An increased interest in independent forecourts in 2013 could see an increase in forecourts numbers this year as symbol groups and independent fuel suppliers increase investment, while work behind the scenes aims to keep costs down for consumers.
While supermarkets have quickly been encroaching into the fuel market in recent years, around 65% of forecourts in Scotland remain independent. In rural areas especially, the independent forecourt industry plays a vital role in the overall convenience industry. Last autumn, rural forecourt retailers were given a boost when seven areas in Scotland met strict criteria to apply to the EU for a 5ppl exemption on fuel excise duty, however the Petrol Retail Association said this ruling didn’t go far enough. Brian Madderson, PRA Chairman, said: “Whilst any duty reduction will be good news for motorists in these rural areas, it does not even start to tackle the compelling evidence that rural filling stations are continuing to close for business.
It is also important to note that while the scheme will cut fuel prices in the nominated areas, it will only act to bring prices in line with the UK average.” Further to this, the PRA has recently outlined initiatives to the Minister for Energy & Business, Michael Fallon, that would improve fuel supply resilience and encourage investment in petrol forecourts without it costing to the Treasury. Speaking about the UK market, Madderson says: “With 6,000 fewer forecourts than at the time of the September 2000 fuel crisis, and all independents working to minimum stock levels, the UK’s ability to weather supply disruptions has become dangerously eroded. Memories of the fuel stock-outs at petrol stations as recently as March 2012 remain vivid and analysts suggest that recent events at Grangemouth may just be the foretaste for dramatic industry changes ahead”.
The PRA claims that a tanker load of petrol today costs the independent retailer over £50,000, with duty and vat being £30,000 and payable to the supplier virtually on delivery. There are no small or medium enterprises that have to pay so much tax before collecting the income from their customers. The Association argues that with such burdensome cash flow constraints, it is essential that Government enables retailers to utilise the existing EPSS scheme for duty deferment relating to fuel supplies.
Regularising this scheme for forecourts would incentivise these hard pressed retail businesses to hold higher fuel stocks and release funds/assets currently held as fuel payment security for investment purposes. Madderson summarised at the PRA’s recent Regeneration Forum: “We are alerting Government to a real silver bullet that will both stimulate investment to provide more jobs and better facilities for motorists, especially in rural areas. We need the Government’s full support and support from the oil companies to make this happen quickly and effectively.” There is certainly a growing interest in the independent sector. Last year saw Spar and Nisa introduce their own petrol supply – with own-brand forecourts beginning to open. And Phillips 66, owner of the Jet brand has followed up ambitious plans in Scotland with its first big announcement.
The brand has confirmed that five new Scottish sites have joined its network of independent forecourts, taking its total number of sites throughout Scotland to 51. With these sites on board, Jet now holds a 22% market share of the Scottish fuel market and has more branded dealer sites across Scotland than Shell, Harvest Energy, and Murco combined. Towards the end of 2013, Jet highlighted its ambitious growth plans to expand into the north of Scotland as part of a UK-wide target to increase the Jet dealer network by 30%.
The plans are already off to a great start as just a couple of months on, the company has secured three new sites in Moray: Buccaneer Service Station in Bishopmill, New Elgin Service Station in Elgin and Mosstodloch Service Station in Fochabers.
Also strengthening the Jet network in central Scotland are Ravenspark Filling Station in Irvine and Darnleymill Service Station near Paisley, both of which were most recently BP sites. Paul Yates, Scotland Territory Manager at Jet, comments: “We’re delighted to welcome these five forecourts to the Jet brand, especially so early on in our 60th anniversary year. Prior to these sites coming on board, our most northerly site was in Blairgowrie, so it’s great to start this push into the north. We have a very compelling proposition for Scottish forecourts, not least because we believe we offer unrivalled security of fuel supply within the UK thanks to the Phillips 66 Humber refinery in Northern England.” Iain Aitkenhead, owner and operator of the three new Jet sites in Moray, comments: “The decision to move to Jet was a simple one: the dealer package offered stands out from any of the other fuel suppliers I looked into.
As a retailer, it’s reassuring to know that the fuel Jet supplies is refined in the UK and is made to stringent UK standards. My experience so far has been fantastic: from the top to the bottom of the organisation everyone I’ve dealt with has the knowledge and know-how to advise me on what’s best for my business.”
