Diesel Users Coop

Submitted: Wednesday, Mar 12, 2008 at 22:14
ThreadID: 55492 Views:3542 Replies:10 FollowUps:21
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There is now public information that we are being duped.

One major oil company told the Qld Fuel Subsidy Commission of Enquiry that at truck stops only 4.5% of fuel was sold at board prices, and at it's other retail outlets only 35.5% was at that price.

As the commission assessed, the greater buying power of commercial consumers of diesel was such as to make this situation so different to the balance that pertains in the retail ULP market.

So, isn't it time - time for a group of us - perhaps the National Association, or a new membership association, to get together and do some negotiating with one of the big oil companies.

Clearly at present Woolworths can sustain the 10 cents/litre discount that they are offering on up to 150 litres from signing up to their Everyday Rewards Cards (just now in SA - I know they've been around in other states longer), so this could be the starting point of a negotiation with a couple of the big companies.

I wonder how many diesel users there are on this site as a percentage of the total, and how many users in total...

Or maybe the 4WD associations should band together and go and do some collective bargaining? What is their collective bargaining power - numbers of diesel using members?

What are your thoughts on the best approach?

Cheers
Andrew.

PS - if you're after a lot of less than compelling reading the CoE's findings are here: http://www.fuelsubsidycommission.qld.gov.au/documents/partc.pdf
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Reply By: Member - extfilm (NSW) - Wednesday, Mar 12, 2008 at 22:27

Wednesday, Mar 12, 2008 at 22:27
Andrew,
I found out the other week, any of my diggas over 5 tonne will be entitled to an 18c per litre rebate....... Considering one of the diggas is going through 150 litres per day that will be a saving of over $150 per week......
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Follow Up By: Andrew from Vivid Adventures - Wednesday, Mar 12, 2008 at 22:37

Wednesday, Mar 12, 2008 at 22:37
presumably the Fuel Tax Credits... they don't apply to vehicles less than 3.5 tonnes GVM...

This is getting a better price from the retailers that I have in mind.

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Follow Up By: Member - extfilm (NSW) - Wednesday, Mar 12, 2008 at 22:56

Wednesday, Mar 12, 2008 at 22:56
Cool...... I thought it was 5 tonne and up...... if thats the case then I have 3 diggas that can claim it...... although the other 2 only go through about 60 litres a day
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Follow Up By: Andrew from Vivid Adventures - Thursday, Mar 13, 2008 at 00:10

Thursday, Mar 13, 2008 at 00:10
It might be 5 tonne - get some advice though. www.ato.gov.au for the info on it if you want to do the research yourself.

The Rebates apply regardless of the price you pay for your fuel however.
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Follow Up By: Member - extfilm (NSW) - Thursday, Mar 13, 2008 at 00:37

Thursday, Mar 13, 2008 at 00:37
I think it is 5 tonne... was talking to the ato about 4 weeks ago about the subject. and yes they regulate it by the litres. they will be giving back 18c per litre. Plus with a BP fuel card they save u 5% on fuel which equates to around 8c a litre
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Reply By: Footloose - Wednesday, Mar 12, 2008 at 23:11

Wednesday, Mar 12, 2008 at 23:11
What proportion of the diesel stocks are consumed by private motorists?

And out of those, how many do you think wish to be organized into some sort of pressure group?


Sorry mate but I can't help thinking that you're whistling in the wind:((
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Follow Up By: Andrew from Vivid Adventures - Wednesday, Mar 12, 2008 at 23:58

Wednesday, Mar 12, 2008 at 23:58
just need a big enough to group to put a proposition...

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Follow Up By: On Patrol (East Coast) - Thursday, Mar 13, 2008 at 17:25

Thursday, Mar 13, 2008 at 17:25
Try the national 4wd association National 4wd assoc
And/Or NRMA

Colin.
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Reply By: Muzzgit [WA] - Wednesday, Mar 12, 2008 at 23:44

Wednesday, Mar 12, 2008 at 23:44
Part of the reason fuel has gone up so much, apart from the wholesale price of a barrel going up, is the fuel suppliers themselves are adding on a little extra every month or so to cover the discounts they give you for shopping in their partner grocery stores.

It's called retailing!!!

Every cent of discount offered is already covered, usually by the consumer through inflated retail prices. Sometimes the manufacturer gives bulk sales discounts which the retailer will pass on, but rarely will the retailer give you anything out of his own pocket, unless it is to move old stock, which does not apply in this case.

THERE AINT NO SUCH THING AS A FREE LUNCH.

The real culprit is the federal government who tax the bejeesus out of us for fuel and then slug us with 10% grab and snatch tax [GST] at the cash register.

They think we're silly.....hang on, THEY KNOW WE ARE

Today I put about $170.00 diesel into my patrol and the receipt showed me that I paid about $18.00 in GST! Yet I know and you know that there is already $60.00 or so in taxes on that fuel. [I'm guessing here, I don't know the actual figure, but it's close]

Yes we are being RIPPED OFF but you are pointing your arrows at the wrong people.

Without GST on fuel, diesel would be 15 cents a litre cheaper and my fuel bill today would have been around $154.00

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Follow Up By: Andrew from Vivid Adventures - Thursday, Mar 13, 2008 at 00:05

Thursday, Mar 13, 2008 at 00:05
Huh? What are you smoking? Fuel suppliers and retailers are largely the same bunch anyways.

If a commercial business can get a discount based on their volume, and if in a retail setting they can offer up to 10c a litre off, then a large enough group - but perhaps even then, only a small percentage of the diesel users, might be able to negotiate a volume purchase deal.

Buyers groups have been around for years in various sectors, particularly the farming sector...

This is not a question of who is ripping us off... nor a demand for a free lunch - it is just a question of a little more negotiating power.

Blaming GST demonstrates only a very short memory - prior to 2000 the taxes were even more in most states. Sure there are taxes. Sure they are obscene... but it does help fund the government machinery which like it or lump it is always going to need funding on way or another. Which pocket would you like it taken out of.

So back to the question, if you could join a buying group that would deliver 10c a litre or more off retail sales of diesel, would you be in it?
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Follow Up By: Muzzgit [WA] - Thursday, Mar 13, 2008 at 00:38

Thursday, Mar 13, 2008 at 00:38
'''''''''''''Fuel suppliers and retailers are largely the same bunch anyways''''''''

That's what I was saying!


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Follow Up By: Dave(NSW) - Thursday, Mar 13, 2008 at 13:42

Thursday, Mar 13, 2008 at 13:42
I would rather pay the $18.00 GST than the $60 State taxes!!!
Cheers Dave...
GU RULES!!

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Follow Up By: Gramps (NSW) - Wednesday, Mar 19, 2008 at 09:14

Wednesday, Mar 19, 2008 at 09:14
"The real culprit is the federal government who tax the bejeesus out of us for fuel and then slug us with 10% grab and snatch tax [GST] at the cash register"

Not quite so. The fuel excise is capped at 38.143 cents per litre and has been since 2001. That is a FIXED rate not a percentage. The GST is 10%, ALL of which is distributed to the States, including the basket cases that have been subsidised by NSW and Vic since Federation.

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Reply By: Member - Hugh (WA) - Thursday, Mar 13, 2008 at 00:01

Thursday, Mar 13, 2008 at 00:01
Hi Andrew,

Appreciate the sentiments but do you think the average consumer can compete? For example, Rio Tinto alone in WA go through 1 million litres diesel per day. That's buying power.

Hugh
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Follow Up By: Andrew from Vivid Adventures - Thursday, Mar 13, 2008 at 00:07

Thursday, Mar 13, 2008 at 00:07
It is not about the average consumer nor about competing.

It is about a big enough group of diesel using consumers and small businesses getting together.

Sure - it won't be the same deal as a Rio, but hopefully the same as a decent sized trucking company - from my intelligence 80,000 litres a month can bargain a discount of about 14 cents a litre.
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Follow Up By: Muzzgit [WA] - Thursday, Mar 13, 2008 at 00:36

Thursday, Mar 13, 2008 at 00:36
OK. Yep, I'll buy in. Do I have to drive to Sydney to get it or are the fuel retailers going to give me a discount for being in a co-op?

Why should they?

It's like that silly idea of no one buying fuel next tuesday to hurt them. It just means I will fill up the day before or the day after, but the fact remains I still have to buy it!
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Follow Up By: Andrew from Vivid Adventures - Thursday, Mar 13, 2008 at 07:56

Thursday, Mar 13, 2008 at 07:56
My plan would be to start negotiations with the independent chains, with the objective of setting the level at which to negotiate with the bigger guys, but if Vic 4WD association is already working with BP, it should be nationwide.
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Reply By: Member - John (Vic) - Thursday, Mar 13, 2008 at 00:10

Thursday, Mar 13, 2008 at 00:10
Already being done.
Four Wheel Drive Victoria has been in negotiations with BP to obtain a 10 cent per litre fuel discount for members of Victorian 4wd clubs for quite sometime now.
The negotiations also involve a further volume rebate that will be paid to the Association to assist with funding the professional operation of 4wd Vic.

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Follow Up By: Andrew from Vivid Adventures - Thursday, Mar 13, 2008 at 00:22

Thursday, Mar 13, 2008 at 00:22
Thanks for that John.
I'll follow up with you soon.
Cheers
Andrew a bit surprised the National Association hasn't got involved.
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Reply By: Member - DOZER- Thursday, Mar 13, 2008 at 07:30

Thursday, Mar 13, 2008 at 07:30
Andrew
When Woolworths started doing the 4 cents off, that proportion of 70 cents per litre was about 6%...roughly thesame as 10c on $1.50....so if they were legit, they would be offering 10c all the time and 25 for special occasions.
The retail price of fuel is roughly 50% taxes, which probably puts a hole in my arguement on discount...
Try and get a discount when your filling up the mower can or boat tank....no road tax should be payable in that situation (remember the 3c x 3 years which bexame 4c x forever) nor should any digger have to pay road tax for fuel if it is not for driving on the road.
Rio would be using industrial diesel in their machines....road tax exempt...same as bluescope.
I think the time is fast approaching where we will have to sell our 4wd's and buy battery/solar powered ones, or we wont be able to afford the excise bill....
Andrew
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Follow Up By: Andrew from Vivid Adventures - Thursday, Mar 13, 2008 at 07:54

Thursday, Mar 13, 2008 at 07:54
Just feel lucky you're no in Qld...

If you're filling up your mower, technically you don't get the subsidy, therefore they should charge you 8.4c/l more!
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Reply By: MEMBER - Darian (SA) - Thursday, Mar 13, 2008 at 09:45

Thursday, Mar 13, 2008 at 09:45
Isn't the Woollies 10c per litre discount a one-off ? Just for signing up to that card game ? After that back to 4c ?
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Follow Up By: Andrew from Vivid Adventures - Thursday, Mar 13, 2008 at 10:19

Thursday, Mar 13, 2008 at 10:19
you got it.
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Reply By: MEMBER - Darian (SA) - Thursday, Mar 13, 2008 at 09:50

Thursday, Mar 13, 2008 at 09:50
I should have said - it seems to me that diesel suppliers would sell 99% of their product to the corporate and government sectors, so all sorts of deals, discounts, rebates and tax claiming would apply - the bowser price would be academic to a lot of those users. For the little product they sell to us private users, the oil companies couldn't give a bugger what we think of the bowser price !
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Follow Up By: Andrew from Vivid Adventures - Thursday, Mar 13, 2008 at 10:20

Thursday, Mar 13, 2008 at 10:20
yep. Exactly.
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Reply By: Muddy doe (SA) - Thursday, Mar 13, 2008 at 11:35

Thursday, Mar 13, 2008 at 11:35
Hi Andrew,

With Salary Sacrifice I am issued a Caltex card and a Shell card for purchasing fuel (and capturing odo readings). The price paid on these is the lower of the pump price OR the "daily metro list price" which is usually a few cents below the pump price.

This is really handy in regional areas as the pump price is usually a bit higher. I filled at Lyndhurst on a trip and by using the Shell card I paid nealy 20c/l less than the pump price as it does not seem to matter where you fill up - they always charge the metro list price.

Small businesses and individuals can apply for Shell/Caltex/BP cards. I don't know why more people don't - though a $2.00 monthly admin fee on a Shell card might make a dent in any savings for a lower volume user.

As to forming a buyers co-op, I can't imagine the amount of administration involved, firstly in the setup and negotiation with "Big Oil" and then in the ongoing admin of memberships and possibly issuing membership cards and vouchers or whatever claim mechanism hoops the oil companies might put on, would be worth the eventual discount.

In thinking of the actual servo purchase, would members be using some sort of rebate voucher or discount card? Would members perhaps send in receipts for claiming discounts which would be credited to an account? There are any number of methods of dealing with actually getting or claiming the discount but to make it worthwhile in a big enough group to get a decent negotiating position for any sort of discount then you are looking at a very substantial amount of work for somebody. Long term that would mean wage costs and admin costs.

The established 4wd associations may be the best (or only) groups even capable of dealing with the organisational and administrative requirements of a scheme like you suggest but it would be a long hard road to set it up and as people in the associations and their enthusiams change over time it may just end up another dud that ends up costing lots of time and money for little benefit while the oil companies just keep on charging and the government just keeps on charging more taxes and we just keep paying an paying and paying!

Not knocking you for putting it up there but I fear that it will be yet another Good Idea that falls apart at the execution stage.

Cheers
Muddy
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Follow Up By: Muddy doe (SA) - Thursday, Mar 13, 2008 at 11:42

Thursday, Mar 13, 2008 at 11:42
And for those of us that DO already use fuel cards then this whole argument id possibly academic as no further discounts apply when using the cards (we don't get the woolies/coles 4c offers for example).

How many members on here would be Salary Sacrificing/Small Business Owners or driving campany cars and thus already have discount arrangements?

Cheers
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Follow Up By: Member - Geoff C (QLD) - Thursday, Mar 13, 2008 at 21:46

Thursday, Mar 13, 2008 at 21:46
How do we go about getting a fuel card and how much does it save?
Thanks, Geoff
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Follow Up By: The Landy - Wednesday, Mar 19, 2008 at 09:01

Wednesday, Mar 19, 2008 at 09:01
Well put Muddy, I'm all for reducing the cost of fuel, however the problem will be in the execution of this type of scheme. The reality is that the cost of adminisration wil be high, possible wiping out any cost savings gained, and secondly, it will possibly tie people in to one supplier, unless something is negotiated with all suppliers.

Call me a cynic, but I suspect the volumes would not be high enough and besides if the fuel companies say 'nick-off' were still going to buy their fuel. So I suspect the answer will be 'nick-off'.

I'm sure the motoring associations such as NRMA have sufficient membership clout to get something like this going - so why haven't they?

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Reply By: spudseamus - Thursday, Mar 13, 2008 at 17:38

Thursday, Mar 13, 2008 at 17:38
im getting all the bits together and gona make my own!! ive had enough
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Follow Up By: Andrew from Vivid Adventures - Thursday, Mar 13, 2008 at 17:39

Thursday, Mar 13, 2008 at 17:39
Shhh or you'll have to pay the fuel excuse.
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