National Buying Group (NBG) has signed “trailblazing deals” with BP and UK Fuels, designed to provide highly competitive pump prices for its Partners.
In what is described as an industry first, the two deals will track the Platts Wholesale rate with Suppliers receiving an agreed margin over the weekly wholesale price. The deals will give NBG’s network of independent merchant Partners access to the full BP network of more than 1,200 forecourts and, in locations where there is no BP site, fuel will be available through the UK Fuels network of over 7,200 sites.
The deals were negotiated by Joe Beale, Group Purchasing Director at Frank Key, a long-time NBG Partner, with the support of the NBG central team. He commented: “Fuel cards have been tried before by buying groups, but we believe this is the first time such deals have been pinned to the Platts Wholesale rate, which will be published weekly on the NBG Hub.
“Some of our Partners are making a saving of 10-20p per litre at the pump which equates to a considerable annual saving. In many cases, this beats the savings of bulk tanker fuel prices.”
“This ensures that our Partners have full transparency over the price they are paying at the pump and have the guarantee of an agreed margin from the outset. As the market rises or falls, the margin remains the same.”
Remittance for the deals will be provided by NMBS with a 30-day credit facility for Partners compared to the common industry period of 14 days.
Joe says that although the deals are in their infancy, NBG Partners are eager to sign up and are already making good savings at the pump. He continued: “Some of our Partners are making a saving of 10-20p per litre at the pump which equates to a considerable annual saving. In many cases, this beats the savings of bulk tanker fuel prices.”
Fuel security was also a consideration during the negotiations, as Joe adds: “Partners want to reduce the amount of fuel stored on site due to the potential safety and theft risk. These deals will help Partners reduce the amount of fuel stored on site by offering very competitive pricing from their local forecourt.
“Of course, Partners will need access to bulk fuel on site in order to run equipment such as forklift trucks and we are currently tendering for a bulk deal that will hopefully mirror the Platts-based deal we now have in place.”
Mark Hughes, recently-appointed Managing Director of NBG, says the deal demonstrates NBG democracy in action. He said: “This deal is a good example of a Partner-led negotiation, true to our ethos of being a democratic organisation, run by the Partners for the Partners.”
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