Terry Collins: AA Fuel spokesperson says long awaited fuel price drop could be coming with major merger

Fuel providers NPD and Gull announced a proposed merger of the two entities on Wednesday, December 24.

The decision now sits with the Commerce Commission as they decide if the merger will increase or decrease competition in the market.

Both companies are already low-cost providers, so, it is hoped the proposed merge could lower prices for consumers.

Customers have been awaiting a fuel price drop for a while now, as oil prices have fallen, but the change has not been seen at the till. 

AA Fuel spokesperson Terry Collins told Andrew Dickens, "it's the largest margin I've seen between landed price and retail price, and these companies, what they need to do is not just offer discounts and specials on particular days, but we need to see across the board drop in our fuel prices currently."

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:09):
You're listening to a podcast from News Talks be follow
this and our wide range of podcasts now on iHeartRadio.

Speaker 2 (00:16):
It was announced that the petrol companies MPD and GULL
would like to merge and there is hopes obviously that
this could lead to cheaper fuel. The decision now less
rests with the Commerce Commission, who must decide whether the
merger would boost competition or reduce it. They will be
doing this in January. So I'm joined now by the

(00:36):
AA's fuel spokesperson Terry Collins. Good onding to you.

Speaker 3 (00:39):
Terry here, Good morning.

Speaker 2 (00:42):
So we've been complaining about our punk prices because the
price of oil has been going down, but it's not
being seen at the bowser. Do you think we can
be optimistic about lower fuel prices of MPD and GULL
are allowed to merge.

Speaker 3 (00:56):
Well, the one thing Gal has been known for us
what was called the Gull effecting my fester in the market,
and this was everywhere that they opened the low cost
operating service station looking all was cheaper and then the
competition had their prizes to match it. So both Goal
and MPD for a very similar model which is a
low cost, no staff, just the pumps, of the bowser

(01:17):
and the ability to pay by their card and therefore
they keep their overheads down very low, and they did
a cheap fuel. So hopefully with the two of them
combining and the synergies around it will continue to see
even lower fuel. That's my wish. Yeah, so that hopefully,
I think they really bring that local thing. Also, the
interesting part around it too has been gold had to

(01:39):
be sold because am Pole, who were now there where
they passed owner brought Z and under their purchase agreement,
am Pole, who was zed had to supply them with
fuel for five years from May of twenty twenty two.
So probably what was mergent is now as it allows
them as a joint entity to secure their fuel supply
long term into the future.

Speaker 2 (02:01):
Yes, I understand that they're going to combine the distribution
centers into a center in Mount MONTINUI and the toweling
and district and they're going to be providing a billion
liters of fuel annually. That's a lot of fuel and
with that amount of throughput they could be able to
sort of screw down some pretty good deals.

Speaker 3 (02:20):
Yeah, it's let's hope that they can. What we want
to see is the AA is those deals being passed
on to the motorist. Because what we're seeing now we
monitor weekly with all the inputs. It's the landed price,
which affects the price of world refining, shipping taxes, to
est the missions trading scheme, all those cost puts into
a fuel But we're seeing that margin. It's at a

(02:40):
level that we've never seen before since I've worked here.
It's the largest margin I've seen between landed price and
retail price. And these companies what they need to do
is not just off of discounts and specials on particular days,
but we need to see across the board drop them
their fuel prices.

Speaker 2 (02:54):
Currently all right now. GULL is primarily in the North Island.
They've been going for twenty five years. MPD is South
Island based, they've been going for fifty five years. The
question here though, will be who's going to eat who.

Speaker 3 (03:08):
I don't think it's a case of who eats too who.
I think MPD is Nelson Jorn Distributors. It's a family
based New Zealand owned industry. They know their business goal,
has a management scheme, but it's owned by an investment company.
So to me, how I think about it is this
investment company is giving it to a safe, pure of
hands for a family operated business who know how to run.

(03:29):
They all business, the fuel business, and so they're kind
of I don't know. I think it's just a really smart, strategic,
long term plan for the growth of both of them.

Speaker 2 (03:38):
Okay, So of course the ComCom has to decide whether
this is going to reduce competition or not. Will they
look on this favorably or not.

Speaker 3 (03:46):
I can't make a decision for the Communist Commission. What
they're going to look into. What I do now is
that they if they can bine together and bring the
synergies of both the companies and the advantages of both
that they bring with distribution and their terminals and other
things to it, and pass those prices on, then it's
going to be good for competition. So that's the kind

(04:07):
of fact of that the competition, sorry, the Commerce Commission,
where we look at will they bring those sharp prices
to us and eat the lunch of the big ones
for one of them bitter un and if they do,
I think that they will get approven.

Speaker 2 (04:19):
And on another note, is Mobile still looking for a buyer?

Speaker 3 (04:23):
I'm not sure about what Mobile's doing, but I do
know that mobiles supply MPD SO and they supply like
Allied and some other other companies as well. So the
businesses is around not just their own brand, but they
supply fuel for a number of independents.

Speaker 2 (04:36):
But they may take a hit with the new organization. Terry,
I thank you so much Terry Collins as the AA
Fuel spokesperson.

Speaker 1 (04:43):
For more from News Talks B listen live on air
or online, and keep our shows with you wherever you
go with our podcasts on iHeartRadio