VituVingiSana wrote:
Of course, the question is... does the 3/- margin encourage dealers to invest? Maybe not...
An OMC will not look at the 3bob ERC whines about but the amount being made at the whole margin plus other income a station generates.
Besides the ERC margin is a maximum and OMC's rarely make this especially when dealing with major buyers (KQ, Kengen, Bamburi). Consequently, OMC's will continueto construct and upgrade stations because they are most profitable avenues
.
Regarding stations see below
DODO (Dealer Owned Dealer Operated )An investor owns a plot, builds the station and approaches an oil marketer to brand the station. He enters in to an agreement to buy all the product from that marketer. Depending on his negotiation skills, the dealer can get up to 5bob per litre.
CODO (Company Owned Dealer Operated )These are the majority. The company owns the premises. Either by having bought the plot and then constructed the station or having entered a long term lease for the plot and then constructed the station. The company then looks for a financial dealer with finacial capital to run the station. Dealers gets at most 2.50 per litre.
CODO (Company Owned Company Operated )These are stations owned and run by the company. While it is illegal for an OMC to run a station, several situations make this a necessity e.g. when you have thrown out a dealer or no dealers are willing to take a station).A legal loophole exists where a company can run the station thro a sales rep (like KK) or an SPV (like Total). Here the reatil margins are added to the price thus the margin is made at the wholesale price and not retail price.
Itari muting'oe ihuragwo ngi ni Ngai