Oil companies are beneath stress to return to the rescue of gasoline retailers, who’re struggling due to the extra expenditure they’re incurring because of load shedding and losses on their gasoline stockholding when petrol costs lower.
The retailers declare they’re additionally not absolutely compensated within the gasoline worth for the price of debit and bank card gross sales.
Cassim Kharbai, who co-owns two Engen franchise gasoline filling stations and sits on advisory panels for the vendor community, mentioned an evaluation of the affect on gasoline sellers of working a generator up to now 13 months confirmed that this value from about R145 000 as much as R257 000 for the 12 months.
Kharbai careworn these are new prices and there have been additionally extra prices to take care of and repair turbines.
Catch-22
The gripe from the service station community is that though load shedding is a authorities and nation drawback, Engen and different oil companies profit from secure or increased gasoline gross sales however the gasoline sellers are bearing the price of working turbines throughout load shedding, he mentioned.
“It’s an absolute loss to run a shift from midnight to 5am. There is nothing happening. That is what dealers are up in arms about. They [oil companies] aren’t giving us the option to close between those hours,” mentioned Kharbai.
“However, it becomes a security risk if you are in total darkness and your site is closed.”
He added that discussions with the oil companies about websites remaining open 24/7 are ongoing.
Owners footing the invoice
South African Petroleum Retailers’ Association (Sapra) chair Henry van der Merwe on Monday confirmed that gasoline retailers are beneath stress due to generator-related prices, with the price of diesel for turbines and the working value and repair charges now being taken from the underside line of service station homeowners.
“Due the character of our enterprise we’re obliged to remain open as we provide gasoline to important companies equivalent to SAPS [SA Police Service] and safety companies.
“Our electricity bill doesn’t decrease as a result of load shedding and I am not aware of any oil company that is remunerating their dealers to compensate for their loss,” he mentioned.
“The dealer councils are having these negotiations with their oil companies.”
Solar?
Kharbai mentioned gasoline sellers are additionally dissatisfied with the method of oil companies to photo voltaic vitality at websites.
“Dealers are prepared to make the capital investment in a solar solution but the oil companies are reluctant [to let them] because they don’t own the property … the asset belongs to the oil companies.”
He added that many Shell and Engen websites have photo voltaic panels on the parking canopies however this leads to minimal financial savings to gasoline sellers, with the oil companies taking the complete good thing about the photo voltaic vitality saving on the premise that they made the funding and are subsequently utilizing it as one other earnings stream.
“We are hot on their heels in that they should allow dealers to benefit from the solution if there is no relief coming from the oil company side towards funding the cost of using generators as they are they only ones gaining because fuel sales haven’t dropped but the cost to do business is borne totally by the dealer as opposed to the oil company,” he mentioned.
Fuel worth decreases add to retailers’ pressures
Kharbai mentioned these extra prices have added to the burden on gasoline sellers due to losses ranging from R80 000 to as excessive as R200 000 a month on their stockholding when the gasoline worth decreases.
“The loss in December was R2.06 per litre, which is greater than you make on gasoline.
“On common sellers will make about R1.70 per litre on gasoline. That is your vendor margin for a franchised web site. For a non-franchised web site it should be nearer to R2.00 per litre.
“On diesel, the loss was as excessive as R2.81 per litre and December was the month once we actually began feeling the affect of the load shedding and the generator prices to maintain the websites working had been R30 000 to R90 000 for the month.
“It’s good for business if the [fuel] price comes down but the cost to do business at the moment is what is really taking its toll on the network,” mentioned Kharbai.
Van der Merwe confirmed that the lower in gasoline costs in December and January had a critical affect on sellers as a result of they needed to promote their gasoline stockholding after the worth lower at a loss.
“Depending on the turnover of particular person websites, they get one to 2 deliveries per week. The vendor has to promote gasoline at a loss from the primary Wednesday of the month till [their] subsequent supply.
“The oil companies will take motion when you run dry earlier than your subsequent supply. The resolution is that oil companies ought to do worth forwarding and scale back the worth earlier earlier than the primary Wednesday of the month or inventory on consignment, then the oil firm takes the chance.
“The problem for dealers is that when it is stock on consignment the dealer earns less margin in terms of the regulatory accounting system [RAS],” he mentioned.
Attempts to acquire remark from Engen, Shell and Astron Energy, the brand new model identify for Caltex, and from the Fuel Retailers Association (FRA) had been unsuccessful.
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SA Petroleum Industry Association (Sapia) government director Fani Tshifularo mentioned these points haven’t been delivered to his consideration and believes it’s because Sapia primarily offers with wholesalers, not retailers.
More challenges …
Kharbai mentioned the fee prices on debit and bank card transactions is one other main challenge negatively impacting sellers.
He mentioned this value relies on the sellers’ turnover however on common a small web site can pay R25 000 fee a month on these transactions.
Van der Merwe mentioned the bank card value is a big excellent challenge however no one appears to want to become involved in resolving it.
He mentioned the problem is that sellers are usually not remunerated when it comes to RAS for debit and bank card transactions and Sapra is concerned in discussions with banks, the Reserve Bank, and the Department of Energy.
“Dealers are paying a share of the gasoline worth as a price to banks. The defence of the banks is that it’s the interchange price of Visa and Mastercard and so they can do nothing about it.
“But I am of the opinion that the banks are making unfair margins and that is where they are getting the money for their loyalty programmes,” he mentioned.
Van der Merwe mentioned the answer to this challenge is that buyers ought to pay the price if sellers are usually not remunerated when it comes to RAS or the vendor ought to pay a set transaction value per transaction and never a share of the price of the transaction.
Tshifularo mentioned Sapia is conscious that retailers have been elevating the problem of bank card prices that aren’t absolutely reimbursed.
“The DMRE [Department of Mineral Resources and Energy] has been promising to do something about it but it’s not an issue that we will be dealing with at Sapia level.”