Price disrupter’s foot firmly on the gas
Gull in growth mode despite huge changes looming for fuel industry For biofuels to grow, there needs to be more government leadership.
Gull entered New Zealand shortly before the noughties and over the past 22 years has gained a reputation for disrupting the industry with its comparably low fuel prices.
The low-cost fuel retailer today has 104 service station locations and says it has invested more than $500 million towards its rapid expansion.
Opening five to seven new locations each year for the past seven years, Gull has been focused on establishing more unmanned sites without staff and retail stores, resulting in much lower operating costs.
This is what enables Gull to remain competitive on its fuel prices, says general manager Dave Bodger.
Fuel prices crashed during the height of the pandemic last year as worldwide demand diminished.
Wholesale petrol prices at the time tumbled to US$20 per barrel, but ironically neither the consumer nor petrol companies were able to capitalise on the savings as lockdowns forced consumers out of their cars and suppliers’ tanks remained full with pre-purchased fuel.
Wholesale petrol prices have since recovered, with refined crude oil now selling at around US$70 per barrel and average retail fuel prices sitting around $2.06 per litre for 91 octane and $1.30 per litre of diesel.
Barrel prices, import and freight costs and foreign exchange rates are scrutinised daily to determine if decreases in prices can be passed on to retail fuel prices, says Bodger.
Gull, which runs a relatively modest operation with an import terminal and head office team of about 30 staff based in Takapuna and Tauranga, “consistently looked to offer value whenever it can”, he says.
While retailing regular fuel remains Gull’s immediate focus, Bodger is realistic that there will be a drop in sales as more cars reach the end of their life and Kiwis increasingly switch to electric vehicles in the years ahead.
But that isn’t stopping the company from investing in further fuel sites.
“For biofuels to grow, there needs to be more government leadership.
“Our current government have announced that they will be bringing in a biofuels mandate into the future, and our submission to the Climate Change Commission, which we’re drafting at the moment, does talk a lot about biofuels; ‘We’re saying that if you want to decarbonise the existing fleet, sure, electric vehicles are sensible, let’s bring in as many as we physically can to change out the fleet, but the existing fleet is going to be with us for a long time so how do we decarbonise that piece of it’ — I think biofuels have an important part to play for New Zealand there,” says Bodger.
“We are in a sunset industry . . . we buy into the climate change commissioner’s piece that by 2050 we will be selling a third the amount of liquid that we are selling now, but we’ve got a focus on hydrogen as a fuel for heavy transport . . . and there will be some charging stations at sites.
“Yes sales will shrink but because we’re a low-cost, largely unmanned operation that is part of our solution for the future.”
Gull has been selling biofuels for almost 14 years.
It entered the New Zealand market in 1988, when it built a terminal in Tauranga and opened its first fuel site in Norton Rd in Hamilton that same year. By 2002, Gull had 27 sites around the country. It has been opening at least five new sites per year since 2014.
Its first unmanned station opened in 2005, and it ramped up expansion of these from 2009/10.
This year it will open another 10 sites — a mix of manned and unmanned — on top of the 10 opened last year. It has five future sites under construction. In recent years it has been dedicated to setting up sites around the North Island, but has recently turned its sights to the South Island, where it currently has five fuel locations.
Gull is currently mulling its options to buy existing import fuel terminals located in the South Island to aid in expanding its reach.
“In the next two to three years, we will continue to put down five or six sites a year,” Bodger told the Herald.
“We’ll get to a point where we say ‘Hey, we’ve got a good chain of service stations’. I don’t know where that is,” he said.
Since Gull’s entry to New Zealand, it has introduced self-service and competitive fuel pricing savings that were previously unseen across the country. The Automobile Association has called it “the Gull effect” whereby wherever Gull sets up a location it brings fuel prices in the area to a more competitive level.
Bodger says running a tight ship throughout all aspects of the business further enables Gull to pass on fuel savings.
“We don’t sell oil, we don’t sell cigarettes, we don’t have to have 20 people [in the head office] deciding whether to put the Mars bar or the Moro bar on the top shelf. It’s about gas and diesel for us,” he says, adding that he was proud Gull didn’t have a call centre.
“We are a small place and we want to keep that small mindset that will enable us to continue to give good value to the customer. We’re very proud that we don’t have a call centre.”
Bodger, who has been general manager of Gull for almost 15 years, says stirring up competition and keeping rivals on their toes over fuel prices kept things fun.
“The people that work here are here to have fun, and stirring things up is definitely part of having fun. We are very proud of disrupting the industry and enjoy it.”
Gull has 68 unmanned sites and over 30 manned sites with retail stores, operated by Night and Day. Around 10 per cent of the petrol sold in New Zealand is from Gull.
It recently opened its 104th site, but will this morning reveal details of a promotion to mark the opening of its 100th site in Wellington just before Christmas.
Gull was acquired three and a half years ago by Ampol Australia — the largest fuel retailer in Australia.
Dave Bodger, general manager, Gull