Poor government communication caused bad feeling at pumps: Maxol CEO Brian Donaldson

Maxol Group CEO Brian Donaldson has described the unprecedented challenges faced by forecourt retailers at a time when wholesale fuel prices were rising in double digits.

In an exclusive interview with IFCR, he also warned that poor messaging by the Government around the fuel excise duty cut created confusion at the pumps and bad feeling towards forecourt staff.

Mr Donaldson says Maxol has been very fortunate in that its key suppliers were able to maintain fuel supplies in the wake of the invasion of Ukraine by Russia.

“We had to make sure that we kept in daily contact with what was happening on the forecourt, to ensure our forward estimates were matching demand. We worked very closely with our key suppliers south and north, which was crucial,” he says.

“One of the biggest challenges was trying to keep track of the volatility and the rapid upward move in wholesale prices and reflecting both upward and downward changes in the market fairly and quickly.

“On certain days there were double digit increases in the cost of product, so depending on when our retailers were receiving deliveries, that impacted very much on what their retail price could be.

Unprecedented times

“It was certainly very challenging because I don’t think we had ever seen that kind of rapid increase in daily wholesale prices. Thankfully, we didn’t have any stock issues. At times it could have become quite tight but none of our service stations ever had to restrict sales to customers.

“One of the interesting things that we saw during this period was a change in customer buying behaviours. Clearly the media was very much on top of what was happening, and people were trying to buy before prices moved up, and equally before the duty cuts were announced, so you would have seen a very low demand for fuel on the day when those duty cuts were due to apply, south and north.”

Confusion at the pumps

He says poor communication by the Irish government allowed the public to believe that prices would drop at midnight after the duty cut.

“That created confusion, and it also created some bad feeling with customers, retailers and frontline staff, which was unnecessary and indeed I think it was recognised by the government that they should have handled things better,” Mr Donaldson said.

“We didn’t have the same situation in Northern Ireland and the UK because I think the communication that was coming from government was clearer that prices wouldn’t drop immediately because retailers were going to have to sell out the higher paid stock.

“It really was all hands-on deck and it was a case of trying to manage the situation and navigate the various challenges that appeared each day – but we did it and we think we’ve got through the worst of it. Thankfully in recent weeks, energy prices on oil have been coming back and prices are certainly coming down on petrol and diesel.”

To read the full feature, watch out for the new issue of IFCR.