Sun | Aug 9, 2020

Fuel Deals carves out ‘exclusive’ niche in petrol market

Published:Friday | July 10, 2020 | 12:20 AMNeville Graham - Business Reporter
A vehicle being fuelled at the Fuel Deals Express depot in Kingston, on Thursday, July 9.
A vehicle being fuelled at the Fuel Deals Express depot in Kingston, on Thursday, July 9.

For two years, a company called Fuel Deals Express, FDE, has been carving out market share in the competitive petroleum sector through a service built around exclusivity and membership.

Don’t arbitrarily drive up to the single island at FDE, cash in hand, and expect to buy fuel, whether you drive a high-end ‘crissas’ or beaten-up jalopy. No. The vehicle would have to be part of a pool or fleet that is owned or controlled by a registered client of FDE.

The operation is totally cashless, and highly personalised.

“We’re not a gas station; actually we’re a refuelling depot. Our concept is one for what a gas station can be in the future,” says hands-on co-owner Christopher Hendricks. His partner in the business does not play an operational role.

FDE caters strictly to fleets and has membership categories based on volume of petrol consumed weekly: silver is up to 3,000 litres of petrol per week; gold is up to 6,000 litres; and platinum is over 6,000 litres.

FDE only sells 90-octane gasolene, ultra-low sulphur diesel and regular diesel, which are dispensed from a single depot featuring six nozzles in two sizes, the smaller one for non-commercial vehicles and the larger one for fuel dispensed at high volume.

Fuel is dispensed on terms that are agreed beforehand by the member.

Hendricks describes the relationship as a very personal engagement where FDE acts according to instructions from specific people.

“A driver of a particular truck can’t come for fuel more often that what is the arrangement, nor can he fill a container unless we are instructed to do that,” he said.

The FDE depot sits on a quarter-acre at Newport West, home of Jamaica’s largest seaport and cargo operation. The five storage tanks at the complex rest above ground – unlike regular service stations, where the petrol is stored and pumped from underground – and together have a capacity for 36,000 litres of fuel. The company is supplied with fuel by West Indies Petroleum, WIP, a heavy hitter in the petroleum sector that mostly does bunkering for shipping and heavy industry. WIP also supplied the storage tanks.

“This is the way of fuel stations of the future. It will be all plug and play – you plug into your tanks, set up your island … set up an office, and you’re ready to go,” Hendricks said.

“Instead of putting up a tank at your business location, we do it; then we become the re-fuellers for you,” he said.

The idea for FDE came as Hendricks was approaching his 50th birthday, and thinking about the legacy he would leave to his children.

At the time, he had been working at box-making company AMG Packaging for 11 years as a production manager. He loved the job, but knew he wanted to plant his own flag and had been pondering what he could do that would outlive him. The epiphany came during a night out with friends.

“Call it a mid-life crisis moment, if you want, but we were chatting one night at our favourite spot and the question came up: What more can be done in the petroleum industry?” Hendricks recalled.

One of the friends on that night-out was Robert Courtney Ilgner. Company records show that Ilgner is sole proprietor for Fuel Deals Express.

Hendricks says his partnership with Ilgner is covered by an agreement and that they are in the process of regularising the arrangement so that FDE can operate as a limited liability company.

He declined to comment on how much it cost to set up the FDE operation, and how the investment was shared between him and Ilgner.

“What I can say, however, is that it was not labour-intensive … the result was that we ended up spending about half the cost for a regular gas station,” he said. Industry sources say that a regular gas station can cost in the region of US$1.2 to US$1.6 million to set up.

Today, FDE counts trucking companies like McMasters and BL Williams, along with corporate fleets like Guardsman, Neveast Stationery and Cals Manufacturing, among its membership. Smaller, own-account truckers operating from the ports, he adds, are forming themselves into associations so that their combined gas consumption can qualify them for FDE membership, he said.

“We can’t get everybody, but we do enough marketing to ensure that those in the business know us,” Hendricks said.

In the meantime, FDE is gauging its membership growth against its 36,000-litre fuel capacity, and adjusting to present and future needs.

“We can do another 10-15 per cent right now; we could even do 20 per cent before we would have to set up a special area for trucks. Certainly, we’ll have to do that because the word is getting around with the truckers that they can get special deals,” he said.

Fuel Deals is also scouting for locations in St Thomas and on the north coast to expand the operation.

neville.graham@gleanerjm.com