New APEAMembers

noticed the tanker. Police were everywhere.

There were three of four police cars. They has cordoned off the road already. There were three or four police cars," he said. "The diesel was still running down the road and you could smell the fuel. If that had gone up it would have been quite scary." Derby Road is currently closed between the roundabout and the junction with Vernon Street. Fire fighters hosed the area down while they waited for absorbent granules to be put on the road.

UK, Northern Ireland, Belfast. Illegal filling stations closed

Over 8,000 litres of laundered fuel being sold at knock-down prices were seized at two illegal filling stations in west Belfast. HMRC officers also removed forecourt pumps and equipment at the socalled huckster sites. John McManus, HMRC Operational, Specialist Investigation, said: "Just looking at the premises selling the fuel we have seized, and the price, no-one could be in any doubt but that this was dodgy fuel.Yet some people are willing, to not only tolerate, but also support this openly criminal activity within their community." He added: "We take the unfair and illegal practice of selling illicit fuel very seriously. Genuine businesses should not be undercut by criminals operating from illegal fuel sites. Fuel fraud is not a victimless crime. We will continue to use the full array of sanctions at our disposal against those engaged in the illicit supply, sale or misuse of fuel."

UK, Scotland, Glasgow. Tanker fall death ‘preventable’

The death of a Clackmannanshire tanker driver could have been prevented if a second guardrail had been fitted to his vehicle, a sheriff has ruled. James Hutchinson, 57, from Dollar, died after falling from his tanker at a farm in Leuchars, Fife, in February 2007.

He suffered brain injuries, a broken neck and fractured jaw. He also broke both wrists trying to break his fall. A fatal accident inquiry (FAI) found that even if he had been wearing his hard hat he would not have survived.

The inquiry at Cupar Sheriff Court heard that Mr Hutchinson has been making a delivery at Vicarsford Farm, Leuchars, on the evening of 8 February 2007. His body was found by workers at the piggery the next day. The FAI heard that Mr Hutchinson was an ideal employee with Carntyne Transport Co Ltd, he could be sent to any job with confidence and he was careful and meticulous.

The court was told that his lorry had a guardrail which could be raised at one side of the tanker, but there was no rail on the other side. Sheriff Peter Hammond ruled that providing a double guardrail would have been "the single reasonable precaution whereby his death might have been avoided". Carntyne Transport was previously fined £5,000 over the death for breaching health and safety rules. Since the accident, the Glasgow-based firm has fitted double guardrails to all its tankers and introduced new rules for people who are working alone.

Greece, Motor Oil (Hellas) to acquire Greek Shell

Shell has agreed to sell the majority of its Greek operations to Motor Oil (Hellas) Corinth Refineries in a deal worth €219.1m (£198.8m).

The Greek refining company will acquire the distribution and sales of fuels through Shell’s 700 petrol stations. It is agreed that the stations will remain under the Shell brand name for at least five years. The acquisition also means Motor Oil will take over owned storage depots of 137,000cm total capacity in Kalohori, Amfilohia, Perama, Chania, Alexandroupoli and Rhodes.

In addition, it will acquire Shell’s lubricants blending operations plant in Perama, its chemicals storage and distribution business, and 49 per cent of its aviation fuel trading company.

In a separate deal, Motor Oil will purchase Shell’s liquefied petroleum

Europe, The writing is on the wall for Shell’s downstream business

The days when it was beneficial for an oil company to be vertically integrated with business all the way from the well head to the petrol pump are long since gone. Shell’s decision to move out of refining in the United Kingdom is logical and almost certainly the precursor of a complete withdrawal from the “downstream”.

In the past the “Seven Sisters” secured an almost monopolistic control of the production, transportation, refining, distribution and marketing of oil. This gave them incremental margins all the way along the supply chain and meant that they developed competencies at every step along the way. Although the production of crude oil involved wholly different skills and disciplines to, say, the marketing of automotive fuels and lubricants through petrol stations Shell and the rest were quite comfortable with the creation and management of organisations that had all of these competencies. Indeed when I joined Shell in the mid 1960s those of us in marketing did not see ourselves in any way as the poor relations in the Shell Group. But over the years this began to change.

Refining and especially the distribution and marketing of petroleum products are labour intensive activities. However the upstream is far more capital and technology intensive – given the scale of the business manpower levels are comparatively low in exploration and production. So when costs are in the spotlight it is the labour intensive downstream which is likely to suffer. The irony of this is that by reducing manpower and by centralising in marketing you inevitably move further away from the market and become less sensitive to local circumstances. All markets are local and to ignore this truism by taking decisions further and further away from the local market you open the door to others who do not do this.

The retailing of petroleum products through petrol stations was not only one of the core businesses of an oil giant like Shell it was also the public face of the company. But over the years successive managements have pulled away from this business area significantly in some markets. In Europe, for example, Shell has reduced its number of petrol stations substantially over the years and pulled out of some countries, like Spain, completely. This has opened the door for other retailers, especially supermarket chains like Tesco or Carrefour. Shell could have competed against these powerful general retailer brands but although they did try from time to time there was never sufficient top management support for a strong differentiation strategy. This was largely because differentiation costs money – to make your brand the preferred brand you have not only to offer the consumer more in the way of benefits but also to promote these benefits heavily in advertising and marketing communications. For many years now Shell has been unprepared to do this and whilst there are occasional flurries of activity (like the current campaign to promote “V-Power”) there has never been sufficient funds made available for long-term brand building. And if you cannot make a consumer offer that makes your brand be perceived as better then the only differentiator becomes price. And the more price becomes a weapon the lower the margins and the more marginal your retailing business becomes.

With Shell allowing much of its marketing business to become commoditised all of the emphasis turned not to offering the customer more but to minimising costs. Here Shell was up against supermarkets who were able to spread their fixed and variable costs over thousands of products – especially at hypermarket locations. Shell’s unit costs were always going to be higher than those of these giants –the writing for its retail business was on the wall. Add into the decisionmaking process the fact that top management in Shell spends little or no time on its marketing business –unlike that of say a Carrefour where retailing is the core business of the company. The directors of Shell spend virtually all of their time on upstream issues and projects – the marketing business, though very big, rarely gets a look in and is little understood by Shell’s board members. If it was important then at the very least Shell might consider having a non-executive director with a marketing/retailing background – but they have never even done this.

So over the next year or so –possibly even sooner – we can expect to see Shell dispose of its downstream business (including all its petrol stations and other such assets) completely. How they do this will be interesting to observe. One option would be to sell or float off the business as a going concern –and throw the Shell brand in with it. The upstream (etc.) could then trade under the traditional name “Royal Dutch”. A fully focused and entirely separate Shell-branded marketing business could then try and do all the things that “Royal Dutch Shell” has failed to do for years – especially by trying to give customers a reason to prefer their brand.

Scandinavia, St1: Shaking Up the Scandinavian service station market

St1 has revived competition in the Scandinavian service station market with the acquisition of 198 sites. By the end of 2009 Datamonitor predicts that St1 will have a 6% volume share in Sweden and a 4% volume share in Norway, but making further inroads will be tough.

Finnish fuel retailer St1 recently made significant acquisitions that expanded its network of sites in Scandinavia. As part of a new series of country reports, Datamonitor has made predictions for St1´s competitive position in 2010 following this move. The retailer has acquired 118 Hydro and 40 JET branded sites in Sweden, and 40 JET sites in Norway.

StatoilHydro previously operated

the sites but in October 2008 the European Commission granted approval for the company´s acquisition of JET´s Scandinavian service stations on the condition that it reduced the number of sites it had in Sweden and Norway. Some sites have been closed and some have gone to independents, but St1 has been the main beneficiary. St1 already had around 40 stations in Sweden prior to the acquisitions, accounting for just over 1% of sites nationally. By 2010 it will account for over 6% of all public filling stations. This means it will rank behind Shell, OKQ8, Preem, StatoilHydro and Bilisten in terms of site numbers, and will overtake smaller players such as Q-Star and Din-X. St1 will also be responsible for almost 4% of fuel sold in Sweden over 2009, even though ownership was not transferred until June. Ultimately it will have at least a 6% share of volumes on an annualized basis making it the fifth largest player in Sweden in terms of volume sales. In Norway the acquisition of 40 JET branded sites will give St1 a fuel volume market share of 4%, making it the fifth largest fuel retailer in that market as well. These acquisitions were shrewd and necessary. Norway and Sweden are concentrated markets and difficult to enter, partly due to the high density of stations. Organic growth is problematic, as evidenced by St1´s own history in the country. Despite a successful entry into Sweden, the company did not meet its initial objective to have 100 sites by 2007. Acquisitions are the only real option for a company keen to expand. Obstacles remain though, making it very unlikely that St1 will move into fourth place any time soon.

Norway, Fewer filling stations in Norway

The number of gas (petrol) stations in Norway has been reduced by 622 over the past 10 years, according to fresh figures from the Norwegian Petroleum Institute. Last year alone 47 stations were closed. “Now we must keep open the ones we still have. We will not manage with fewer gas stations,”

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says a concerned Marit Helene Pedersen, regional director of the Confederation of Norwegian Enterprise in Finnmark county.

However, Statoil Norway which operates close to 500 petrol stations in Norway, believes the trend will continue, and that in 15 years there will be well under 1000 stations left in Norway.

Portugal has 5th costliest petrol in Europe

According to figures released by Brussels, Portuguese motorists currently pay the fifth most of all European Union citizens to refuel their cars with unleaded petrol

The average cost for a litre of unleaded fuel in Portugal is €1.31, a staggering 24 cents more expensive than across the border in neighbouring Spain where fuel is subject to similar government taxes.

Portuguese would have to travel to the north of Europe in order to find costlier petrol. Only the Netherlands, Finland, Denmark and Belgium have higher fuel prices, with a litre costing between €1.32 and €1.39 at the pumps.

At the opposite end of the scale are Romania, Bulgaria and Cyprus, where unleaded fuel is retailed at 95 cents a litre.

In spite of incessant accusations leveled by automobile associations at fuel companies forming a cartel in Portugal to keep prices high, the competition authority (CA) ruled in spring that despite fuel companies tending to follow the example of dominant retailer Galp in increasing or cutting prices, the CA ruled that no indications of foul play existed.

The report, ruling out any illicit practices read: “In Portugal, in the period 2004 to 2008, the average price of fuel before taxes tended to adjust itself in accordance with the variations of international prices, with a delayed reaction of four to five weeks in diesel and five to six weeks for unleaded petrol 95”. “Parallel behaviour was noted, but this in itself does not indicate a concerted effort to keep prices the same”, the report added.

An inquest into the existence of possible fuel cartels was ordered last year when the Portuguese Government, concerned over the apparent synchronised increases by major fuel companies almost on a weekly basis, opted to order the Competition Authority to conduct an in depth analysis to either confirm or rule out fuel price fixing in Portugal.

Fuel retailers at the time joined the growing chorus of criticism against the incessant increases ordered by fuel suppliers in the country. The Portuguese Fuel Retail Association (ANAREC) had earlier indicated they suspected foul play.

ANAREC chairman Augusto Cymbron charged that the price hikes were “scandalous” in that fuel companies appear to be taking advantage of the unstable economic climate to line their own pockets. “When you look at the case of BP, which in the first quarter of 2008, saw their profits soar by 63 percent in relation to the same period last year, everything becomes clear. How can they continue to argue that the constant increases in fuel prices are motivated by the high cost of oil?” he questioned.

Latest figures meanwhile show that non-branded fuel stations, such as those found at supermarkets, now represent more than 30 percent of the market, and often allow savings of around five euros per tank of fuel.

Malta, Sliema. Savoy residents file petition against petrol pump

Sliema Savoy residents are insisting with government and the Malta Environment and Planning Authority to take immediate action and immediately shut down the operation of a petrol station in Rue D‘Argens. In a written petition forwarded to the Prime Minister, Minister George Pullicino, the MEPA chairman and the Sliema local council, the Sliema Savoy residents explained that the EU Directives and regulations on Volatile Organic Compound emissions (VOC) are all there to be observed and acknowledged.

The harmful effects on the health and well being of residents, particularly in the vicinity of the petrol stations in residential areas, are unacceptable when one considers that VOC‘s may cause not only cancer but other symptoms such as headaches, fatigue, respiratory problems, depression, kidney and liver damage among other illnesses,? the petition said.

The residents explained that the kerbside petrol station has its fuel tanks and pump, with no title for the appropriation of public land, adding that the person who is running the station has sublet the garage (originally a washroom) contributing to the establishment of this kerb side station, without any consent from the owners refusing to hand over the keys and challenging a request for them.

According to the Local Plan for North Harbours, it is evident – they said – that should this application be approved, it would eventually be in conflict with the proposal of the safe open spaces, of the urban section of the Local Plan.

USA, Shell opens hydrogen filling station in New York area

The second hydrogen filling station in the greater New York City area is now open for business with a third due to open later this month and one already operating there for a year. The station is the first of a cluster to come from fuel giant Shell, which formed a partnership with the Port Authority of New York and New Jersey, the US Department of Energy and General Motors to open the forecourt at JFK International Airport. The third station will be located in the Bronx and has been developed with the New York City Department of Sanitation. According to Duncan Macleod, Shell’s vice president of hydrogen, the prospects for hydrogen fuel cell vehicles are strong in the long term and the first cluster represents an important step to build capabilities in retailing the fuel. Shell currently buys the majority of its hydrogen from third parties although it does produce hydrogen from electricity on site in three of its

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