Fuel price drop sign of strong com­pe­ti­tion

South Waikato News - - NEWS / HE PU¯ RONGORONGO - By PETRICE TAR­RANT

Filling the tank just got cheaper in Toko­roa – and the town-wide price drop came just hours after the bright lights of Gull’s un­manned sta­tion lit up for the first time.

Last Wed­nes­day, Gull, an in­de­pen­dent, fam­ily-owned en­ergy company, opened its lat­est petrol sta­tion on the cor­ner of Bridge St and Leith Place, to the de­light of lo­cals and their wallets.

By early af­ter­noon the same day all three sta­tions around town had dropped their petrol and diesel prices by more than 7 cents per litre to match.

BP com­mu­ni­ca­tions man­ager Jonty Mills said BP had de­cided to match Gull’s prices ‘‘where and when we can’’.

‘‘For us it’s about pro­vid­ing choice for our cus­tomers. We’ve got to de­cide whether we chose to com­pete strongly on price. There are a whole lot of other rea­sons that peo­ple come to BP, in­clud­ing the shop and cus­tomer ser­vice. At the mo­ment we have de­cided to com­pete strongly on price in that area [Toko­roa], it is not a na­tional price for us.’’

Chal­lenge man­age­ment, who con­trolled Mo­bil and Chal­lenge prices, said the fact that prices dropped after Gull opened was a co­in­ci­dence.

‘‘We can’t say it was be­cause of the Gull be­cause we are an in­de­pen­dent.’’

He said their prices were dic­tated by the cost price of the fuel it­self, not com­pet­ing sta­tions.

But Gull be­lieved the price­match­ing in Toko­roa was an ex­am­ple of the ‘Gull Ef­fect’, the lo­calised price drop trend across com­peti­tors de­scribed by the Au­to­mo­bile As­so­ci­a­tion (AA) fol­low­ing Gull’s in­tro­duc­tion into a new lo­ca­tion.

Re­tail de­vel­op­ment and sus­tain­abil­ity man­ager Karl Mis­chewski said the in­tro­duc­tion of a Gull sta­tion prompts other lo­cal sta­tions to drop their prices to com­pete.

‘‘The ‘ Gull Ef­fect’ is our pos­i­tive con­tri­bu­tion to lower petrol prices by be­ing a chal­lenger and prompt­ing our com­peti­tor’s re­ac­tion to our own cheaper pric­ing strat­egy,’’ he said.

‘‘We’ve seen it hap­pen at other lo­ca­tions when Gull has en­tered the mar­ket and we be­lieve Toko­roa has fol­lowed suit. Cheaper petrol has ar­rived and ev­ery­one in Toko­roa can ben­e­fit.’’

The new Gull site is an un­manned drive-through site that pro­vides reg­u­lar, diesel and Force 10 grades. Gull has worked in part­ner­ship with lo­cal company, Raukawa Iwi De­vel­op­ment Limited, to de­velop the sta­tion dur­ing the last 12 months.

‘‘ We’ve re­ally en­joyed work­ing with Vanessa Eparaima and the team at Raukawa and are ex­cited to see the fruits of our part­ner­ship come to life to­day.’’

Go­ing down: Other petrol sta­tions are match­ing Gull’s lower Toko­roa prices for now.

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