The owner of Z and Caltex is prioritising a clear differential between the brands
New Zealand's largest fuel supplier is splitting its service station brands into a premium and more budget offering.
Z Energy is licensed to operated the Caltex brand stations in New Zealand, and has already quietly made seven of them into unstaffed fuel stops while enhancing Z's offering – and now it's speeding up the process.
It's already shut down and boarded up or bulldozed the Caltex convenience stores at sites like Epsom and Newton, in Auckland.
Australian fuel giant Ampol, which owns Z Energy, told investors and analysts at the Jefferies Asia Forum last month that creating a differentiation between its brands was a key priority for its New Zealand operations.
This means converting the company's Z Energy sites into more premium offerings, while Caltex service stations, mostly franchised, would stay the same or become unstaffed locations. Z spokesperson Kiri Shannon said if any roles were impacted, the company would explore other redeployment opportunities within its network.
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Z was purchased by Ampol in 2022, with a Commerce Commission requirement that Z divest its Gull brand, which made up the budget unmanned and no-frills petrol stations in its portfolio.
Shannon said change was to meet customer demand through offering different formats, with Z investing more in its convenience, food and drink offerings, as well as a refreshed look.
Shannon said the ongoing changes in its stations reflect what was important for many customers.
“The strength of having the two brands in market means we can serve a greater portion of New Zealanders, with a larger network and different offers that attract different customer segments.”
Regular 91 petrol retail/importer margins
It currently has seven unmanned Caltex sites across New Zealand, with three in Auckland, two in the Wellington region, and two in South Canterbury, presumably cutting overheads, which could flow through to a cheaper tank of petrol for the budget-minded customer.
Newsroom spoke to Mt Eden resident Samuel Levene as he was filling up at Caltex’s unstaffed Epsom location.
Levene had been using the station since before it was converted its convenience store was shut down and service station assistants removed. He couldn’t say whether the price had changed much, but said that Caltex and the competing Mobil across the street were often the cheapest fuel around the area.
“I guess I'm a bit of a sucker but I quite like that it's unmanned. I don't need to interact with anyone I can just come and get my fuel and carry on.”
He said he didn't miss the lack of coffee, “Personally, I don't think that the coffee from the petrol station is ever that flash. I'd prefer to go to a local café rather than getting everything from a petrol station.”
Prices
Caltex’s seven unmanned service stations seemed to be about 4c a litre (of 91) cheaper than the surrounding average price and 7c a litre than the closet Z station (at the time of writing).
While this is cheaper, hovering between $2.8 and $3 still isn’t cheap, and petrol importers have recently been criticised for what looks like a failure to pass on savings.
As Newsroom reported last week, MBIE weekly monitoring data showed the margin retained on a litre of regular 91 petrol by Z Energy, BP and Mobil had soared from 33c to 52.4c a litre, within three weeks.
Margins on diesel rose 32.7c to 47.7c over the same period.
Big companies hedge by buying their fuel from overseas when prices are low and exchange rates are favourable, so the price paid by motorists doesn't necessarily reflect that day's crude oil price on international markets.
Despite this, competitive pressure between the big three companies should force retail prices to follow the prices of imported refined fuel down, which hasn’t been happening.
National has promised to act on fuel prices in its first 100 days, by abolishing the Auckland Regional Fuel Fax and cancelling a scheduled increase to fuel excise.
