BP de­fi­ant as prof­its surge 65pc

The Timaru Herald - - FRONT PAGE -

In a state­ment, BP said the prof­its cov­ered a year in which fuel sales had grown 7 per cent, far stronger than the in­dus­try as a whole, as well as pro­ceeds from the par­tial sale of its Re­fin­ing New Zealand share­hold­ing.

Re­fin­ing NZ owns the Mars­den Point re­fin­ery and the fuel pipe­line that con­nects the re­fin­ery to Auck­land.

‘‘BP cur­rently has over $1 bil­lion of cap­i­tal in­vested in as­sets in New Zealand and di­rectly and in­di­rectly em­ploys over 3000 peo­ple across the coun­try,’’ the state­ment said.

Af­ter weeks of re­fus­ing to comment di­rectly apart from short state­ments, Boffa agreed to a lengthy in­ter­view in which she de­fended the com­pany’s tac­tics and prof­itabil­ity.

Boffa and her col­leagues were hauled into Par­lia­ment in early May by En­ergy Min­is­ter Me­gan Woods.

Woods had de­scribed the email as ‘‘alarm­ing’’ while Prime Min­is­ter Jacinda Ardern said BP had ex­plain­ing to do.

While Woods said af­ter the meet­ing she be­lieved the petrol mar­ket ap­peared to be ‘‘bro­ken’’, Boffa said the mar­ket was com­pet­i­tive and BP was do­ing noth­ing wrong.

‘‘I don’t think we’ve done any­thing wrong,’’ Boffa said. Debi Boffa, BP New Zealand man­ag­ing di­rec­tor

‘‘The Com­merce Com­mis­sion came out [when the email was pub­lished] and con­firmed there was noth­ing rel­a­tive to the law that we’d done wrong.

‘‘We are a com­mer­cial busi­ness here in New Zealand; we’ve got over a bil­lion dol­lars in­vested in this mar­ket; we em­ploy di­rectly and in­di­rectly more than 3000 peo­ple.

‘‘We’ve got an el­e­ment of risk and a very com­pli­cated sup­ply chain here so what we’re do­ing is seek­ing to get a re­turn on that.’’

An email from BP pric­ing man­ager Suzanne Lu­cas out­lined an at­tempt to rise prices across an area to counter fall­ing sales in taki.

‘‘Rather than just re­duc­ing the price in taki we will be looking to in­crease the price at Para­pa­raumu & Ka¯piti and also Levin,’’ Lu­cas wrote.

‘‘We have al­ready in­creased all three sites men­tioned by 5cpl [cents per litre] and have found that the Z [En­ergy sta­tion] in Para­pa­raumu has al­ready matched our pric­ing.’’

Boffa said the tac­tics out­lined in the email did not ex­plain the wider sit­u­a­tion the com­pany was fac­ing in the area, where prices were not sus­tain­able.

‘‘The email was de­scrib­ing a tac­tic that we chose to take. The con­text was that we were sit­ting in a mar­ket where we’d been for a num­ber of weeks and months, it was heav­ily dis­counted and we’d seen vol­umes move as a re­sult of that.’’

She re­ferred to in­creas­ing prices as re­duc­ing dis­counts.

‘‘What we were seek­ing to do was to re­duce the level of dis­count­ing to get back to what we deemed a sus­tain­able level of re­turn across that ge­og­ra­phy,’’ Boffa said.

‘‘What we were do­ing was seek­ing to re­duce dis­counts. We were not seek­ing to above and be­yond that level of re­turn that we’re seek­ing and we didn’t.

‘‘Yes, we were chang­ing a price, but in chang­ing a price we were re­duc­ing a dis­count to get back to a sus­tain­able level for our busi­ness.’’

She main­tained that the petrol mar­ket was highly com­pet­i­tive.

‘‘My view of it is it’s first and fore­most a very com­pet­i­tive mar­ket here in New Zealand, in all lo­ca­tions due to dif­fer­ent of­fers that are out there.’’

CAMERON BURNELL/STUFF

BP’s pric­ing tac­tics have been un­der scru­tiny.

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