel, which we never sell at, we always sell about 5 or 6 cents below cost and the rebate structure brings it back into line and also gives me my profit.

So for the example of my Unleaded rebate, the list retail price I'm given is €1.309 a litre (I work off 3 decimal places), however I am actually selling the product at €1.259 a litre (so I'm losing 5c a litre off the list price). I buy the fuel for €1.081 per litre, the vat is added on and I'm paying a wholesale price of €1.309 a litre.

Still with me? Ok, at month end my total litre sales are added up and I apply for the rebate for the months sales. As previously mentioned I get a fixed unleaded rebate of 9.5c on petrol so if I do 300,000 litres of unleaded a month I'm now due a credit note of €28,500, of that amount exactly €15000 just makes up for the below cost sales I've had to carry for the month so my incl vat profit is €13,500, take the vat off that and I'm looking at a Gross profit of €11157. Now, out of this comes the following average monthly fees,

Forecourt maintenance contract - €541 a month
9 hours a week staff member to clean forecourt - €89.05
Fees to Bank for Laser/CC payments for fuel - €790
Blue Paper / Gloves - approx €75
Drives offs/stolen fuel last month €454.10
Fire extinguishers and other health and safety requirements €92
Site insurance / public liability etc €461

So total costs to keep the forecourt operational each month € 2502

less Gross Profit from above of €11157 = a €8655 Net Profit.

€8655 x 12 = Yearly Profit of €103,860 on €4,532,400 of Sales = retained margin of 2.29%.

Show me ANY other line of business in this country that survives on a margin of less than 2.5%. I have not even gone into the fact that When we get a delivery of fuel we have to pay for it immedatialy so we are always financing the product before we sell it. And we have to wait a month to get our profit and the cover for the below cost loss we make selling it.

btw Clareman, the person who said they make more on phone credit is not talking bullsh!t, the lowest margin on credit is 4%, which is 38% more margin than the one on fuel sales.

And before anyone says that making €100,000 a year is a lot of money, its not. I have a loan of €2 million to repay over 15 years. you can do the sums on that yourself.

Just to clarify, I'm not hear moaning about not making a living, I make a very good living, but what I'm saying here is that petrol does not contribute to it. The shop is the only area that I care about, In actual fact the dream scenario is never to sell a single liter of fuel and the same amount of people still come in to buy goods in the shop. Fuel sales are simply an attraction to lure people in.

The fact is I make more on a apple for 60c than I do on €30 of fuel.

So folks, next time you feel like abusing, cursing at or calling your friendly Service Station attendant a "f**kin robber" have a think about it first.....



p.s. Anyone want to buy an apple?

So take out Cleaner and Gloves as most garages are manky. You built a petrol station in the last seven years and you didn't put in automated pumps to cut down on staff and drive offs?

If you were charging €1.25 last month you are one of the cheaper ones, its your bretheren charging €1.37 and the like that are getting people's backs up

Also, while we're at it - Presumably you are NOT one of the garages that jacks the price the minute theres disruption to the supply in Nigeria or Nicaragua? Cos my local stations most certainly are. Because what you're saying is that you pay up front, these garages are then hiking the price and this is where the rip-offs are occuring. If you're not as bad as the rest fair play to you, but you're better off defending yourself rather than the industry as a whole. Personally speaking the system is set up badly and the majority of the rip-off comes from having the distribution companies in the middle of it, basically setting whatever price they want and nobody asks them any tough questions.

FGR

I tend to blame the distrubutors more so than the retailers. I know a number of retailers who have received quotes with differences of up to 5c per litre on supplies.

Hammertime has hit the nail on the head - they make the money in the shops but it's not the individual garages that make money on the fuel.

FGR

whiterebel wrote: »

So take out Cleaner and Gloves as most garages are manky. You built a petrol station in the last seven years and you didn't put in automated pumps to cut down on staff and drive offs?

Didn't the UK body representing UK retailers agree to install those automated machines within the next two years? I've seen them in the US and are a brilliant way to avoid drive offs.

Swipe Debit/Credit Card before use? Excellent. There's really no excuse these days..

Bandara

ForegoneReality wrote: »

Didn't the UK body representing UK retailers agree to install those automated machines within the next two years? I've seen them in the US and are a brilliant way to avoid drive offs.

Swipe Debit/Credit Card before use? Excellent. There's really no excuse these days..

Emmmm there is a huge excuse.

If I (and the other forecourts in the country) installed pay-at-pump technology then I would be out of business within a year.

It has been trialled at the Texaco forecourt in Spawell, the most state of the art forecourt in this country. And they can't make money. Can't make money at all.

You see no one comes into the shop when they can pay at the pump, and as I have explained abaove if they don't come into the shop then there is no shop and no forecourt.

It will not happen in the next ten years. The government continue to refuse to allow planning permission for sites off the motorways in this country and until then this technology cannot be rolled out.

Damien360

ForegoneReality wrote: »

Didn't the UK body representing UK retailers agree to install those automated machines within the next two years? I've seen them in the US and are a brilliant way to avoid drive offs.

Swipe Debit/Credit Card before use? Excellent. There's really no excuse these days..

Those are an asset purchase and have to be paid for. The economics over a few years make sense but the seller of these wants his money on sale and not a few years later. It's a cost.

Hammertime: I read all of your long post and I see your point but it fails to address the fact that many, if not all garages appear to believe that they purchase directly from the stock market and price the fuel every day accordingly. This is the rip off that everyone can see. Even your garages could not possibly get a delivery of fuel every single day and is therefore caught by the distributors daily fluctations. Based on the average (your figures hammertime) of 2m litres a year, how many fills would that be on average a month. Give or take capacity of tanks. base on average if there is one.

Bandara

ForegoneReality wrote: »

Didn't the UK body representing UK retailers agree to install those automated machines within the next two years? I've seen them in the US and are a brilliant way to avoid drive offs.

Swipe Debit/Credit Card before use? Excellent. There's really no excuse these days..

Also, 'drive-offs' where a person fills up and drives away on purpose are a dying breed, the term drive off is a generic one used to cover the theft of fuel.

The most common (by far) theft of fuel is people who come into the shop and their car is maxed out or rejected. They then are asked to leave thier mobile phone or something similar as a security until they return to pay the outstanding bill.

As is typical in this country the person then becomes abusive and refuses to leave anything as a security. And as expected they never bother coming back.

I'd estimate only one in ten comes back, and when you ring them to ask them nicely to come back (after a period of two weeks) they don't take very kindy to it.



Sad but true.

[QUOTE=Hammertime;57544242

as I have explained abaove if they don't come into the shop then there is no shop and no forecourt.

.[/QUOTE]

I know you have explained that you make your money in the shop and Im not disputing this but some of the best fuel prices I have seen around the country have been in stations that just sell petrol or have a small garage(Independent mechanic) but no shop. How do these stay in business?

whiterebel

I'm not long back from Florida, and doesn't seem to be the way there. Every place I went was cash up front, or Credit card - but they ALL had shops/supermarkets. If you need something you will go into the shop regardless. Same in France with automated pumps open 24 hours, pay first, after 8pm usually Credit card only, again with shops or supermarkets attached.

quarryman

Hammertime wrote: »

Also, 'drive-offs' where a person fills up and drives away on purpose are a dying breed, the term drive off is a generic one used to cover the theft of fuel.

The most common (by far) theft of fuel is people who come into the shop and their car is maxed out or rejected. They then are asked to leave thier mobile phone or something similar as a security until they return to pay the outstanding bill.

As is typical in this country the person then becomes abusive and refuses to leave anything as a security. And as expected they never bother coming back.

I'd estimate only one in ten comes back, and when you ring them to ask them nicely to come back (after a period of two weeks) they don't take very kindy to it.



Sad but true.

i'd wondered how much that happened. I put €20 in the car once and forgot i had no wallet. Left my phone and came back and paid later, no problem.

How regular do you see it per month per station?

BrianD3

I have never seen a garage put up prices immediately when there is a jump in crude oil prices. I drive over 30k miles a year and pay a lot of attention to fuel prices and how much I'm putting in the car.

So, based on my own experience, I would say that the idea that garages are out to gouge motorists as soon as oil goes up is a bit of an urban myth. Maybe a small number do it but I don't think its widespread and certainly not worthy of all the whinging about it that goes on on internet forums and radio phone in shows.

L1011

BP UK's attempt to reduce drive-offs/no-pays is a ANPR system which doesn't unlock a pump until your reg has been checked against a database for anyone who's done it before. No pay-at-pump.

Except I've a feeling that that is very expensive to install... and it doesn't work right. Every single time I've had to have someone manually override it because it chokes on an Irish format plate!

whiterebel

BrianD3 wrote: »

I have never seen a garage put up prices immediately when there is a jump in crude oil prices. I drive over 30k miles a year and pay a lot of attention to fuel prices and how much I'm putting in the car.

So, based on my own experience, I would say that the idea that garages are out to gouge motorists as soon as oil goes up is a bit of an urban myth. Maybe a small number do it but I don't think its widespread and certainly not worthy of all the whinging about it that goes on on internet forums and radio phone in shows.

Sorry, you either own a garage or you're blind. There are 4 petrol stations within a 3 km radius of where I live and they are all up withing hours of each other. All getting deliveries same day?
And for a subject not worthy of the "whinging about it that goes on on internet forums and radio phone in shows". Matt Coopers show alone is inundated every time the subject comes up.
I drive a similar amount of miles to you and I see it the whole way up the Dublin and Limerick roads from Cork. I was over in England twice in two months a couple of years ago, and while the price here fluctuated daily, it never moved in the UK

L1011

Another 30k+ miles a year driver and I don't see prices increasing instantly when oil rises either.

Stations matching each other is entirely different.

bazzachazza

On a recent trip to Donegal for a wedding we stopped off in the royal county for lunch in a fast food outlet(name witheld)I walked next door to the petrol station to get a paper and in the 2-3 mins i had been in Supermacs ordering the food the petrol station had put fuel up 5c and this was at 1pm.

I couldn't believe the cheek they had in doing it whilst there were people pulling in to fill up and its a very busy petrol station .

L1011

Do you expect them to wait till theres nobody in the station to raise prices? 24 hour station would make this relatively complex. Has anyone ever seen Texaco Foxhunter empty, for instance?

bazzachazza

They don't change the clocks during the middle of the day.

There is a reason for doing it the middle of the night.

The forecourt was full.

If you walked into a shop and picked up a product that was priced at X amount and in the time it took you to walk to the register with it the price had changed to Y amount would you still pay.

In this case actually put the product into something that it couldn't be easily taken out of if you didn't want to pay for it.

This fuel station isn't 24Hrs.

L1011

bazzachazza wrote: »

If you walked into a shop and picked up a product that was priced at X amount and in the time it took you to walk to the register with it the price had changed to Y amount would you still pay.

In this case actually put the product into something that it couldn't be easily taken out of if you didn't want to pay for it.

The price you'd be paying would be displayed on the pump before you even started filling, so this wouldn't happen.

bazzachazza

MYOB wrote: »

The price you'd be paying would be displayed on the pump before you even started filling, so this wouldn't happen.

True and I get your point from the previous post.

Like Hammertime has previously said a lot of people don't get the Industry I certainly don't claim to fully get it.

Hammertime i see where your coming from.

eth0_

whiterebel wrote: »

So take out Cleaner and Gloves as most garages are manky. You built a petrol station in the last seven years and you didn't put in automated pumps to cut down on staff and drive offs?

I think it's a legal requirement to provide cleaner and gloves at the pumps as petrol is a skin irritant.

Also - i've NEVER seen automated petrol pumps in Ireland, so give the guy a break!!

L1011

eth0_ wrote: »

Also - i've NEVER seen automated petrol pumps in Ireland, so give the guy a break!!

emo fastfuel or whatever its called in Newcastle has them, Tesco's used to, and theres one on the Aran Islands

Think thats about it!

bazzachazza

Are Tesco ones not automated as in they give you the choice of paying at the pump or in the shop.

The fuel station by the Merrion gates in Dublin had/has them the pumps nearest the road cerainly were about 4 years ago not sure if they have been removed. Station is to difficult to get into at times when coming from Booterstown so i havent been there in years.

Most of the pumps in France are automated but there again there just filling stations with no shops.

Also the Autoroute filling stations prices are all the same price throughout the country talk about fixing prices much higher than if you leave the autoroute and fill up. Was handy when we were over there we just filled up either in the morning or evening near the hotels and only put a couple of quid in if we really needed to when on the autoroutes.

L1011

The petrol station by Merrion Gates is no more; and the Tesco pay at pump is gone too since chip and pin came in.

bazzachazza

Ah told ya it had been a while since I had been there. When did the fuel station go it must have been only recently. Could have swore i saw it last time i went past from the parents to work.

I only ever used the Tesco pumps once. They never really worked for me too many people i guess wellying the buttons out of it.

Flyer1

As mentioned here, an example of Florida, EVERY pump is pay at the pump if you wish, or else go in and pay before you pump. There are thousands of fuel places in the states, all operating in a similar fashion, I see no reason why Irish Stations can't follow their example, or is this just another example of how inefficient this country really is.

The place where I regularly buy my petrol is now 115.9 for unleaded, but yet if you go 100 yards up the road, it's 125.9, now that is hardly what you'd call staying in line with the competition.

eth0_

Petrol is dirt cheap in the USA, maybe there's a much bigger profit to be made by petrol stations there, and they don't have to rely on revenue generated by impulse purchases in the shop.

bladebrew

about 3 weeks ago i was driving from cork to dublin then going across the country to clare and then back down to cork,i assumed it would be a good idea to fill the tank in cork (texaco) but then i saw the price of petrol dropped as soon as i left the city,even north county dublin was 2c cheaper!!!

L1011

eth0_ wrote: »

Petrol is dirt cheap in the USA, maybe there's a much bigger profit to be made by petrol stations there, and they don't have to rely on revenue generated by impulse purchases in the shop.

There is basically no taxes on fuel there. There is huge taxes on fuel here - and yet we're still one of the cheapest places to get fuel in Europe...

As goes pay at pump being common in the US - I would suspect the margin on fuel there is far higher. Ireland is likely unique in it being so low - and it shows. Half the stations in the country have gone out of business in ten years despite a massive increase in car ownership. The remaining stations here for the most part need people to use their shops.

Feck knows how the few remaining places where its just pumps survive (Maxol in Celbridge being the only one I know of nearby).