Gull cries foul over barriers to expansion

Last updated 05:00 09/11/2012

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Discount fuel firm Gull says the big four petrol players are offering it uncompetitive prices for wholesale fuel or refusing to supply it, effectively blocking its expansion to Wellington and around New Zealand.

Z Energy has rubbished the claim, saying Gull is being misleading and "mischievous".

Gull services its 53 North Island petrol stations out of its import terminal in Mt Maunganui, but says trucking fuel beyond Masterton - its southernmost station - is uneconomic. It has sought to wholesale fuel from the likes of Z Energy, Caltex, Mobil and BP, which have fuel terminals at ports around the country.

But, Gull New Zealand managing director Dave Bodger said, consumers in areas where Gull did not operate were missing out because its rivals would not play ball.

In a recent example, Gull had sought to wholesale fuel in Wellington so it could set up in the city.

But BP had refused, Mobil wanted payment for Gull's reduced trucking costs, Caltex offered fuel at close to retail prices, and Z Energy wanted to charge a carbon component - for offsetting carbon emissions from petrol - at $25 a tonne, eight times the market rate, he said.

"That's bulls.... It puts two cents or 3c a litre on our price, which makes it uncompetitive. I can go and buy carbon today for $3 per tonne. We just want to buy fuel at fair commercial rates."

Z Energy spokesman Jonathan Hill said Z had offered to supply Gull with fuel in Wellington, with carbon charged at the maximum price of $25/tonne - but explicitly stated to Gull that was negotiable, with Gull able to arrange to pay for carbon separately if it chose.

"We've always been open to the possibility of supplying Gull and we would treat them as we would any other participant in this industry. We are in no way acting as a barrier to them."

The other major players only occasionally needed to wholesale fuel as they had their own fuel infrastructure, which was costly to build and maintain, he said.

"Gull is more than welcome to front up with the cash and build some assets in New Zealand themselves."

BP spokesman Jonty Mills said he was not aware of any discussions between BP and Gull about supply in Wellington, but there was nothing stopping Gull from building its own fuel infrastructure.

BP had recently built a new fuel terminal in Wellington and was focused on optimising its own facilities and its service to its customer base, he said.

Bodger was confident Gull would "eventually" expand around the country, and said it was continually looking at options to build fuel terminals in the South Island. "It doesn't add up at this point in time but eventually we'd like to do that." 

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- The Dominion Post


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