Gull New Zealand plans expansion into Wellington region

Thursday, 4 October 2018

Gull general manager Dave Bodger is looking at expansion into Wellington in the next 12 to 18 months. (File photo)

Cut-price fuel retailer Gull wants to set up shop in the capital within a year, triggering a potential game-changer for capital motorists.

While motorists in Levin and Masterton to the north have benefited from the so-called 'Gull Effect' for some time, Wellingtonians have been forced to swallow eye-watering fuel prices because of the discount chain's absence.

Motorists in and around the capital now pay around $2.40-$2.45 per litre of 91 octane petrol.

Gull revealed it was 'close to agreements to lease or purchase on several pieces of land in greater Wellington,' but general manager Dave Bodger wouldn't pinpoint exact locations of the self-service stations.

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Petrol retailer Gull is signalling its on the cusp of breaking into the Wellington market in the 'next 12 to 18 months.'

'I'm feeling relatively confident we'll get something over the next 12 to 18 months … optimistically, I hope we have a site operating in Wellington inside the next 12 months.'

Distance and high real estate costs had previously prevented Gull from breaking into the Wellington market, Bodger said.

'It's a long way away from our terminal in Mt Maunganui, so that makes it more expensive for us to get the fuel south.

'Our real estate costs in Levin and Masterton … are significantly lower than [what] the average landlord would expect to receive in the Greater Wellington area.

'That has been the difficult nut to crack until recently,' he added.

Energy Minister Megan Woods, who claimed the petrol market was 'broken' in May, has welcomed Gull's proposed move to the capital. (File photo)

AA Petrolwatch spokesman Mark Stockdale said Gull's presence would provide greater competition and better fuel price offerings for motorists.

However, he warned the Gull Effect would be restricted to the suburbs where the new stations were operating - simply put, its presence would not lead to across-the-board price drops across the entire Wellington region.

'They will set a lower market price and the other brands in that neighbourhood will be forced to match the prices in that suburb. Motorists will only travel so far to get a lower price of fuel,' Stockdale said.

Gull's decision to dip its toes in the Wellington market was timely, with economist Shamubeel Eaqub's prediction this week that pump prices could rise by as much as 15 per cent by early next year.

However, Eaqub said Gull's presence in the capital would 'add competition and bring prices down' in the locations they were based in.

Z Energy says it has deliberately positioned itself as a full service fuel retailer 'because that's what our customers told us they wanted,' according to a company spokesman. (File photo)

Energy and Resources Minister Megan Woods, who publicly questioned the pricing tactics used by the main fuel market players operating in Wellington and the South Island in May, has welcomed Gull's move.

She referred to a recent Ministry of Business, Innovation and Employment (MBIE) report which uncovered evidence suggesting motorists in those areas appeared to be 'paying over the odds for fuel.'

'Not all fuel companies co-operated with that study and some refused to hand over data. The Government is progressing a Bill through the house to empower the Commerce Commission to conduct market studies and to compel the release of the evidence.

BP has no plans to add to its sole unmanned station in Porirua. (File photo)

'It's important that New Zealanders know they are getting a fair deal when they fill up,' a Woods' spokesman said.

BIG FUEL RETAILERS SHUN UNMANNED STATIONS

While Gull embraced unmanned stations - operating 37 nationwide - there seemed to be little appetite from the big players to follow suit.

Sheena Thomas, spokeswoman for Z Energy, the country's largest fuel company and owner of the Caltex brand said the company has 'deliberately positioned' itself as a full service station chain.

'Unmanned stations are cheaper to run. Not only because of attendant wages, but also because they usually require less real estate and would not need to invest in things like staff training and robbery prevention measures.

'Ultimately, we believe it's all about choice. Some customers only want the cheapest prices and are happy to get this at unmanned stations. Others want service … all while still getting a price that is competitive,' Thomas said.

BP's Porirua site is the only unmanned site it operates nationwide, but has no plans to develop any more 'in the forseeable future.'

'Our focus is on continued investment in quality fuels, food and service options,' explained BP spokeswoman Leigh Taylor.