In this Issue of Jobbers World Online News Briefs
  • More on Allocation and Buybacks

  • More on Allocation and Buybacks

    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 to pay 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, the 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.

    Again, subscribe to the full print version of Jobbers World for all the details.

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