Gas station services pump up fuel distributors’ profit

To be competitive and because the company's officials wanted to attract more customers, from last year OMV extended its portfolio of auxiliary services, besides classic services such as coffee, drinks and food.
“OMV stations are created as service centers. This includes shops and VIVA restaurants, the car wash and service as well as the ATMs installed at the gas stations. Last week, OMV signed a unique partnership with Unicredit Leasing which will permit clients to pay leasing instalments in OMV gas stations. We have also launched the cashing service for credit instalments of HVB Bank clients,” Vlad Seitan, sales manager at OMV Romania, told Business Review.
And MOL Romania has expanded its service portfolio to offer wireless internet. “MOL offers restaurant services, fuel cards and also a fidelity card, wireless internet – a collaboration with Zapp – electronic mobile phone recharging at Vodafone and free magazines. Also, we have collaborated with OTP Bank for the OTP-MOL credit card”, said Zsolt Szalay, CEO of MOL Romania.
Petrom and Rompetrol offer credit cards with online platforms to trail how the money was spend, a service used more by companies with a car fleet. Rompetrol collaborates for this service with MasterCard. Smaller fuel distributors have signed agreements with telecom operators or utility suppliers for these types of services. “From March 2007, Distrigaz Sud clients can pay their gas bills in 19 Agip gas stations, the majority being in Bucharest. Our partner is Citibank,” said Viviana Zimbilschi, chief of external communication services at Distrigaz Sud. Vodafone officials confirmed that Vodafone bills can be paid in Agip and OMV gas stations.
And the plans to expand supplementary services don't stop here. Specialists say that this niche market is just at the beginning. “We want to introduce other financial services, as well, starting from paying a mobile phone or utility bill, to buying concert tickets and more,” says Seitan. The MOL Romania official added that the company is analyzing the opportunity of introducing new services. “Recently we launched the new brand Servus, a non-stop restaurant, and also wireless internet in 13 gas stations. Both services will be extended in all MOL stations,” said Zsolt Szalay.

A satisfied client means more profit for fuel distributors
Company representatives say that these services were created to satisfy the needs of customers who want to solve as many problems as possible in one place, with minimum time and effort. But, beyond this explanation sits solid financial results – profit. “At present, 25 percent of our turnover is obtained from the non-oil segment, the rest being obtained from fuel sales. Last year we registered an increase of approximately 45 percent in filling station shops sales. Further to the introduction of the financial services, the clients flow increased by around 10 percent in some locations,” said the OMV representative. Meanwhile, MOL Romania reported that 20 percent of its sales come from auxiliary services. Last year, the company registered a turnover of EUR 524 million and a net profit of EUR 6 million. In the first quarter of this year MOL Romania reported a turnover of EUR 114 million. These kinds of numbers have raised companies' interest on the niche of auxiliary services.

Commissions are still low
For several of these types of services fuel distributors have begun to charge a fee. “To pay credit installments the charge ranges between EUR 1.2 and EUR 2.11. For cash transfer operations, the tariff has a fixed component of EUR 3.33, plus a variable commission, subject to the amount transferred,” said Seitan. According to him the expansion of the services portfolio in OMV stations will require an enlargement of the space dedicated to such services. He added that OMV is presently working on a project which will be made public as soon as it is completed.
Fuel distributors have big plans in development for their their station networks. For example, MOL Romania has 121 gas stations and this year plans to open other eight. In 2008, the company will open seven stations. Meanwhile, Petrom opened 16 gas stations in the first quarter of this year and has in mind to build another 32.

Other companies test the market
Although these kinds of services in gas stations have just begun their offensive, other companies are showing their interest in offering auxiliary services. For example, Lukoil told BR that it was negotiating with several banks to introduce ATM and money transfer service in all 300 of its gas stations. Also, a representative of telecom operator Orange said the firm is interested in such partnerships with fuel distributors.
“Regarding bill payment we haven't yet received propositions on this matter, but I can say that Orange is interested in this type of solution,” said Oana Solca, Orange's web shop & web care marketing manager.
Representatives of financial companies, already partners of one or other fuel distributor, say that in the future new ways of taking a loan or paying leasing instalments are expected to appear.

Dana Ciuraru

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