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The owner of the first petrol station north of Auckland’s regional fuel tax border has voiced his frustration, after booming sales stalled when a wholesale price rise caused a four cents a litre increase at the pumps.
Harmeet Marzara’s Caltex Shamrock service station, in Kaiwaka, had motorists queuing off the forecourt after the new tax came in on July 1, taking advantage of 91 octane fuel at 209.9 cents, compared with prices further south averaging around 224.
However, after a couple of weeks, the wholesale cost from Z Energy, which operates and supplies fuel to the Caltex network in New Zealand, went up and their recommended retail price (rrp) rose to 213.9. Sales at Kaiwaka dropped off and drivers began complaining.
Harmeet said he and most operators ran with the price recommended by the fuel suppliers, as that was the only way to make the margin needed to run the business. And while he accepted that wholesale fuel prices fluctuated, he said the timing of the last increase could not have been worse.
“I wasn’t happy with it, as sales tapered off,” he said. “They had no valid reason for bumping it up then.
I said to them, what is your problem, you’re selling more fuel, and it’s your fuel, so why do you want to kill your own business?”
He added that while he could sell petrol lower than rrp in theory, he would make a loss, which customers didn’t understand.
“People don’t know it’s not in my hands and that’s what I try to explain, it’s all decided by someone, somewhere behind a computer screen, but we are the people who face people every day. People think
I’m pocketing the extra money, but I’m just a small guy up against a huge company.”Z spokesperson Georgina Ball said all Caltex operators were independent and set their own prices.
“The retailer has the say on the retail price and the ability to make choices around the trade-offs between volume to his site and pump price relative to direct competitors in the same trade area,” she said.
“Like around the rest of the country, the price we sell wholesale to independent Caltex retailers fluctuates based on reasons including changing costs and changes in the local market. In this case, the price we are selling fuel to the retailer at is matched to the local area market.”
However, she said that any operator would have to absorb losses if they chose to charge less than rrp.
“He would have to take the hit to stay at a low price, just like any business. It’s a choice any business would have to make. And the price is still well cheaper than Auckland,” she added.
