SEPTEMBER 2013

UKPIA – REFINING UPDATE A SMOOTHER OPERATION THE AGRICULTURAL MARKET Sponsors of BTCC Rob Austin Racing Team A company driven for 2013 Season by proven results FAST's fuel additives are concentrated, technically-driven products designed to match or improve upon the best in class for any application.

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Contact your fuel supplier or machinery specialist Fuel Additive Science Technologies Ltd. Like us on Unit 29 Atcham Business Park, Shrewsbury, Shropshire SY4 4UG • Office: +44 (0) 1743 761415• Fax: +44 (0) 1743 761075 Facebook Block A, Unit 7, Airside Enterprise Centre, Swords, Co. Dublin • Office: +353 (0) 1 808 4805 • Fax: +353 (0) 1 808 4789 Follow us For more information please e-mail [email protected] or visit www.fastexocet.co.uk on Twitter A healthy appetite for safety Safety – whether process or personal – company’s health and safety procedures The monthly magazine for the fuel distribution, storage and does not happen by accident as those need to be dipped into and sampled on a marketing industry in the UK and Ireland. in the fuel distribution industry are well regular basis to ensure they still contain all aware. the right ingredients. In a recent discussion on LinkedIn, Of course, with the proof of the 4-7 NEWS John Reynolds, managing director of pudding being in the eating – it is not Reynolds Training Services, which works always possible to be totally sure that a 9 PORTLAND MARKET REPORT with the Tank Storage Association, Vopak, policy is a success until the result of your Simon Storage, BP, Chevron and Top Oil, efforts have been examined. In fuel 10-11 THE AGRICULTURAL MARKET used the rather interesting distribution no one wants analogy of a fondue to taste the pudding, where 13 TALKING POINT fountain trickling down prevention is defi nitely Is there a market for building vehicles that run on from the top, to illustrate preferred to cure! alternative fuels? how good process safety As nights begin to 15,17,19 A SMOOTHER OPERATION starts in the boardroom draw in, this issue of Fuel Safer, more effi cient and cost effective operations permeating every staff Oil News has an emphasis layer as it fl ows from top on safety, effi ciency and 18 TELEMATICS to bottom. cost effectiveness. “Making A health and profi t is important, but 21,23 SAFETY CLOTHING safety policy can never safety is crucial,” said John. be perfect; indeed to “After all, a process will 24 INSURANCE ISSUES be effective it must be be further delayed by an Is your business fully insured? a moveable feast. A avoidable accident.” 25 INSIDE OUT The changing world of the oil trader 26 THE PRICING PAGE Jonathan Portman, a welder and fabricator with Road Tankers Northern inspects the inside of a new tank.

For more information on tankers and road safety, please go to page 15.

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Fuel Oil News | September 2013 3 September 2013 Volume 36 No 9 ISSN 1757-1057 News

UK REFINING – ONGOING DISCUSSIONS

Fuel Oil News last spoke to Chris Hunt, director context of road transport fuels, the definition of general of UKPIA, in the April 2012 issue – UK what constitutes ‘green’ has also become more refining – hunting for answers – when he was complex because of the need to account for optimistic and firmly of the belief that ‘a healthy, ‘wells to wheels’ emissions analysis rather than robust oil refining industry’ was achievable. Last just those at the tailpipe. challenges it faces. month, editor Jane Hughes quizzed him again Having our own refining industry offers this Energy minister Michael Fallon is fully about the UK’s refining industry. country optimum flexibility; there have been no briefed; he understands the issues and is major outages in transport fuel and we haven’t extremely supportive. Has your opinion about the UK’s refining let customers down, even when Coryton was lost The UK’s remaining refineries may not be industry changed since we last spoke? last year, or during the Buncefield crisis. state of the art compared with the newer Middle No, we’re still enthusiastic. With both With a robust structure and indigenous Eastern and Asian ones, but they’re far removed independent and government projections refining, our energy security has not been an from the older, simpler European refineries, and showing no significant substitute for oil-based issue in the past. Government now appreciates given the opportunity to compete fairly, do still transport fuels up to 2030 and beyond, it will be that unless this precious industry is looked after, offer a sustainable refining base. up to our industry to continue to energise our this may no longer be the case. DECC’s call for evidence about the role of lives and keep us moving. the refining and fuel import sectors closed in mid We’re not asking for favours or grants, but Following recent reports, do you believe July and a refining strategy policy statement is we do seek the best outcome and a legislative our government is any nearer to ’fully due in the autumn. level playing field for this magnificent industry. recognising and understanding the vital contribution of the UK’s oil industry to our Why does Europe appear to be penalising What has made the greenest government energy security’? its refining industry? ever appear to have shifted its thinking on Yes, I’m very pleased to say that over the In its drive for renewables and climate change fossil fuels? last 10 months, DECC has recognised the targets, Europe sought political ’leadership’ Reality! In the 90s, grand, elaborate targets value of UK refining. The recent Purvin & on climate change reduction, going gung were set to address climate change and embrace Gertz report (www.ukpia.com/files/pdf/ ho for ambitious plans that weren’t properly renewable technologies; but as green ambition therolefutureoftheukrefiningsector.pdf) thought through in terms of the impact on EU has bumped into reality over the last two provided government with a robust third party manufacturing subject to global competition. decades, these have had to be revised. In the view on the benefits of UK refining and the Showing global leadership in Europe is great but

4 Fuel Oil News | September 2013 Continued on page 6 www.vopak.co.uk

Added safety for Speedy Fuels A top score

oad Tankers Northern recently supplied this brand new 42,800 litre, 6- compartment, tri-axle Paul Martin, joint managing director of tank trailer to Speedy Fuels & Lubricants, part of the Crown Oil group. Reynolds Trade Credit congratulates Paul R As well as an Emco Wheaton bottom loading manifold and DataPlus MKII electronic Vian, managing director of GB Oils, on metering system, the company requested a pneumatic handrail for added safety on this tanker. being the top scorer at the company’s Operating as a nationwide supplier of kerosene and other fuels, with a base at Iver in recent golf day. See also page 24. Buckinghamshire, Speedy Fuels & Lubricants specialises in delivering around the London area. Earlier this year, RTN also built a 25,000 litre 8 x 4 tanker on a DAF chassis for the company.

To fi nd out how businesses benefi t from safer and more effi cient operations see pages 15-24.

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Fuel Oil News | September 2013 5 News

continued from page 4 In April, the EC said it planned to complete not if it’s putting your businesses out of business Fitness Checks on the region’s refining industry and exporting emissions overseas! in September 2014. Energy minister Michael Last October Wood Mackenzie reported The collapse of Petroplus was a big wake up Fallon said that may be ‘too little, too late and on the Impact of FQD crude GHG call for Europe, bringing governments a glimpse risked further refinery closures’. differentiation for Europia. There are of reality – yes, refineries can close! Again it was DECC and UKPIA have stepped up the worries that discrimination of crudes will a case of politics v reality. pressure to get these Fitness Checks done well set a precedent which could ultimately More effective in the reduction of before the end of 2014. The danger is that the result in full differentiation of all fuels greenhouse gas emissions has been the big Fitness Checks will only look backwards and take based on the carbon intensity of their drive for vehicle efficiency across Europe and longer to complete than some current potentially specific crude oil source. Wood Mackenzie the financial recession, which has seen fossil damaging legislation, such as Article 7a of the concluded that ‘any legislation which results fuel usage significantly reduced. Demand Fuel Quality Directive and the Refinery BREF (Best in differentiation of crude oils based on destruction will continue over the coming Practice) of the Industrial Emissions Directive upstream GHG footprint is best avoided.’ decades due to a range of policies and dynamics will take to get through the legislative process www.woodmac.com and I want to see our refineries in the UK as long without their cumulative effects being assessed. term survivors. I cannot help but think that the industry is the victim of stalling tactics by interested parties Do you have confidence in the European within the Commission. circumstances etc – are going to play into Commission’s Refining Forum and do this. Certainly, our key minister Michael Fallon you believe in the ability of the European What is your opinion as to the likely impact understands the issues and is fighting our corner; Commission to undertake ‘an urgent of Article 7a? other Member States are with us too. analysis of all current and impending EU (Article 7a of the Fuel Quality Directive seeks to legislative impacts’? reduce greenhouse gases by 6% by allocating Did UKPIA respond to the recent I have severe doubts: In some quarters the EC’s values to the source of crude under six options consultation document – Future attitude is that one bit of regulation won’t kill 0 – 5, where 0 = ‘as is’ and 5 = full crude Management of the Compulsory Stocking you. The industry’s view is that the cumulative differentiation) Obligation in the UK? What is UKPIA’s effect of layers of legislation must be taken into Firstly, the Fuel Quality Directive was view? account through ‘Fitness Checks’. Regulators never intended as a greenhouse gas reduction Yes, we did respond. This is an issue close to should have an obligation to do a regulatory mechanism – its objective was as stated in the the heart of refiners and importers and we’re impact assessment for all legislation. To our title, to ensure fuel quality, hence any attempt pleased with the progress already made. With dismay, the EC has stated that the Fitness to use it in this way is misplaced misdirected and the Downstream Fuel Association, we’re working Checks will only be considered retrospectively, needlessly complex – downstream oil suppliers to keep up the momentum and lobbying to seek and on the lines of ‘how well did we implement have no influence on upstream emissions. a faster transition to an Agency system. it as a regulation’. Article 7a is a big, big issue for European At present, stocking arrangements are importers and refiners which puts them at a befuddled and muddled. The Agency will give disadvantage with their competitors in the rest transparency, stocking will be managed centrally of the world. Crude or product shuffling is likely and everyone will be able to see what they’re Facts to result, leading to higher GHG emissions on a paying for. global basis. Work done in third party studies of the UK We can deal with option 0 because compulsory stockholding system highlighted ‡ Europe has 100 refinery facilities it sets EU wide default values and doesn’t the decline in our North Sea oil resources and ‡ In 2010, the European refining industry require masses of verification. Option 1 would its knock on effect of significantly increasing the generated a turnover of 497 billion differentiate between conventional and non UK’s obligation and costs. This has convinced euros conventional sources. government and we’re pleased that DECC has ‡ The region was the second largest On any scale, options 1-5 will bring seen the merits of the UK Stockholding Agency refining centre in the world; China now significant increases in refinery and importer idea. occupies this position costs: An estimated additional three pence ‡ Since 2008, 15 plants have been shut at the pump for biofuels blending under the DECC will be issuing its conclusions as to ‡ By 2020, a further 10 are expected to Renewable Energy Directive with an estimated UK oil refining later this year, what do you shut permanently £300m cost to industry for monitoring and expect them/hope they will say? verification of options 1-5, without taking into I expect them to set out a strategy that account the abatement costs these options removes impediments enabling the UK’s imply. refining industry to better compete. We need When will the refinery Fitness Checks be a domestic policy that does not disadvantage carried out? What’s your view on the likelihood of us us in the global arena. We also need positive Terms of reference for the Fitness Checks should ever achieving a level playing field with action on the European front with firm lobbying, have been available in advance of the EC global refining players? acknowledgement of the cumulative impact Refining Forum’s first meeting in April this year – I am hopeful, as circumstances – energy of legislation and action to address the key to date nothing’s appeared. security issues, financial considerations, political concerns.

6 Fuel Oil News | September 2013 A good fi nancial year for Marquard & Bahls

arquard & Bahls, the group holding company of Mabanaft in the UK, had a successful year in 2012. In the last year, the Mcompany recorded consolidated revenues of 18.3 billion euros (incl. energy taxes) and a net income of 106.4 million euros, an increase Europe-wide storage issues of more than 50% compared to the previous year. Therewith, the group continues its successful development. 2012 was characterised by a strong equity basis, stable results and he bulk liquid storage industry plays a crucial role in interregional good fi nancial liquidity. Based on the good results the equity was increased trade, and is constantly growing and adapting to rise above what to 1.387 billion euros. The cash fl ow amounted to 336 million euros. For Tcan be considered a volatile market. the fi rst time, the company invested more than 800 million euros. After four consecutive years hosting the European Base Oils & Lubricants Summit, and at the request of participants, we are pleased to announce the fi rst edition of this year’s European Bulk Liquid Storage event. Hosted in Rotterdam, The Netherlands on 30th/31st October, this Group Figures 2012 (in million €) 2011 (in million €) highly-anticipated event will provide a unique platform for terminal managers, oil traders, consultants and other key industry fi gures to network Revenues 18,259 18,565 and discuss the growing needs of the bulk liquid storage industry. (incl. energy taxes) Over the two days, we will be focussing on the necessity of investing in storage facilities and the expansion of ports and terminals. We will also be Cash fl ow 336 399 highlighting the important topic of improving technical & HSE standards. (from operating This interactive event will be led through speaker presentations, round activities) table & panel discussions, Q & A sessions and case studies. Income before 162.7 113.3 income taxes Subscribers to Fuel Oil News are entitled to a 15% discount if registering before the 30th September, please quote discount Net income 106.4 70.3 code ELSFON. Non current assets 2,602 1,875 To request a copy of the conference programme or to confi rm your attendance, please contact Cheryl Williams on +44 (0) 203 141 0623 or Employees 1,387 1,346 email [email protected]. (fully consolidated and associated In with a chance companies) Equity 8,560 8,300

Outlook Marquard & Bahls will continue its growth course in the future by expanding the business with activities promising long-term success. Mabanaft is focusing on physical trading in petroleum products with a clear supply function. Next to existing markets, the company will also look at new Craggs Energy’ regions. Oiltanking will further expand its tank terminal network, as well as vehicles at the company’s Hebden its portfolio in neighbouring segments, the dry bulk business. Skytanking will Bridge depot also continue its growth path. Mabagas will primarily focus on increasing the profi tability of its existing activities. Craggs Energy was ‘thrilled’ to be shortlisted for New Business of the A leading independent petroleum company, Marquard & Bahls is Year at this year’s National Business Awards. Michael Hayman, co- privately owned. Core activities include oil trading, tank storage, aviation founder of StartUp Britain,and judge in the category for which Craggs fuelling and renewable energies. The company is active in gas supply was selected, said: “This is a young business with impressive turnover and petroleum analysis. Through its subsidiaries, Marquard & Bahls is growth that is enjoying dramatic success, executed with fl air.” The positioned in 40 countries in Europe, America, Asia and Africa and employs Yorkshire-based distributor will now make a presentation before winners a staff of over 8,500 worldwide. www.mbholding.com are revealed in November.

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even feels that the UK can take the lead here So whilst CO2 remains a global issue, September update and not just because our soggy climate is very fracking in the UK seems to sit fi rmly in the camp With UK gas production in decline and gas different to sun baked Texas. With our long and of localised, NIMBYism (Not In My Back Yard). imports now exceeding exports, this summer’s successful history of regulated oil exploration The fact that Balcombe (the location of the feverish opposition to gas fracking is perplexing in the North Sea, the British government is in recent fracking protests) is a wealthy middle class to say the least. Here is a development that in a perfect position to regulate fracking so that town in the south east of England generates the USA has created economic growth, evened groundwater contamination, water wastage the kind of non-stop media coverage that out the national balance of payments (fewer and methane escapes – all of which can occur would never occur if exploration was confi ned imports), generated jobs, lowered the price of during any exploration technique (including coal to the desolate moors of the North. Indeed, the gas and signifi cantly reduced CO2 emissions. mining) – are minimised to acceptable levels. protestors in Balcombe make an unholy alliance What’s not to like…? Such arguments hold little sway with many between the sandal-wearing hippy brigade and Despite being seen as a modern fracking protesters though, because in truth, wealthy NIMBY’s who drive 4x4s. The latter phenomenon, hydraulic fracturing (fracking) they are simply against any type of fossil fuel worry about climate change but still insist on was actually developed in the 1940’s, although exploration – preferring instead to pin their owning two cars and fl ying abroad twice a year it is only in the last 10 years that process dreams on the holy trinity of wind, sun and for their holidays. They are infl amed when they developments have led to the recent explosion

(ha-ha) in production. The process itself involves SO WHILST CO2 REMAINS A GLOBAL ISSUE, blasting water, sand and chemicals in a lateral direction, through rock strata to release methane FRACKING IN THE UK SEEMS TO SIT FIRMLY trapped within (rather than conventional gas, IN THE CAMP OF LOCALISED, NIMBYISM where the product is located below the rock (NOT IN MY BACK YARD) formations). Some of the claims made against fracking are entirely bogus (fl ammable water taps) and others are exaggerated. For example, sea to meet the world’s energy needs. This read about the UK’s impending energy crisis, but the well publicised 2011 earthquake in Blackpool view is as naïve as it is short-sighted, for there will support no moves to address the problem if was akin to a large lorry driving up the high is no renewable silver bullet to take us to a it affects house prices and/or spoils the view. In street and was one of 20 other similar tremors carbon free world. Let us not forget that 30% fact the combined forces of the Balcombe Army in the UK in the same year, none of which were of Europe’s electricity (35% in the UK) comes neatly sum up the curious mix that is today’s related to fracking. Furthermore, in the USA, from (imported) coal but that burning gas for Green Movement. On the one hand you have a there have been no earthquakes attributable to electricity emits 50% less CO2 than burning set of (largely noble) ideologues who will tolerate fracking in the 70 years since its development as the aforementioned coal. Indeed whilst Europe no interim steps on the way to the promised a drilling technique. has lectured the world on climate change, our land of carbon-free living and on the other, we There are however genuine concerns around CO2 emissions have risen, whereas the USA has have the hedonistic idealists who will make no groundwater contamination and the enormous reduced its carbon output by circa 450m tonnes substantial changes to their lifestyle, but hope consumption of water involved in the fracking since 2008, largely as a result of coal-fi red power that someone else or somewhere else will deal process. In parts of Texas, gas fracking uses up stations being replaced by cleaner burning shale with the problem on their behalf. to 25% of the region’s water supply – this in an gas plants. In China, where 80% of electricity is area suffering from one of the most intensive coal powered and a new coal fi red power station droughts in US history and where the taps in is taken into operation every 10 days, shale some communities, have quite literally run dry. gas could revolutionise the energy landscape What makes this situation worse is that so little in what is fast becoming the globe’s new super of the used water is recycled (most of it going polluter. In short, the burning of shale gas offers straight to waste disposal) even though the likes unrivalled effi ciency when compared to present For more pricing information, see of Shell and Chevron have voluntarily introduced day power generation and even a 5% switch page 26 schemes whereby 90% of their fracked water from coal to gas (which is feasible here and now) is recycled. But the fact that water recycling is will have an infi nitely greater impact on reducing possible and still not taking place is evidence of global carbon emissions than any increases a lack of regulation in a nascent industry, rather in renewable energy that are even remotely Portland Fuel Price Protection than proof of a fl awed engineering process. One possible in the next 10 years. www.portland-fuel-price-protection.com Fuel Oil News | September 2013 9 Marketing and PR

REAP WHAT YOU SOW

AS THE DOMESTIC MARKET TAILS OFF OVER THE SUMMER MONTHS, FOR MANY DISTRIBUTORS, IT IS THEIR AGRICULTURAL BUSINESS THAT PICKS UP SPEED. BELOW LIZ BOARDMAN LOOKS AT THIS MARKET’S SEASONAL PEAKS AND TROUGHS AND ASKS WHETHER AGRICULTURAL SHOWS ARE STILL THE BEST PLACE TO DO BUSINESS.

A changing market? An important sector for Fuel Additive Science Technologies (FAST), agriculture accounts for 15% of its overall business. FAST manufactures a number of agricultural products including fuel upgrade, Gas Oil Extra; fuel soluble biocide, Anti Bug; fuel stabiliser, Fuel Store Plus; and online injector and fuel system cleaner, Diesel Power Restorer. Neil Ryding, FAST’s managing director, believes that the market has seen a significant shift in the last few years: “In January 2011, the market changed hugely as the sulphur content of red diesel was reduced to a level matching white diesel, and the allowable biodiesel content was increased. This has had a knock-on effect on fuel performance in modern engines and fuel storage conditions.” “The market has changed dramatically,” agrees Consols Oils managing director, Kevin Bennetts. “Fewer of the larger farms are As part of the company’s investment into its fuels business in Devon, Linton Fuel Oils took part in the using bigger volumes, whilst very aggressive Mid Devon show at the end of July – taking the opportunity to introduce a new vehicle livery design competition has degraded margins and service levels. Good service is paramount and is winning the war of attrition – treat customers fairly and most will reciprocate.” In Cumbria, however, the market has been relatively static, as Carrs Billington’s Derek Wallace reports: “I don’t think the market has changed too much; although an increasing number of agricultural contractors are doing more of the seasonal work. With bigger equipment, they can get the job done within a day or two of fine weather.”

Managing peaks and troughs Whilst traditionally summer and autumn are the busiest times for the farming community, FAST supplies product all year round; although there is a marked increase in demand from July to October. With five depots spread across the north of England, Carrs Billington experiences demand at different times, in different areas. ”Our Hexham depot supplies more gas oil at harvest time due to the number of arable farms and better harvest conditions, whilst Cumbria’s better suited to growing grass and is busiest at silage time in late May and June, and again at the end of summer,” On the look out for new business – Web Oil.co.uk exhibits at the Cheshire Show in June explains Derek.

10 Fuel Oil News | September 2013 At Cornish distributor Consols Oils, volumes Managing director, Jordan Ingoe, who set peak at harvest times. “Service levels are crucial, up the company in 2009, reported that the show but fuel is always being used so life goes on. had been extremely busy, with lots of interest, Fortunately there’s usually a very clear division new leads and enquiries. between peak gas oil volumes and heating oil Offering both Carbery and Harlequin demand,” adds Kevin. tanks, Oswestry-based Oil Tank Installation Service (OTIS) was the only tank supplier at the Showing off this summer aforementioned show. Carrs Billington is a big supporter of local shows “We’ve exhibited for a number of years,” and is the Cumberland Show’s main sponsor for company owner Andy Middleton told FON. “We the next three years. “We also take a stand at a need to have a presence at the agricultural number of smaller shows around the county and shows – it’s a good opportunity to see our have done for many years, offering refreshments regular customers and pick up new business at them all. We know it’s appreciated by amongst the farming community.” customers and show organisers alike,” says “It’s important not to judge your success by Derek. what you sell at the show,” he added. “A week “We participate in a considerable number of before last year’s Royal Welsh Show, we sold two agricultural events, mainly as part of our ongoing tanks to a customer we’d first met at the show education and training activities for the industry,” in 2011.” explains FAST’s Neil Ryding. “These range from informal events for farmers organised by our Gravitas or gimmick? A busy show for Ingoe Oils fuel distributor customers and attendance at As demonstrated above, many distributors county shows, to formal technical presentations reported that their presence at county shows alongside machinery manufacturers. As a route Staffordshire, Nantwich and Denbigh and Flint. was still a very important part of their marketing to market these events tend to raise awareness “The show went well and we were really and PR strategy. Having gone down this route of issues rather than increase the volume of busy; lots of people said that they’d already in the past, Consols however now believes that additive sold, but we still think that they’re time heard of us,” said Lisa. “As well as domestic and the ‘best route to market is a smart, well-liveried well spent.” agricultural customers we were also looking to truck, competitive price and good service.’ “It’s pick up new commercial customers with a view that simple – gimmicks are history,” said Kevin. Growing the business to expanding in to areas such as the Lakes.” Owned by Nicholl Fuel Oils and UK Fuels and Also attracting new business at the same Distributors are invited to based in Ellesmere Port, Web Oil.co.uk launched show was Rochdale-based Ingoe Oils. The just under a year ago. Deputy editor of Fuel company, which has expanded significantly since send their opinions and/or Oil News, Liz Boardman met marketing team the start of the year, took on sales manager, photographs to member, Lisa Stockton at this year’s Cheshire Stephen Gommersall with a view to extending its Show. The company also attended shows in reach into Cheshire. [email protected].

Seen here at the Cheshire Show, the OTIS team also attended the Royal Welsh Show

Fuel Oil News | September 2013 11 Irish News Undermining bona 85 year milestone fide distributors Celebrating its 85th year in business, Reynolds Logistics has launched a new website www.reynoldslogisitics.com, WHILST BOTH NORTHERN IRELAND (NI) AND and given its trucks a brand new livery. THE REPUBLIC OF IRELAND (ROI) HAVE SEEN A Chief executive officer, Andrew Reynolds says DRAMATIC RISE IN BOTH SMALLER QUANTITY he is delighted to reach the 85 year milestone, which PURCHASING AND THE USE OF 20 LITRE DRUMS he considers a “great achievement” and looks to a OF KEROSENE, THE UK MAINLAND HAS NOT – AS number of factors as key to the company’s longevity. YET….. “Reynolds Logistics can attribute its success to our staff, several of whom have been with us for many years, our Doing business on both sides of the water, consistent innovation and our desire to improve.” Previously reserved for Donall O’Connor, managing director of emergency run-out situations Family-run Reynolds Logistics currently employs Valueoils.com, believes the key difference in only, the requirement for 20ltr 260 people and has an annual turnover of €35 million. drums of kerosene is being the markets is one of supply. met by ‘an over-subscribed Andrew had high praise for the company’s staff: “Each “In recent years, mainland UK has armada of distributors’ says and every member of staff has contributed to our success seen significant merger activity. Market Donall O’Connor, Value Oils and long may it continue.” supply and demand is relatively well The company, which counts Top, Q8, Shell, Maxol, balanced with reasonable equilibrium, many small shops and convenience stores BP, Topaz, Phillips 66 among its customers, was named consequently there are normalised business now stock and sell 20ltr drums of kerosene European Transport Company of the year in 2012. The conditions where a return on investment for heating. There are also new milk-float first time an Irish company had won the award, Leo can be expected. type operators selling these drums door to Varadkar, minister for transport, tourism & sport said: “This “In Ireland things are very different door and even offering to pour oil into the indicates that Reynolds Logistics is one of the leading with an excess of supply at both wholesaler tank! operators in its class in Europe.” and distributor level, ensuring on-going “These are issues that just don’t The new website, launched to coincide with and pressure on price. This over-supply situation presently arise for UK distributors Reality highlight the 85th anniversary, has been developed to ensures very thin distributor margins and over here, it could permeate the UK market be as user friendly as possible. Enhanced by a more unrealistic customer expectations in terms in the not too distant future if it remains professional look and feel, it is constantly updated with of delivery lead times and service levels. unchecked. news stories, photographs and social media live feeds. “Combined with current high oil prices See page 22. and tough economic times, consumers in Where are Health & Safety? Ireland now expect availability of smaller Where are Trading Standards? delivery quantities – a requirement that is Do our trucks not have minimum delivery On the road and online, Reynolds Logistics continues to drive its business forward. A being met by an over-subscribed armada quantity plates? depot was recently opened at West Thurrock of distributors. Despite delivery options as Do we ignore consumer law?” to deliver bitumen across the south east small as 100, 200 or 300 litres being widely offered by distributors, there’s also a huge “As we play catch up with mainland demand for 20ltr drums of kerosene. UK, new buying groups are popping up with leaflets openly discussing how much savings False economy customers can gain by moving away from “Of course, the false economy here is that 20ltr drums to bigger deliveries of 200ltrs those who can least afford it, are paying or even the huge savings by going for even most for their fuel due to cash shortage. 500ltrs! These 20ltr drums were originally provided “All of the above continues to to assist only in emergency run-out undermine the bone-fide distributor situations. They’re now being used by a business and will not serve the industry well growing number of NI/RoI consumers as in coming years. However, it does seem to the normal way to buy their heating oil be too far gone now to be reversed, at least requirement. in Ireland.” “In NI & RoI, most retail garages and

If you have a view on this matter, or indeed on any other burning issue in the Irish market, please share it with Irish correspondent Aine Faherty – [email protected].

12 Fuel Oil News | September 2013 Talking Point Is there a market for building vehicles to run on alternative fuels?

“Quite simply yes,” said Simon Wood, Mercedes-Benz UK “We’ve a number of operators who’ve opted to run vehicles on alternative fuel solutions – LPG, CNG, hybrid, E-CELL and a selection of biofuels – and, results have been both clear and encouraging. Feedback tells us that cost savings of up to 20% are available, with conversion payback times on investment around 24 months, depending on technology and distances covered. We offer a number of alternative fuel solutions for both our truck and van products. They are available ex-factory or are supplied through our UK engineering partners.”

At Volvo Trucks, Ray Cattley, said: “Yes, there is a market for alternative fuels which offer a solution to lowering global emissions, as well as making the operation as efficient as possible. “Methane in LNG form, which we have adopted to provide relatively dense energy storage on tractor units, is one of the fuels identified in Volvo’s own research into 7 potential alternative fuels for trucks The UK’s first bio-LNG refuelling station – as well as dimethyl (DME). In the LNG form this offers the greatest potential for return-to-base type regional distribution applications, until there is a Alternative facilities wider network of LNG refuelling stations. The first facility in a national bio-LNG refuelling network opened in Daventry recently. A Last year, Volvo Trucks announced the second facility will open at Avonmouth in October. production of its FM methane diesel LNG dual fuel Bio-LNG is Gasrec’s proprietary blend of LNG and liquid biomethane (LBM), produced solution for Euro-V. Operators keen to take a step from organic matter such as household food waste. Compared with pure diesel equivalents, forward in reducing their carbon footprint, see this as it can reputedly ‘cut fuel costs by 20-30% and CO2 by a minimum of 20%, while delivering a good solution backed by full factory development, a 90% reduction in NOx and particulate matter emissions’. Commercial development production and warranty terms.” manager, Doug Leaf said: “Over the coming months we will be working with major retailers and logistics companies wishing to build their fleets of bio-LNG fuelled vehicles. SHARE YOUR VIEWS WITH The UK’s first CNG filling station opened in Crewe in March. It is the UK’s largest such [email protected]. facility with the capacity to fill 500 HGVs a day.

Fuel Oil News | September 2013 13 A Better Build

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14 Fuel Oil News | September 2013 A Smoother Operation

Safe, effi cient and cost effective

With both process and personal safety high on the agenda, it is increasingly important for companies to ensure a smoother operation with improved safety, effi ciency and cost effectiveness at its core. In support of this, UKPIA has just broadened its original process safety commitment and launched a new initiative – Assuring Safety: Leadership in Process Safety. As well as featuring expert advice for drivers, Fuel Oil News looks at the latest legislation affecting health & safety and previews this year’s Road Safety Week.

Are your drivers distracted?

We’re all human: we daydream, get side-tracked, run late and make mistakes. But on roads, distractions can be fatal. Driving requires your full attention. Driver distraction is a major cause of death and serious injury in the UK. Every day, 5 people are killed and 63 seriously injured; 1 in 4 serious road casualties involves a driver at work. Because we know Although driving is the most dangerous thing that most of us do on a daily basis, many drivers feel cocooned in their vehicles and have a sense of over-confi dence which makes multi- the you tasking at the wheel common. questions This year’s Road Safety Week is asking us to tune into road safety, to keep focused on the ask when choosing task at hand and never put ourselves and others in danger for the sake of a call, text or other activity that can wait. While it is illegal to use a hand-held phone to text or call at the wheel, around a third and installing a of drivers fl out this law; many others use a hands-free kit, despite both activities causing a dangerous distraction. Other distracting activities such as eating or smoking at the wheel have been shown to increase your risk of crashing yet lots of drivers own up to it. Distribution Road Safety Week is an ideal opportunity to promote life-saving messages and show your company’s commitment to road safety to employees and their families, customers, suppliers and your community. Loading Arm... Register for a FREE e-action pack at www.roadsafetyweek.org.uk which also features facts and ideas for activities.

Road Safety Flotech Performance Systems Ltd Week: Charlton Street 18-24 Grimsby North East Lincolnshire November DN31 1SQ t: +44(0)1472 268852 e: [email protected] www.FlotechPS.com LOW VOLUME FUEL DELIVERY UNIT

contained, demountable fuel dispensing unit which has been designed to meet the needs of fuel distributors who’s customers require low volume ‘Metered’ deliveries of fuel into plant equipment, building sites, generators, boats, green houses and other sites which may have difficult access and where it may not be cost effective or practical to send a conventional fuel delivery tanker. t 01296 619510 | f 01296 619519 | www.alpeco.co.uk Alpeco Limited | 66-69 Rabans Close | Aylesbury | Bucks HP19 8RS Industry proven products unrivalled service and support

16 Fuel Oil News | September 2013 A Smoother Operation

Reversing the risks

DR WILL MURRAY, RESEARCH DIRECTOR AT INTERACTIVE DRIVING SYSTEMS Will Murray highlights the dangers of reversing LOOKS AT THE RISKS ASSOCIATED WITH REVERSING VEHICLES

Suckling Transport’s managing director Peter involved reversing and this increased to 15% for ‡ When reversing and turning remember to Larner is a great admirer of Will’s pioneering light commercial vehicles and 19% for heavier watch the front of your car as well. work in safety. commercial vehicles. ‡ If towing a trailer, practice reversing with “I have known Dr Will Murray for over 10 the trailer in a safe location. years. Will has specialised in work-related road Assessing the risks ‡ Where possible, reverse or ‘pull through’ safety research, policy and practice for over A where are we now gap analysis is a good into parking spaces rather than out of 20 years. He is a visiting fellow at Queensland starting point. It can be applied initially and on them. University of Technology and a trustee of the an annual basis to review progress, covering four safety organisation Brake. He is, in my view, this areas: www.virtualriskmanager.net country’s leading authority on road safety. ‡ Operational analysis and statistics Will is someone I have had the honour ‡ Site procedures and operations of sharing a platform with at the European ‡ Vehicles Transport Safety Council in Brussels. He has ‡ People insight and vision and is an excellent public For vehicles, typical questions to ask could we’re the speaker on the subject of road safety. I fi rst include have you fi tted/specifi ed any of the met him in 2002 when he asked me for my following? perfect people help on a project which he was working on for ‡ vehicle proximity devices? the government called CoVIR. His enthusiasm ‡ improved vehicle mirrors? to give you the for his subject blew me away and I have heard ‡ auto reversing brakes/bumpers? him speak many times since. His ability is ‡ fl ashing reversing lights? only surpassed by his modesty. If there was ‡ reversing bleepers/alarms? answers... any justice in the system, he would receive ‡ reversing cameras? a knighthood. He is both unassuming and ‡ any other reversing aids? interesting – a rare combination of qualities in For more information and gap anyone.” analysis examples contact will.murray@ virtualriskmanager.net

Insurance claims data and research undertaken by the University of Huddersfi eld suggests that Advice for drivers approximately 25% of all reported collisions Andy Cuerden from Interactive Driving Systems arise from vehicles reversing, in some cases many said: “We believe that all drivers must exercise more. Reversing incidents are invariably one of greater care when reversing/backing, especially the top fi ve collision types encountered by most fl eet drivers visiting customer sites and homes organisations, and with their high potential as part of their daily activities. Because of the for asset damage and injury to bystanders, relatively low impact speed, many people don’t drivers are being urged to take more care when regard reversing as a signifi cant hazard. travelling backwards. Many such collisions are “Whether you are travelling forward at 100 never offi cially recorded and for this reason fl eet kilometres per hour on a highway or reversing/ managers and the authorities are often ignorant backing at walking pace on a customer’s site, of the reversing risk until it is too late. the same vigilance, caution and courtesy must By applying a range of appropriate apply.” management (analysis and review), site, driver and vehicle-based interventions organisations Interactive Driving Systems has issued the can be more proactive and cut both costs and following advice: risks. ‡ Walk around the vehicle and look for obstacles or hazards before moving. A proactive approach ‡ Always beware of pedestrians, but It is important to understand the extent of the especially children. They are unpredictable! risks in your organisation. Insurance claims data ‡ Reverse slowly – turn your head, use your Flotech Performance Systems Ltd is a good starting place. mirrors and check both sides. Charlton Street Grimsby Interactive Driving Systems recently ‡ Avoid reversing over a long distance. North East Lincolnshire undertook detailed analysis of 79,403 motor ‡ Look behind before reversing – not as you DN31 1SQ fl eet insurance claims. 13% of the claims take off. t: +44(0)1472 268852 e: [email protected] www.FlotechPS.com Telematics

THE TELEMATICS ROUTE

TELEMATICS HAS BECOME AN INCREASINGLY IMPORTANT AREA FOR FLEET MANAGEMENT – HELPING COMPANIES TO LEARN MORE ABOUT THEIR DRIVERS AND VEHICLES AND MAKE SIGNIFICANT OPERATIONAL SAVINGS.

FUEL OIL NEWS TAKES A CLOSER LOOK BOTH AT THE SECTOR’S MAIN PLAYERS AND THE DISTRIBUTORS ALREADY BENEFITING FROM THEIR UNIQUE SOLUTIONS. Less fuel, more savings for Clugston GB Oils picks Blue Tree As part of the company’s green initiative, Clugston Distribution installed CMS Supa Trak The R:COM fleet management system, developed by systems across its entire fuel fleet earlier this year. Blue Tree Systems and utilised by some of the UK’s Clugston views this technology as an integral part of its fuel efficiency strategy that has biggest fuel distributors including GB Oils, provides also involved SAFED training and reducing the maximum cruising speed of its fleet to 53mph. unique features that significantly reduce fuel spending Safe Driving Assistants (SDAs) were installed across the fleet, which now totals 13 vehicles. and CO2 emissions. Each driver receives a weekly update on their Energy Efficient Driving Index (EEDI) score and a The system has an advanced Power Take-Off pointer report, which details aspects of driving style. (PTO) feature, designed specifically for the fuel sector In May an unweighted average of 9.4 mpg was achieved, a 5.3% improvement on which allows staff to monitor fuel deliveries and check the previous three months and an 8.3% improvement over the previous 13 months, when the duration, time and location at which fuel was operations began. dispensed. The Clugston fuel fleet averaged 16,032 miles per week during May. With fuel prices Additionally, the system’s fuel auditor provides assumed to be a constant at £1.10 pence per litre a saving of £0.03 pence per mile was a valuable tool in combating fuel theft. It compares achieved, delivering a total saving of £2,400. This would equate to £23,000 for the fuel fleet the fuel burnt by each truck to the amount of fuel over the year, or £2,875 per truck. Clugston has also recently installed CMS’ SDA technology on purchased, and highlights any discrepancies. five new fuel trucks. www.supatrak.com As well as providing effective driver performance management with detailed mpg, over-speeding, harsh braking and idling data, the system has a tachograph management feature, which significantly reduces administration and ensures full compliance with statutory regulations. www.bluetreesystems.com

A fuel efficient road

CMS’ systems have already delivered The Road Ahead, a recent independent study carried impressive savings for Clugston Distribution out by Trimble, providers of fleet management and driver safety solutions, found that rising fuel prices are How are your how a vehicle is being driven,” says Tony the number one concern for UK directors and senior vehicles driven? Neill, vice president, Navman Wireless. managers. 64% of respondents felt that sustainability “By providing this data through our Smart will have a significant effect on their business Navman Wireless is helping businesses to Telematics system, a business can ensure it is moving forward and, as a result, many are seeking identify operational inefficiencies and drive operating efficiently, which in today’s tough technologies to reduce fuel use and have a positive changes by offering an intelligent driver economic climate is more important then environmental impact. performance monitoring system that goes ever.” www.navmanwireless.co.uk Telematics and fleet management technology beyond vehicle tracking. have been identified as solutions to tackle this Launched in 2012, Smart Telematics challenge to optimise schedules and route planning, enables businesses to become leaner and reduce unnecessary mileage, improve fuel efficiency identify areas which can be optimised by and driver proficiency. By enabling companies to providing critical real time data about vehicle monitor fuel consumption, miles per gallon and and driver behaviour. CO2 outputs, the technology can help to reduce fuel With the metrics to identify drivers who use by up to 22% and improve carbon footprint. are falling below set standards and the drill Timble believes a key factor in controlling fuel down capability to view the actions which are costs through this technology lies with the employee causing inefficiency, long-term changes can in the driving seat. It is the data on fuel use per be made to help reduce fuel consumption, individual vehicle that is of greatest use to managers. extend equipment life, cut carbon emissions While instant feedback is provided to drivers in their and improve driver safety. “The thirst for information vehicles, centralised analysis through telematics has become even greater” “The thirst for information has become says Navman’s Tony Neill software is invaluable. www.trimble.com even greater. Businesses now want to know

18 Fuel Oil News | September 2013 A Smoother Operation That’s why

RIDDOR is changing…again Emco Wheaton

Helen Dhalla of Straight Talking Law discusses the changes to The is the first choice Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR), which are expected next month. It is hoped that the proposed changes, currently subject to for Distribution parliamentary approval, will clarify and simplify the RIDDOR reporting requirements. Changes include: ‡ replacing the ‘major injuries’ category with a shorter list of Loading Arms ‘specifi ed injuries’ ‡ replacing the current reportable list of 47 types of industrial disease with eight categories of reportable work-related illness ‡ reducing the number of reportable dangerous occurrences. There will not be any signifi cant changes to the reporting requirements for fatal accidents, accidents to non-workers (members of the public) and accidents resulting in a worker being unable to perform their normal range of duties for more than seven days. The changes will require fewer incidents to be reported overall and the HSE has estimated that they will result in a net benefi t to business of £5.9m over a 10-year period. The HSE website (www.hse.gov.uk) contains a dedicated section RIDDOR changes for October 2013 which includes an excellent guidance paper (free download) to help businesses prepare for the changes. www.straighttalkinglaw.co.uk

ADR photo card replacement

The Scottish Qualifi cations Authority (SQA) is in the process of replacing all UK ADR driver training photo cards issued since 29 October 2012, as part of its administration of the photo card certifi cates for the Dangerous Goods Driver Training on behalf of the Department for Transport (DfT) in Great Britain and Northern Ireland. A stress free alternative from Mechtronic This is necessary to ensure compliance with the format and information to be displayed on Fleet maintenance the photo card, as agreed at the recent meeting of United Nations Economic Commission for “Proactive fl eet maintenance of metering kit can Europe and ADR Contracting Parties. be one of those jobs you just don’t get round The redesign has already commenced and to. Breakdowns can result in lost business and SQA will liaise closely with enforcement agencies that can be expensive,” says Mechtronic’s sales and trade associations to ensure training manager, Andy Spencer. providers, hauliers and individual drivers are “We can provide customers with a stress aware of the changes. free alternative. For a fi xed yearly subscription, There will be a six month grace period fl eet management of our metering and manifold during which SQA will be working with the police system, allows accurate budgeting, with no and other enforcement agencies to ensure that unplanned costs. We take responsibility for no driver or haulier will be disadvantaged while the health and the accuracy of the system, the new cards are issued. There will be no cost to ensuring compliance with Trading Standards the drivers or their employers for the new cards. requirements. We work with clients to ensure SQA is hoping to have issued all this activity has little or no impact on business replacements by Friday 4th October. If any Flotech Performance Systems Ltd by timing our visits in line with their needs.” certifi cate holder has not received their Charlton Street Nine highly trained, regionally based technicians replacement by this date they should contact Grimsby provide support from new, well-equipped and [email protected] and their new certifi cate will be North East Lincolnshire well-stocked vehicles. fast tracked to them within fi ve working days. DN31 1SQ t: +44(0)1472 268852 e: [email protected] www.FlotechPS.com COMMERCIAL SALES MANAGER 365+65)(:,+

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20 Fuel Oil News | September 2013 Safety Clothing

Making a visible difference

BEFORE THE NIGHTS DRAW IN AND TEMPERATURES START TO DROP, MANAGERS WILL BE SOURCING NEW WORK WEAR WHICH IS NOT ONLY COMPLIANT AND COMFORTABLE BUT ALSO ENHANCES THE COMPANY IMAGE.

THE PPE REQUIREMENTS FOR MAJOR OIL COMPANIES AND STORAGE FACILITIES HAVE NOW BEEN LARGELY HARMONISED FOLLOWING GUIDANCE FROM THE ENERGY INSTITUTE, OIL INDUSTRY BEST PRACTICE AND THE IMPLICATIONS OF THE CORPORATE MANSLAUGHTER ACT 2007. Designed for drivers

Hazchem Safety has developed compliant garments which are designed to meet drivers’ specific requirements. Brent Douglass, the company’s sales and marketing director, explains: “We stock a wide colour range and specification of Protal uniforms which are a safe and cost-effective alternative to some of the more traditional inherent fibres. As well as offering increased safety, Protal has none of the unpleasant smell, or the tendency to fade and shrink, associated with many of the treated garments. Styling and comfort are also important factors so we spent time establishing exactly what the industry was looking for.” The accepted industry standard for head protection is the Iris2 helmet which offers integral eye protection and optional ear muffs. Some distributors have fallen foul of terminal regulations by choosing an alternative helmet which does offer eye protection but does not have The NEW the full lateral adjustment, giving rise to splash risk from a burst hose Spectrum helmet from or coupling. A British manufactured alternative, the Spectrum, has just Hazchem been launched by Hazchem Safety and is receiving significant interest Safety with health and safety officers as the goggle meets the higher ‘B’ impact rating. www.hazchemsafety.co.uk

Are employees well protected….? …..with the correct flame retardant and antistatic clothing, that’s legally visible at night or in poor light conditions and from the wind, rain and cold? “Answering yes to all of these points with one garment range has long been a problem,” explains Diane Robson, managing director of Arcs ‘N’ Sparks. Lyngsoe Rainwear manufactures a complete range of garments that meet all these requirements. Its Microflex flame retardant/antistatic garments are windproof, waterproof and breathable and come in a variety of EN471 high visibility options, flame retardant to EN14116 and antistatic to EN1149 standards. “These garments have proved to be incredibly popular in the fuel transport market,” adds Diane. www.arcsnsparks.co.uk

Popular in the fuel transport market, the Lyngsoe FR flame retardant range is distributed by Arcs ‘N’ Sparks

Fuel Oil News | September 2013 21 Delivering fuels safely and efficiently to service stations, airport depots and commercial customers in the UK, Ireland and Europe.

UK Office: Irish Office: Reynolds Logistics Reynolds Logistics Portside North 2011 Orchard Avenue Merseyton Road Citywest Business Campus Ellesmere Port Citywest Cheshire CH 65 2HQ Dublin 24 England Ireland Tel: +44 151 357 5800 Tel: +353 1 424 2300 Fax: +44 151 357 5873 Fax: +353 1 424 2391 E: [email protected]

www.ReynoldsLogistics.com

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22 Fuel Oil News | September 2013 Safety Clothing

Functionality with a lifetime guarantee

Swedish workwear brand, Blåkläder produces a wide range of high visibility clothing all certified to EN luminance and reflection standards. The range includes trousers, jackets and weather protective articles in different styles to suit any working environment. Blåkläder guarantees high quality and believes that it is essential for high visibility workwear to provide functionality, comfort and above all, safety. Every Blåkläder garment comes with a lifetime seam guarantee as standard. www.blaklader.com

Understanding the importance of protection at Blåkläder

Looking more professional Dickies range of high visibility clothing, safety wear and reflective gear meets British Standard EN471. Each product carries a different level of protection, allowing companies to choose the most appropriate. A personalised embroidery service is also offered for all workwear. Not only does embroidered workwear look professional, it also serves an important identifying and uniting purpose amongst employees. Did your company enter an employee for the title of UK Worker of the Year? High visibility clothing with Sponsored by Dickies, the competition’s varying levels of protection search is for workers who exemplify what doing a good job is all about. Next month’s winner can choose between a Suzuki Swift car or bike. www.dickieseurope.com

High visibility clothing – new EN standard EN471:2003 A1:2007, the standard for high visibility clothing has been withdrawn and replaced by EN ISO 20471:2013. Currently EN 471:2003 A1:2007 remains the harmonised standard under the PPE directive and can continue to be used for CE certification purposes. However over the next few months it is expected that the new standard will be published in the Official Journal of the EU and the date at which the old standard will have its presumption of conformity to the directive removed. Until that time applications for EC type certification can be made to either standard.

Extra comfort for fuel distributors

Many ProGARM offers a range of flame resistant EN471 high visibility garments including a yellow and orange and a navy/ garments yellow EN471 Class 2 coverall which has proved popular with fuel distribution and petrochemical companies. also offer The softness of the VXS+ fabric lends itself to wearers looking for improved comfort against traditional coarse protection against arc flame resistant fabrics, whilst the instant extinguishing properties of the fabric blend offers protection in the event of flash incidents an incident. Many garments are also certified to IEC61482, offering protection against arc flash incidents. In line with ProGARM’s policy of continual improvement, the company plans to implement the new EN ISO 20471:2013 standard into its current product range on relevant products. www.progarm.eu

Fuel Oil News | September 2013 23 Insurance Issues

Is your business fully insured?

Insurance issues 7. Crossover/wrongful delivery – if the driver Andrew Dix, partnerships manager at OAMPS, 4. 24 hours spillage remediation service – accidentally contaminates a third party’s believes: “There are many risks involved in the whether responding to a major spill on product as a result of negligence, the cost distribution and haulage of fuel. Whilst there the highway or a smaller spillage at a can be high. This is not covered in most is the fear of an accident on the road, there household delivery, this cover is invaluable. insurance policies but is definitely worth is also the additional risk of a product spill or By including this in the insurance policy, the adding.” crossover and it is crucial to consider the safety total cost of a claim can be minimised. This of your staff. Ensuring that insurance policies are will be achieved by the insurer arranging for Communication is key suitable is a major responsibility for companies. clean-up work to start immediately, using Paul Martin, joint managing director Reynolds “There are a number of specific issues for known contractors and with a set outcome Trade Credit believes that communication with fuel distributors or hauliers to consider when and pre-agreed rates. policy holders has improved, and as a result, purchasing insurance. insurance cover has benefited. “A no benefit 5. Statutory environmental costs cover – of the doubt attitude has been replaced with 1. Limit of indemnity – be aware of any inner sometimes called the Bartoline Extension. a credit where it’s due mentality. While high limits set within the insurance policy. It’s This cover will ensure that should the levels of insolvencies are likely to continue during not uncommon for cover extensions to be Environment Agency or any other periods of economic gloom, the good news restricted to a lower level than expected. regulatory body impose an enforcement for businesses is that credit insurers have the following a sudden and unforeseen capacity to offer increasing levels of cover.” 2. Bona fide subcontractors – by using a pollution incident, your insurance policy Reynolds’ insurance is bespoke, designed for bona fide subcontractor a business is not will respond. Most insurance policies will the individual needs of a client’s business. As a removing its legal liability. The insurance exclude this in full and some extensions will business changes, the insurance is designed to policy will place responsibility on the provide a limited level of cover. The ideal is develop alongside, meeting the client’s needs for policyholder to check and document that a policy that provides cover to the full limit the lifetime of the relationship. Access to credit the subcontractor has a suitable insurance of indemnity under Public and Products information can also help grow a business rather policy in place, and the level of cover Liability. than simply protect against bad debts. It can matches that of the policyholder to avoid form an integral part of an existing strong credit any gaps. 6. Secure insurer – whilst it is a much used management process. phrase, most insurers don’t explain what Reynolds is one of the oldest independent 3. Terms & conditions – it is important this means to the client. Firms such as specialist credit insurance brokers. “We have an to review your terms and conditions Standard and Poor’s undertake financial extensive client portfolio over a wide range of for commercial work. Insurance is a checks on insurers confirming that there is industries and are the largest providers of credit contractual liability and the terms and sufficient financial stability to pay claims in insurance services to the oil industry,” adds Paul. conditions in a contract can set the the event of major losses. Whilst there have “Credit insurance is designed to speedily replace parameters for any claim as long as they been instances where A rated (very secure) cash lost through the insolvency or default of are deemed reasonable. In the case firms have had financial difficulties, these an insured customer. Clients benefit from our of domestic deliveries terms assist in have been few and far between. Having insurers’ expert knowledge of their trade and are mitigating any claim, however, the business an insurer with a strong security rating will made aware, at an early stage, if other suppliers will be deemed as the professional and afford you an additional level of comfort. are experiencing payment delays.” invariably will be seen at fault. www.reynoldsinsure.com

At Reynolds’ golf day (see page 5) over 90% of attendees Dave Ainsworth, GB Oils, Danny Greechan, Coface, Paul Martin, were fuel clients. Matt Greensmith, Crown Oil, Paul Martin, Steve Carrick, BWOC and Tony Wilson, Inver Energy Ian Bocca, QBE and Rory Clarke, Rix Petroleum

24 Fuel Oil News | September 2013 Your Fuel Supply Partner 020 7808 5137 Inside Out wfscorp.com

THE CHANGING WORLD OF THE OIL TRADER A ‘balancing role’ established in 1966, its total deliveries of crude brand licensee in these countries. The company From its early days in the late 19th century, oil and refined oil products in 2012 amounted has in recent years also established a presence the companies which we associate with the oil to 261 million mt, which exceeds the combined in the aviation fuels market, now supplying a industry have become household names – Exxon, inland oil demand of Germany, France and Italy. total of 2.5 million mt at 46 airports worldwide Shell, BP, Chevron, Total, etc. These vertically Looked at from another perspective, it represents (including Heathrow, Stansted and Manchester). integrated international oil companies (IOCs) almost four times the UK’s 2012 inland oil Last year it acquired the former Petroplus Cressier have been joined by state owned concerns, or consumption! refinery in Switzerland, along with the associated national oil companies ( NOCd )- names such as pipeline, storage and marketing assets in a joint Aramco, Kuwait Petroleum, IPC, NIOC, Petrobras, Tougher times transaction with Atlasinvest. PDVSA, as well as Russian companies such as Recent years have seen oil trading becoming Trafigura is the majority (80%) owner of GazpromNeft, Lukoil and Rosneft. More recent more competitive and the market more Puma Energy, an oil marketing, storage and additions have been the three Chinese giants, transparent; in addition, the environment for distribution venture, which is represented in Petrochina, Sinopec and CNOOC. trading has often been unfavourable, being Africa, Central America & Caribbean, Southeast Less well known and with a generally lower in a state of backwardation, with prompt Asia and Australia. Last year, Trafigura acquired profile have been the oil trading companies. prices higher than future levels, rather than Ion Equity’s stake in Blue Ocean Associates., Their principal raison d’etre and continued contango, where future values are higher. The parent company of Harvest Energy, and became existence has been in playing the critical role of latter condition creates time-related arbitrage joint majority owner of the company along with balancing supply and demand, for both crude oil opportunities for traders. This less favourable Denis O’Brien’s investment vehicle, Baycliffe. and refined products. The need for this role was environment is reflected in recent financial In 2012 Gunvor acquired the former heightened from the early 1970s, as vertically performance. Vitol’s reported 2012 net income Petroplus refineries in Belgium (Antwerp) and integrated supply chains became less secure and was $1.05 billion vs. $2.28 billion in 2009. Germany (Ingolstadt); crude oil processing geographical imbalances began to emerge, in Gunvor’s reported 2012 net income was $318 operations have resumed at both plants, particular the growing US deficit in both crude million vs. $621 million in 2009. enabling the company to establish a footprint in oil and gasoline. In the 1970s/80s some of the inland marketplace of both countries. the activities of oil trading companies attracted How are they responding to this These are examples of diversification controversy, and criticism e.g. Phibro (Tom challenge? away from the core activity of oil trading, into O’Malley and Andy Hall) and Marc Rich (now As a sector, the principal response has been activities where their established expertise and absorbed into Glencore). characterised by moves to invest in physical competencies can be applied to good effect and The sector is now dominated by 6 assets – such as oilfields, refineries, storage which are complementary with the principal, companies – Vitol, Gunvor, Trafigura, facilities and fuels/lubricants’ marketing core business. GlencoreXstrata, Mercuria and Cargill – businesses. As the downstream oil sector continues all of whom are global traders in the wider Vitol established a joint venture company to experience change, both to structure commodities’ spectrum. with Helios Investment Partners, called Vivo and ownership, I think that we will witness With the exception of Glencore, these are Energy, in 2011, which acquired the majority more instances of the oil trading companies all privately owned companies and, in terms of share (80%) of fuels/lubes marketing businesses spreading their wings to extend and expand scale, are very substantial operations. Taking in 14 African countries from Shell ( which their participation where attractive opportunities the largest of the group, Vitol, which was retained a 20% interest) and acts as a Shell present themselves. Find out more about oil trading For those seeking an overview of how the international crude oil market works – Trading Crude Oil – the Consilience Guide – covers every aspect of crude oil trading. The book breaks down the components of oil price formation using the Consilience A/T/G commodity price analytical tool devised by Liz Bossley, owner and chief executive officer of the Consilience Energy Advisory Group, an energy consultancy firm that specialises in trading issues. To buy a copy of Trading Crude Oil: The Consilience Guide, please visit www.ceag-store.co.uk.

Fuel Oil News | September 2013 25 TheThe Pricing Pricing Page Page

Highest price Biggest up day 52.56 ppl +0.88 ppl Wholesale Price Movements: Thu 01 Aug 13 Thu 01 Aug 13 19th July 2013 – 18th August 2013 Kerosene Lowest price Biggest down day 49.75 ppl -0.73 ppl Kerosene Diesel Gasoil 0.1% Thu 08 Aug 13 Tue 6 Aug 13 Average price 51.30 52.22 50.73 Average daily change 0.41 0.48 0.46 Highest price Biggest up day Current duty 0.00 57.95 11.14 53.62 +1.02 Total 51.30 110.17 61.87 Thu 01 Aug 13 Thu 01 Aug 13 All prices in pence per litre Diesel

Lowest price Biggest down day 54 pplppl 1.1.57505750 KeroKero DieselDiesel GasoilGasoil 0.1% ExchangeExchange RateRate 50.50 ppl -0.81 ppl Thu 08 Aug 13 Mon 22 Jul 13 1.1.56505650 53 pplppl

1.1.55505550 52 pplppl Highest price Biggest up day 1.1.54505450 52.06ppl +0.92 ppl 51 pplppl Thu 01 Aug 13 Thu 01 Aug 13 1.1.53505350 Gasoil 0.1% 50 pplppl

1.1.52505250 Lowest price Biggest down day 49 pplppl 1.1.51505150 49.03 ppl -0.76 ppl Thu 08 Aug 13 Tue 06 Aug 12 48 ppl 1.1.50505050 Price in pence per litre Price US Dollar to UK Pound Sterling US Dollar to UK Pound 47 pplppl 1.41.4950950 Gasoil forward price 2277 May 03 JJunun 1 100 JJunun 1 177 JJunun 2 244 JJunun 0 011 JJulul 08 JJulul 15 JJulul 2222 JulJul 29 JulJul 0505 AugAug 1 122 AuAugg in US$ per tonne

$940 WeekWeek commencingcommencing $920

$900

The Fuel Oil News Price Totem September 2013 – August 2014

Trade average buying prices Average selling prices Kerosene Gasoil ULSD Kerosene Gasoil ULSD

Platts 50.95 61.54 109.88 Scotland 53.32 65.97 112.40 59.90 69.60 115.45 North East 53.19 65.94 112.36 58.30 68.17 114.57 North West 53.01 65.08 112.02 61.90 69.90 113.90 Midlands 53.30 65.93 112.80 56.88 69.35 115.73 South East 54.51 65.73 112.30 58.36 68.66 114.28 South West 53.42 65.87 112.32 57.08 68.02 114.50 Northern Ireland 53.67 66.24 113.11 56.40 70.40 116.85 Republic of Ireland 74.73 77.12 116.09 82.38 85.22 118.94

The price totem fi gures are compiled from the results of a telephone survey of distributors carried out on 07/08/2013 Buying prices are ex-rack. Selling prices are for 1000 litres of kero, 2500 litres of gas oil and 5000 litres of ULSD (Derv in ROI). Prices in ROI are in € . The FON Price Totem includes Platts derived market data, supplied courtesy of Platts and BigOil.net. This allows distributors to make a comparison with the average buying prices.

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