In The " Small Print " !

Remember that time after the end of the second world war when a new petrol station seemed to be springing up on just about every corner block across the cities ?  A clutch of international oil companies was competing for " market share " and as fast as these new brand stations were built they were placed in the hands of franchisees.

That was a time when the word " service " really did apply to " service stations ".   When a motorist drove in a team of people descended to not only pump petrol, but to clean the windscreen, check the oil and water, adjust the tyre pressure - and often present gifts such as drinking glasses or a set of steak knives.

Those were the days when Australia was host to a plethora of oil company names that have long retracted to the handful of base oil companies, and those old service stations no longer offer a " grease and oil change " or other minor repairs.   Today they have become the new breed of " convenience stores " - that also sell petrol.

Some are owned by oil companies and run by their direct employees, but the vast majority are still franchisees in direct competition to one another and this results in the price competition we see daily.  The price of petrol can vary greatly from suburb to suburb as franchisees adjust their selling margin to attract greater throughput.

This industry recently drew newspaper headlines as an under payment of employees scandal emerged.   It seems that many franchises could not break even unless they cheated on wages, offering cash in hand deals below the minimum hourly rate or demanding employees work unpaid overtime.  The government cracked down hard and considered legislation to make correct pay a responsibility of the oil company owner with massive fines for irregularities.

One of the major principals of franchised petrol stations is Caltex.  It appears that this implied responsibility to be in control of wages paid by franchise operators has resulted in Caltex resorting to the fine print in contracts to terminate agreements.  Under these agreements, Caltex can seize control of a petrol station when even a modest underpayment of wages has taken place and can do this without any reimbursement to the franchisee.

It is reported that when franchisees have refused to take part in audits of their books, over a hundred franchises have been summarily terminated and the business placed under direct Caltex control in recent days.  It seems a new way of thinking has emerged on the brand market share issue.

It will be to the detriment of drivers wallets if the oil majors retreat from the franchise system and take direct control of petrol resellers.   In such a situation, the selling price is more likely to be uniform across the state and dictated from head office in place of the competition that presently takes place between individual franchisees.

This also raises a security issue.   The number of outlets selling petrol has decreased sharply from those heady days of multiple brand names.  We have not had a strike in the oil industry for some years, but most drivers well remember the days of odds and even number plates used as a rationing measure and petrol sales being restricted to ten dollars on any one day.  The misery of long queues and petrol stations only opening for limited hours.

Should the sale of petrol retract to just resellers owned and operated by the oil majors there would be little incentive for retaining such a wide spread of resellers.  Profitability would be enhanced by restricting sales to a lesser number of major outlets and making motorists queue for service.

The motoring public will follow this emerging trend with more than passing interest.