The only thing certain in this dynamic market is
uncertainty. No sooner did the ink dry on today’s
news brief about ExxonMobil and Chevron moving
their buyback fees (aka DFOA) to a more progressive
formulaic model that
is much more sensitive to real costs, did we find that
Chevron has apparently put its new model on hold.
Word on the street is that Chevron postponed
implementation of its new buyback fee model that
was due to take effect this month. Although there is
no official word as to why the program was
postponed, scuttlebutt says that the timing was not
right. It was apparently felt that introducing the
new fee structure at the same time marketers are
being asked to allocate product would not be a good
thing for customer relations.
In the view of Jobbers
World, this may prove to be a very wise move on the
part of Chevron because at the end of the day its
hard enough to tell a customer there may not be
enough of its favorite flavor to make it on the truck,
and at the same time tell them they may now have
more for delivery because they received less than a
minimum quantity or needed the delivery rushed.
It should be pointed out that although Chevron
reportedly still has selected lubricants on allocation,
severtiy of its allocation is in the range of 80% to
100% of the monthly lift in 2005. Comparitively
speaking, that's not too bad.
It certainly will be interesting to see how the market
responds if and when Chevron reinstitues its
progressive buyback model. From everything Jobbers
World has heard the
new model is very responsive to the realities of
buyback business and
fair in its approach to assessing real costs.
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World for all the details.