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In the flood of negative information about the financial crisis, the falling prices of oil and fuels is one of the few good news items. We talked with Benzina’s Executive Director, Martin Durčák, about oil, its influence on the economy and on Benzina’s position on the Czech market.

The price of unleaded petrol has gone down by almost ten crowns since the summer; the price of diesel has decreased to under 30 crowns a litre after a year. Will it continue?
Another decrease like the current one is very unlikely. Even though today it is hard to forecast anything. If you had told someone this July, when predictions that the price of oil would increase up to 200 dollars a barrel appeared, that these prices would not go any higher but would actually decrease sharply, nobody would have believed you.

The price of crude has dropped by a third since July. Why have the prices of motor fuel so little in comparison with this?
The costs for the purchase of crude oil are only partially projected into the final price of motor fuels. The receipt that a driver gets at a petrol station is comprised to the greatest extent by taxes, i.e. the fixed excise duty and the nineteen-percent VAT. For motor fuels this total taxation represents more than half of the final price. In fact for unleaded petrol it is now 62 percent.

How do you explain oil's sharp drop? Is the financial crisis responsible for it?
It is not the only reason, but it is essentially possible to say that the expected slowdown of economic growth in developed countries is among the deciding factors. The uncertainty of the financial markets also undoubtedly strongly slowed speculative purchases and there are other influences here that are pushing the prices down. There is a certain stocking up of the market by oil products, which is especially valid for the American market, where demand for petrol has decreased, plus the geopolitical situation in the countries that extract crude has settled down.  It is a bit of a paradox. After a long period of fear of a lack of crude oil, it only took a few months to show that there isn't so little.

Politicians have assured us, they the world financial crisis will not affect the Czech Republic that much. Aren’t dropping fuel prices the first sign of an impending recession?
Consumption is certainly decreasing (according to statistical data by one percent compared to last year), but it was already lower in the first half of the year and during the summer. So some other influences appeared there:  the results of economic packages and the increasing prices of motor fuels from April to July. But the fact that consumption did not even increase after the prices at petrol stations dropped dramatically to the lowest level from the beginning of 2007 may also be signal of a slowdown and maybe even a recession.

How is this slowdown seen in your company’s economic results?
Luckily our network achieves greater dynamics than the market as a whole thanks to the higher sales of diesel fuel. Thus this year has been quite successful for us. Even though we have continued with extensive modernisation and some petrol stations were temporarily out of operation, we managed to increase sales by three percent. It is true that we originally counted on a greater increase, though.

What is Benzina’s share of the Czech market?
Even though we had less than ten percent as recently as 2005, we currently contribute to 13.5 percent of the sale of fuels. But that is not the final target. Within two years it should be 15 percent and in a medium-range timeline we want to achieve a twenty-percent share. We would like to increase the number of filling stations by a third, from the current 334 to 440.

That is not an easy task. How do you want to convince drivers to tank up at Benzina?
We have the largest and densest network of petrol stations. Most of them have gone through modernisation or reconstruction, many just recently. They have new shops, top-rate car washes and facilities that make it possible for them to offer truly high-quality services. We began with gastronomy, where we make use of three various concepts for refreshments - Café Minute, Bistro and Snack. Easy accessibility, top-rate services and quality – those are the advantages with which we can easily aspire to the position of leader on the Czech market.

Your promotional event with DVDs recently obtained a PETROLaward for the greatest contribution in the field of petrol station services. How much did it increase your sales?
We didn’t calculate it out. The members of the jury and the public appreciated the idea: to offer DVDs for a reasonable price as a bonus to support sales. We were the very first to come up with that idea and thanks to this cheap DVDs have come to the Czech market. Now a lot of other vendors offer them and so we are getting ready to stop this loyalty programme. We are preparing a new action, which should once again be innovative, set a new trend. I wouldn’t like to talk about the details yet. It is supposed to be a surprise that we will introduce next year.

How did you celebrate the fiftieth anniversary of the Benzina brand this year?
With the completion of the rebranding of our premium Benzina plus network. This network is moving the brand forward significantly, so we can say that Benzina paradoxically got younger in this anniversary year. In the publication that we issued for our fiftieth anniversary you can see how it gradually changed over time. The book, with several period photographs and which also maps the development of the sale of motor fuels in the Czech Republic, garnered a lot of attention and so we are considering a reprint.

What would you say is the biggest change?
Even though few people realise it, the Czech Republic has some of the most modern, if not absolutely the most modern, petrol stations in Europe. Nevertheless when comparing the historical photographs a significant transformation is most visible: A huge move from the pumps that were built and operated as "devices for the distribution of fuels," to today's Beznina with a palette of quality supplementary services. The offer of a shop, refreshments, aromatic coffee, fresh bakery products, clean water for washing your windows, clean toilets - that is all a matter of course now.

Are these services more important than the price of fuel for motorists?
The price plays an important role but the overall quality of the offer is more and more interesting for them. Our recent survey confirmed an interesting trend. Younger and more demanding drivers, often from higher income groups, tank up at the premium Benzina Plus. They are looking for deluxe services and premium fuels, i.e. high-octane Verva 100 petrol or Verva Diesel. More conservative and careful drivers go to the classic Benzina. They appreciate Benzina’s stability and the guaranteed quality of all fuels sold.

How do you “guard” the quality of the fuels?
Our delivery system and internal regulations make it practically impossible for low-quality fuel to appear in our network. We monitor the quality very carefully. Each year we take 1500 samples to be inspected. This care pays off, which the independent inspections carried out by the Czech Trade Inspectorate confirm. The CTI has already taken 200 samples in the Benzina network this year and didn’t find any faults in a single one. And our Verva Diesel was recently rated the best premium fuel sold on the Czech market.

Benzina is part of the Unipetrol group, which belongs to the Polish concern PKN Orlen. Try to briefly introduce it…
The group is comprised of companies that are involved with the production and sale of refinery products, chemical and petrochemical products, polymers, a wide variety of fertilisers and special chemicals. In addition to Benzina that includes processors of crude oil, Česká rafinérská and Paramo, the petrochemical production of Unipetrol RPA and other companies, such as Unipetrol Doprava and Petrotrans.

How is PKN's influence felt?
From Benzina’s perspective, very positively. Thanks to PKN’s entry to Unipetrol we have been able to use its experience with the successful reconstruction of the Polish CPN network into the newly-conceived Orlen and Bliska. PKN is the largest Central European company. It doesn’t reach the dimensions of the large oil concerns from the west, but maybe that is more of an advantage. From my own experience I can confirm that these new Central European companies like PKN, and also Hungary’s MOL or Austria’s OMV, are far more dynamic and flexible in making decisions.
Source: Deníky

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