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Cheap Fuel Costs More

by Judy Delaney, Global Partners LP

Performance issues lead to unhappy customers lead to shrinking market share

The common misconception that every fuel dealer is selling the same product — extracted from the same oil fields, processed at the same refineries, and purchased as is from the same wholesalers — means that many consumers are making decisions based exclusively on price. While some of the more price-centric brands tend to embrace this narrative, to regard fuel as a mere commodity and to market it as such is problematic for fuel dealers and detrimental to our industry as a whole. The truth is: cheap fuel costs more.

Many assume that because the fuel they buy at the rack meets ASTM specifications, it’s of pristine quality. This is another common misconception. ASTM specs are simply minimum standards of fuel quality to ensure that the product leaving the refinery can be safely used for its intended purpose. ASTM makes sure the fuel works; it’s up to those who handle the fuel on its journey to the consumer to make sure it works to its maximum potential.

Fuel quality is compromised at every stage of the petroleum supply chain — from refining and transportation to storage and blending. Generic middle distillates are at high risk for several common deficiencies. Water and microbial contamination, particulate buildup, and wax formation are just a few of the usual suspects that degrade fuel quality, plug filters, corrode tank linings, and damage injector systems once introduced into a fuel system.

Today’s ultra-low-sulfur diesel has its own set of operability concerns. Because sulfur acts as a natural lubricant, ULSD is “dryer” than traditional diesel, meaning that it’s lower in lubricity, more prone to holding water, and more susceptible to microbial contamination. Salts that are commonly found in ULSD — some of which are intentionally added, others from contaminants — are less soluble in ULSD, and can be abrasive to engine components and deadly to fuel injectors. The refining process used to remove sulfur also removes oxygen, nitrogen, and other functional elements, yielding a fuel that is less stable in storage. ULSD is also more solvent, or liable to loosen filter-plugging deposits in tanks.

Unfortunately, as many consumers purchase their fuel based on price, these are the issues that they’re regularly experiencing. At a time when the petroleum industry is fighting tooth and nail for market share and losing volume across the board, having a suboptimal product represent a significant portion of the supply pool does little to help our cause.

Today’s fuel additive technology can eliminate fuel problems and optimize performance to create a premium product tailored to meet the needs of customers. Cold flow additives prevent fuel gelling to keep diesel engines and heating systems running smoothly through the winter. Detergents keep tanks and injector systems clean. Combustion catalysts increase fuel efficiency and decrease emissions. Corrosion inhibitors protect tank linings. Biocides control microbial contamination. Water control treatments prevent fuel degradation and other water-related issues.

Biodiesel (though not an additive) is a cleaner burning, renewable fuel that can be blended with traditional diesel at rates that beat natural gas on environmental benefits. This is the kind of information that fuel dealers should be sharing with their customers. For a negligible upfront cost, they can have a far cleaner, more efficient, and higher performing product that will quickly pay for itself in the form of fewer service calls, less down time, and less customer aggravation.

High-performance fuel can only serve as a differentiator if consumers are educated on the subject. Raising consumer awareness via websites, social media, marketing brochures, traditional advertising, customer newsletters, and through personal interaction are all good ways to market fuel quality. But the most effective marketing strategy is to provide evidence that the enhanced fuel actually works. Showing customers their fuel filters, tracking efficiency measures, and recording drops in maintenance issues go a long way toward debunking the tired “oil is oil” narrative, strengthening your value proposition, and building loyalty not only to your brand, but to our industry.

Judy Delaney is the Premium Fuels Manager at Global Partners LP. She can be reached at jdelaney@globalp.com.