NP says there is no fuel strike, assures reliable fuel supply

[wagonrunner]

a measly 2.50 from 100 sale , dise rel piper profit , come like phone card margins

i remember hearing of ppl who in d gas business for yrs closed down due to low margins but then again i still seeing a couple new gas stations being built , maybe they will make do with d quickshop profits but still dat lil 2.5% from gas is dog $ ....

is it only $100 in gas being sold a day? only $1000?

[wingnut]

Well it look like they miscalculate the bluff
Seems they thought after a long weekend enough ppl would be on empty to cause most ppl to panic and grind things to a halt.
They prob need to close for 2-3 days to effect that

Yuh wuda think in this day an age with everything so dependent on fuels dey would have had in their contract/liscene they cant jus close unless its for good reason etc to prevent these kinds of situations from happening

Pfftt den again what do i kno bout complex gas stations negotiations silly me

[Dave]

I passed by a few np ones and they seemed normal. Curepe unipet was closed for gas sales.

[matix]

So why de ass is only central unipet stations affected...steups

I was south, central today. All Unipet stations were closed.

[De Dragon]

Unipet stations in Couva and McBean were closed from early this morning to 4pm at least (last check).

[hydroep]

Is the subsidy fault...

Khan: We’re working to resolve the issue
Clint Chan Tack

ENERGY Minister Franklin Khan yesterday said a decision will be made soon on calls from the Petroleum Dealers Association for regularised fuel margins.

Khan told Newsday, "We are aware that there are challenges with the liquid fuels margins. The case has been made out by both the association and Unipet." He explained that the margin is set by Finance Minister Colm Imbert in consultation with him.

"Both ministers are in discussion, and a decision on the way forward will be made shortly."

Efforts to contact Imbert were unsuccessful.

Association president Robin Narayansingh said he has not received any word from either the finance or energy ministries about a meeting to resolve the situation. He said some 32 stations, mostly Unipet, were closed. Narayansingh said some opened part of the day while others were closed for the entire day, but it was not a punitive measure by the dealers against citizens.

Narayansingh said the current margins make it difficult for dealers to properly service the public. "We are stifled."

He explained that the association has made recommendations to the Government for an increase in the margins for the last four years but to no avail. Narayansingh was concerned that unless something is done, the liquid petroleum industry will end up in financial ruin, but he was optimistic that a solution could be found.

Energy Chamber CEO Dr Thackwray Driver said the situation is the result of the regulated market in fuels. He explained that the dealers’ revenue is based on a set of margins which are part of the market's regulation to support the fuel subsidy system. While dealers' net revenue is set by law, Driver said their costs vary based on factors such as increases to the minimum wage or increased security costs.

He said the chamber supports the association in its call for sustainable margins. Driver added, the chamber also supports de-regulation of the petroleum retail market and the removal of the fuel subsidy system. He also said the general decline in fuel sales, especially diesel, has contributed to the dealers' problems.

"While this decline is a good thing, from an energy efficiency point of view, it does mean that retail stations are seeing decreased sales." In supporting a reduction on the reliance of liquid fuels through the introduction of electric vehicles and conversion of existing vehicles to CNG, Driver said the chamber believes this requires changes to the fuel retail sector.

Former energy minister Kevin Ramnarine said the situation demanded Khan's intervention. Of the 140 gas stations in TT, Ramnarine said 25 are part of Unipet's network and the industry hires 2,000 people. "Fuel distribution is the lifeblood of our country. The reality is, many of these 140 stations are now sub-economic and are making losses or having to cut costs to stay alive.”

Ramnarine said the solution is to improve the wholesale and retail margins to a level that allows for the survival of the entire supply chain.

He explained, these changes will not cause an increase in fuel prices. "The increase in the margins can be absorbed into the fuel subsidy which is now at the lowest its been in decades. A nominal adjustment in the wholesale and retail margins will save the industry from further decline and preserve jobs.”

https://newsday.co.tt/2019/10/30/khan-were-working-to-resolve-the-issue/

[sMASH]

rumors were partially true, and the official releases were partially true.

[rmlmv]

Had a little wait but got through Medford gas station (a unipet) this morning.

[Ragnor]

EDIT - if any of the calcualtions are wrong please correct.

For every $1 dollar of gas sold, dealers get $0.195 cents/liter so, for every $100 spent in premium or super on average they should get $3.638.

For every $1 dollar of diesel sold, dealers get $0.145 cents/litre so, for every $100 spent in diesel the dealer gets $4.252

Unipet has 21 locations assuming they handle 100 cars and 50 diesel vehicles at each location per day and assuming that each vehicle spends $200 on gas and diesel.

So for gas vehicles - 100 cars x 21 locations x (0.195/5.36)x $200 = $17,859
For diesel vehicles - 50 vehicles x 21 location x (0.145/3.41) x $200 = $7,639

So the total estimated revenues per day $25499, per week is $178,494 and per year is $9,281.695. So, it could be safely assumed they making between $10 million to $20 million per year since I am assuming that of the 1,200,000 vehicles on the road they service they service only, 0.26% of those vehicles per day.

Additionally, these figures do not include the food and drink they sell daily (who serves sushi and red wine at a gas station).

Way I see it is for them to put figures to the public, I am not fully convinced that their operating margins are hurting that much. I would like to see them release their financials to make that case.

[maj. tom]

pressure this morning. rel traffic lines to gas stations.

[Chimera]

Isnt it 2.5 cents per dollar?
Not 20 cents

.025 per $1.00

[kamakazi]

EDIT - if any of the calcualtions are wrong please correct.

For every $1 dollar of gas sold, dealers get $0.195 cents/liter so, for every $100 spent in premium or super on average they should get $3.638.

For every $1 dollar of diesel sold, dealers get $0.145 cents/litre so, for every $100 spent in diesel the dealer gets $4.252

Unipet has 21 locations assuming they handle 100 cars and 50 diesel vehicles at each location per day and assuming that each vehicle spends $200 on gas and diesel.

So for gas vehicles - 100 cars x 21 locations x (0.195/5.36)x $200 = $17,859
For diesel vehicles - 50 vehicles x 21 location x (0.145/3.41) x $200 = $7,639

So the total estimated revenues per day $25499, per week is $178,494 and per year is $9,281.695. So, it could be safely assumed they making between $10 million to $20 million per year since I am assuming that of the 1,200,000 vehicles on the road they service they service only, 0.26% of those vehicles per day.

Additionally, these figures do not include the food and drink they sell daily (who serves sushi and red wine at a gas station).

Way I see it is for them to put figures to the public, I am not fully convinced that their operating margins are hurting that much. I would like to see them release their financials to make that case.

Now I myself not sure how it works but let's remove the *21 locations from your equations... Because they are independent gas station operators. When you work with that you get ~$1150 per day. When you use that figure what do you get ultimately

[Redman]

Why would you aggregate the stations-UNIPET is a fuel wholesaler that distributes fuel to its station network-21 independent owners that BUY the fuel from them


19.5 cents on 4.97 -3.9%
19.5 cents on 5.75 -3.3%
14.5 cents on 3.41 -4.2%

Green Fund and Business Levy total .9% of your revenue-3,2.4, and 3.3%
So you are on average 'GROSSING' 2.9% IF-you have an even spread with enough diesel.

However gas sales tend to be about 70-80% of your sales- so you start coming down in Gross Margin.

In the mean time the GORTT -the entity that controls your margins is happy to Increase Taxes,Electricity, and Minimum wage-so the dealers are getting squeezed as the cost of everything goes up.


The margins have been sub 5% since forever-and the PDA has been rallying for Margin Increase since Mannings era.


ETA to add that a new station and contents should be insured and Workmens Comp and Public Liability are all mandatory requirements.
Given the nature of fuel distribution these tend to be more expensive due to the inherent risks.
That 2-3% margin disappears fast.

[Ragnor]

19.5 cents on 4.97 -3.9%
19.5 cents on 5.75 -3.3%
14.5 cents on 3.41 -4.2%

Green Fund and Business Levy total .9% of your revenue-3,2.4, and 3.3%
So you are on average 'GROSSING' 2.9% IF-you have an even spread with enough diesel.

However gas sales tend to be about 70-80% of your sales- so you start coming down in Gross Margin.

In the mean time the GORTT -the entity that controls your margins is happy to Increase Taxes,Electricity, and Minimum wage-so the dealers are getting squeezed as the cost of everything goes up.


The margins have been sub 5% since forever-and the PDA has been rallying for Margin Increase since Mannings era.

I not disagreeing but in low margin businesses, it comes down to volume, in this case the number of cars serviced per station. With 1.2 million cars on the road even half that figure I would like them put some figures on the table. Thet have yet to do that.

Additionally, like the cinema business where cinemas don't make money on the ticket sales but the confectionary and food. What are the sales figures like for that business line etc? Too many variables to consider which is why they should definitely reveal those figures.

[Redman]

Why would a private business be required to publish its figures?
Do you have to show your boss your personal P&L to get a raise?

Yes it is a volume business- and thats the issue-volumes are coming down while everything is going up.

NP KNOWS this-but being a state enterprise that is vertically integrated hides the retail networks performance and ultimately does what the political directorate says to do.

Most of their stations are losing money.
Alongside the nefarious activities that create Niagara sized leakages.

[viedcht]

I assisted with an audit of a NP station for 2017. The margins really are small. It varies between 4-13% (that's 'take home' for the station owner) of entire sales. Its a midway station, not in a busy area and sales are slower mid month with sale pickups on weekends. The taxes do eat into the profits more than it may seem.

EDIT - if any of the calcualtions are wrong please correct.

For every $1 dollar of gas sold, dealers get $0.195 cents/liter so, for every $100 spent in premium or super on average they should get $3.638.

For every $1 dollar of diesel sold, dealers get $0.145 cents/litre so, for every $100 spent in diesel the dealer gets $4.252

Unipet has 21 locations assuming they handle 100 cars and 50 diesel vehicles at each location per day and assuming that each vehicle spends $200 on gas and diesel.

So for gas vehicles - 100 cars x 21 locations x (0.195/5.36)x $200 = $17,859
For diesel vehicles - 50 vehicles x 21 location x (0.145/3.41) x $200 = $7,639

So the total estimated revenues per day $25499, per week is $178,494 and per year is $9,281.695. So, it could be safely assumed they making between $10 million to $20 million per year since I am assuming that of the 1,200,000 vehicles on the road they service they service only, 0.26% of those vehicles per day.

Additionally, these figures do not include the food and drink they sell daily (who serves sushi and red wine at a gas station).

Way I see it is for them to put figures to the public, I am not fully convinced that their operating margins are hurting that much. I would like to see them release their financials to make that case.

[maj. tom]

It's known that fuel sales cannot make profit. In USA they make less than 5 cents per gallon sold. The profit comes from the Quik Shoppes and other conveniences offered. Either adapt or close down. I don't see why the TT government should have to bend backward to allow certain stations to make a profit on fuel sales. So many small time gas stations have closed down over the years and the big ones with the Quik Shoppes have survived for this reason. Cruel harsh reality, but what can the government really offer to gas stations?

But before you cry foul, you should know that after all the ups and downs in a year, gas stations do not make much money from selling gasoline. After credit card fees and other operating costs, net profit for gasoline sales averages 3 cents a gallon, according the National Association of Convenience Stores.
https://www.cbsnews.com/news/why-gas-st ... il-prices/

[ADONI]

Next small shops that sell phone cards!

[pugboy]

$1200 profit before other expenses a day is very tight for a station

- which does not have a convenience store
- a few employees to pay
- security guard
- armed cash pickup
- greenfund, taxes etc
- rent
- ttec, wasa

not to mention they need to have a rotating cash account of a few hundred thousand to pay NP as I dont think NP gives any kinda extended credit for fuel delivery.

The smaller stations with a good location might actually be in a less business risk situation than the big ones.

The reality is we as a nation. like the US are a car country and require a large number of gas stations
however unlike the US where gas station businesses tend to be very tight, couple employees only and all self serve
it is the opposite here, the business model has turned out to be a very high overhead one.

[viedcht]

profit before expenses is very tight for a station:

- which does not have a convenience store
- 2 employees to pay(owner cashes, etc. workers assist at pumps)
- greenfund, taxes
- ttec, wasa

The smaller stations with a good location might actually be in a less business risk situation than the big ones.

Station in audit barely made 5% profit one year recently and they only have those^ expenses.

[Redman]

$1200 profit before other expenses a day is very tight for a station

- which does not have a convenience store
- a few employees to pay
- security guard
- armed cash pickup
- greenfund, taxes etc
- rent
- ttec, wasa

not to mention they need to have a rotating cash account of a few hundred thousand to pay NP as I dont think NP gives any kinda extended credit for fuel delivery.

The smaller stations with a good location might actually be in a less business risk situation than the big ones.

The reality is we as a nation. like the US are a car country and require a large number of gas stations
however unlike the US where gas station businesses tend to be very tight, couple employees only and all self serve
it is the opposite here, the business model has turned out to be a very high overhead one.

It was broken 10 years ago-and remains broken now.

[Redman]

It's known that fuel sales cannot make profit. In USA they make less than 5 cents per gallon sold. The profit comes from the Quik Shoppes and other conveniences offered. Either adapt or close down. I don't see why the TT government should have to bend backward to allow certain stations to make a profit on fuel sales. So many small time gas stations have closed down over the years and the big ones with the Quik Shoppes have survived for this reason. Cruel harsh reality, but what can the government really offer to gas stations?

But before you cry foul, you should know that after all the ups and downs in a year, gas stations do not make much money from selling gasoline. After credit card fees and other operating costs, net profit for gasoline sales averages 3 cents a gallon, according the National Association of Convenience Stores.
https://www.cbsnews.com/news/why-gas-st ... il-prices/

Well when you NATIONALIZE REGULATE and OVERSEE an industry in this context.....the state of the industry is controlled by you.

So the GORTT has aggressively retain control of the fuel supply chain.
You feel the chit at Petrotrin stopped there?

[pugboy]

If for arguments sake private station owners were able to mark up additionally like in other countries

Would an extra 5% profit per $100 outlay be too much for the market to bear ?
I feel not given the kinda vehicles I see on the road. The public already doesn’t even blink an eye for the cost of alcohol so I doubt there would be riots for a few cents more and they can choose to go by the govt controlled stations anyways.
Plus gortt still going to pretty much sell the same amount of fuel.

[VexXx Dogg]

If for arguments sake private station owners were able to mark up additionally like in other countries

Would an extra 5% profit per $100 outlay be too much for the market to bear ?
I feel not given the kinda vehicles I see on the road. The public already doesn’t even blink an eye for the cost of alcohol so I doubt there would be riots for a few cents more and they can choose to go by the govt controlled stations anyways.
Plus gortt still going to pretty much sell the same amount of fuel.

Open market + penchant for digouteye = recipe for disaster

[Chimera]

$1200 profit before other expenses a day is very tight for a station

- which does not have a convenience store
- a few employees to pay
- security guard
- armed cash pickup
- greenfund, taxes etc
- rent
- ttec, wasa

not to mention they need to have a rotating cash account of a few hundred thousand to pay NP as I dont think NP gives any kinda extended credit for fuel delivery.

The smaller stations with a good location might actually be in a less business risk situation than the big ones.

The reality is we as a nation. like the US are a car country and require a large number of gas stations
however unlike the US where gas station businesses tend to be very tight, couple employees only and all self serve
it is the opposite here, the business model has turned out to be a very high overhead one.

how much that 5% profit end up being though?
what kinda sales that station was doing

[sMASH]

even if they raise it, the public will stilll hadda buy it.

[pugboy]

maybe at the start but look at many other small countries which have market determined pricing.

If for arguments sake private station owners were able to mark up additionally like in other countries

Would an extra 5% profit per $100 outlay be too much for the market to bear ?
I feel not given the kinda vehicles I see on the road. The public already doesn’t even blink an eye for the cost of alcohol so I doubt there would be riots for a few cents more and they can choose to go by the govt controlled stations anyways.
Plus gortt still going to pretty much sell the same amount of fuel.

Open market + penchant for digouteye = recipe for disaster

[VexXx Dogg]

maybe at the start but look at many other small countries which have market determined pricing.

If for arguments sake private station owners were able to mark up additionally like in other countries

Would an extra 5% profit per $100 outlay be too much for the market to bear ?
I feel not given the kinda vehicles I see on the road. The public already doesn’t even blink an eye for the cost of alcohol so I doubt there would be riots for a few cents more and they can choose to go by the govt controlled stations anyways.
Plus gortt still going to pretty much sell the same amount of fuel.

Open market + penchant for digouteye = recipe for disaster

This can work if the market is truly open and the other gas providers can set up shop (Shell etc), and we're not bound to NP alone

[hydroep]

even if they raise it, the public will stilll hadda buy it.

Just before Colon-in-Butt had given them the increase in 2017, a representative from the dealers association being interviewed on the Radio said as much i.e. demand for fuel is relatively inelastic so if Government wanted to it could raise prices, give dealers a bigger margin and it would not appreciably affect sales.

After all, people doh riot. They could raise gas to $ 10.00 a liter...what John Public going to do, stop commuting?...

[Ragnor]

Given the mix of opinion, I will stick to my original point, you want the increase in margins, fine give some transparency into the industry.

If you running a single station that makes EBIT $1,200 per day or close to $435,800 per year then yes I agree there is a problem.
1)But what kind of expenses are being charged to the company? I know loads of companies that window dress their earnings to reduce taxable income i.e miscellaneous expenses.
2) How many are employees vs actual franchise holders /owners? (makes a difference if they have to pay salaries).
3) What are the returns on other sources of income attributed to the station?
4) Additionally, if these companies make less than $500,000 in topline they are not subjected to VAT,.

I'm not asking for their full AUDIT STATEMENTS. Just some transparency into their operational earnings. Among all the statements released by UNIPET and PDA, I have yet to see some figures there.