Picking Up the Torch

BP Amoco Marketers Association helping jobbers in transition

Greg Lindenberg, Editor, CSP

SAVANNAH, Ga. -- The BP Amoco Marketers Association said that BP Products North America's decision to pull out of several problematic markets in terms of supply will allow the company to better serve its jobbers in its other markets.

The oil company, which informed its jobbers beginning last week of its plans to refocus its U.S. fuel supply operations to core areas where it has a strong market position and proprietary fuel supply, will no longer offer branded retail gasoline and diesel sales are in Louisiana, Texas, Wyoming and North Dakota.

John Kleine, executive director of the Savannah, Ga.-based group, told CSP Daily News, It's a tough decision. It's not a pleasant position for a company to be in. You never want to give up a market position or sales, and in many cases, the customers that they are giving up have been long-term, generational customersoriginally with Standard Oil and then Amoco and then BP.

He added, We encouraged BP to have an understanding of the customers that have been with [the company] for a very long time. They have been extremely loyal, and have been very good spokespeople for the various brands. BP certainly knew this, but we as an association further sensitized BP to that.

But, Kleine said, BP, which has been very fair to the affected jobbers, must try to best serve two constituents, those who are in the impacted markets, and those who are not.

BP said it will continue to offer and grow its fuel supply operations in areas in the West Coast, Midwest, Southeast, Mid-Atlantic regions, including New York and New Jersey, where it has an advantaged refinery and terminal network.

BP's customers have said supply reliability is a top priority. The oil company's fuel business objective is to provide jobber and commercial customers with reliable and cost-effective supply in areas where BP-branded products are offered, it said. The company said it has determined that it cannot effectively meet its strategic goal of supply reliability from the terminals where it has decided to end fuel supply agreements.

It was really just a decision around supplysupply capability or lack thereof, said Kleine. When you look at your business strategically, and ask, 'What am I doing well and not doing well?,' if there are things you are not doing well, what can you correct? Or what can't you correct? They figured out that they really didn't have the capability of fixing long-term supply situations in these [markets]. It's an honest representation of where they can supply effectively and where they can't.

Kleine said that 60 or 70 member jobbers will be affected; the BP Amoco Marketers Association has more than 600 members.

In early September, the association will present a series of strategic transition seminars for the affected BP jobbers. Those workshops will help them deal with critical issues and develop marketing plans. The association has picked up the torch and run with it to serve its constituents. Information will be going out to the jobbers in the next day or two, he said.

The seminars will be conducted by Jeff Bernard, president of J. Bernard & Associates LLC, West Chester, Pa., and David Nelson, the founder of Petroleum Marketers Study Groups.

Click here for more details on BP's decision and how it is helping the affected jobbers.