Whole-of-Government Contract for
Fuel
May 2002
Table of Contents
Table of Contents Marketing Brochure 1 1
Introduction /Background Suppliers 1 1
Major/Key Benefits
Do I have to use this contract? 2 How do I use the contract? Pricing 2 For further information contact: 3 Accessing The Panel 3 2
Fuel
Marketing Brochure
Introduction /Background
Reference No: Date Established: Expiry Date: Extension Options: F2001/01234 1 November 2001 30 June 2003 three 1-year options to extend
The Department of Treasury and Finance (DTF) has established a panel of contractors to: supply bulk and fuel card purchases of petrol (leaded, unleaded and premium unleaded) and diesel, LPG, heating oil, kerosene, lubricants and greases to all government departments and agencies, at various locations throughout the State of Victoria and in other States and Territories (for interstate travellers).
Suppliers
The primary contract for the provision of fuel has been awarded to Shell Company of Australia. Caltex has been selected as the second preferred supplier to provide access to retail outlets only in the areas where Shell has no retail presence. The decision to have a second preferred supplier was made because participants in of the Victorian Government fuel contract require an extensive retail distribution fuel outlet and certain regional areas are not served by Shell. It is important to note that only one fuel card will be issued to a vehicle unless in exceptional circumstances or a dedicated LPG vehicle. Although drivers of dedicated LPG vehicles will have access to both cards, it is important to note that a significant discount has been negotiated for the Shell card.
Major/Key Benefits
Using this panel has many benefits for departments and other public sector agencies, some of which are: accessing pump-based discounts by a "transparent" escalator-based pricing formula or Shell Card List Price no card fees no transaction fees an online card management system accessed via Shell's website (www.shell.com.au) and Caltex (www.caltex.com.au) 24-hour user support service, and incentive discounts on LPG to encourage the use of cleaner fuels with reduced gas emissions and air pollutants
Fuel
Do I have to use this contract?
The contract is mandatory for the nine Government departments and Victoria Police. Other public sector agencies are eligible to join the contract. Not-for-profit non-government organisations (NGOs) may use this contract if they are tax exempt.
How do I use the contract?
This contract allows users issued with a Victorian Government fuel card to purchase petrol for vehicles. Other products such as diesel, LPG, heating oil, kerosene, lubricants and greases can also be purchased. To access information on pricing please complete a Deed of Confidentiality (available from the VGPB website at http://www.vgpb.vic.gov.au/polguid/worddoc/ )and fax it to 9651 2161. Upon receipt the Contract Manager will email you the password and login to access the site.
Pricing
Shell
The Victorian Government fuel contract for Shell offers two pricing options for your organisation.
Escalator Pricing
An escalator pricing formula provides a rise and fall mechanism to determine variations to an initial agreed base contract price - usually called "P0". This price then varies, usually monthly, according to movements in both the international prices of selected refined (or crude) products and the exchange rate. The use of refined product escalation formulas relies on the price of "refined product" (usually ex-Singapore) as published by organisations such as Platts. A recent development has seen the separate escalation of the sea freight component (ie World Scale 100) in the formula and Oil companies currently are using four different indices (ie Drewry , AFRA , OT 11 and Global Platts) as a basis for this escalation. Note the selection of the Index can have a significant impact on the sea freight cost variation. This contract has incorporated a cap of 150 World Scale Points to be applied against the benchmark World Scale Points that apply when calculating pricing. The benchmark value is 295 - WSP. If the ocean freight escalator breaches the benchmark, the cap will be invoked to protect all parties. A fixed monthly escalator formula provides a more transparent (and measurable) starting point and subsequent variation, which is easy to audit and benchmark.
Shell Card List Price (SCD)
The SCD is a mechanism for setting daily fuel prices, which is calculated using the internal fuel company criteria of Shell. In some instances the SCD may bear no direct relationship to the actual pump price of the day and are usually set higher than the average pump price to which the SCD is supposed to relate. Shell and other fuel companies then offer a "rebate" from this price according to the anticipated volume of fuel purchased by the customer.
Fuel Fuel companies also set pricing zones in which these list prices operate; in the case of Mobil there is a single CLP pricing zone based on the State or Territory, while Shell applies four pricing zones (Metro North/South, Fringe and Country) within each State or Territory (ie Shell currently has 23 different pricing zones in Australia). Fuel companies usually impose a surcharge between zones of between 1.00 to 5.00 cpl (i.e. pricing of country zones can be up to 5.00 cpl higher than a metro zone). The disadvantage of CLP mechanisms is that they are ultimately controlled by internal fuel company policies and procedures, and are difficult to obtain and monitor given the ability of fuel companies to change them on a regular (sometimes daily) basis. (i) Absolute card list price rebates may remain constant, however actual pump price discounts achieved as a result of the CLP rebate can be absolutely controlled by fuel companies at any given time by raising the differential between the zone list prices and the actual pump price. (ii) Pricing mechanisms are not transparent. (iii) Pricing is difficult to audit for accuracy. (iv) Prices can change daily Please refer to the above graph demonstrating the performance of the Victorian Government fuel contract escalator formula and the Shell SCD pricing over the period from June 2000 to Nov 2001. At the end of a 12 month period, there is an option to review the pricing structure employed by your organisation. The Victorian Government fuel contract offers a fee free arrangement for purchases with a Shell card. Transaction and card fees from the previous period have been reversed and any further charges will be dealt with in a similar manner. Please ensure any queries concerning accuracy of invoicing are immediately dealt with. Additionally, the escalator pricing has been based on a 'blended' formula of 80% Gasoil and 20% Kerosene for diesel purchasers. As a consequence, audits have estimated an overcharge of 0.5 cpl. Payments will be reversed in a similar manner as above. For further account queries please contact Shell Account Enquires on 1300 650.
Caltex
The Caltex discount rate is a percentage off the daily pump price. The pump price can be accessed at www.caltex.com.au and the percentage rate is available in the Confidential Information section on the VGPB website.
Accessing The Panel
Daily Shell and Caltex prices are available from the Shell website (www.shell.com.au) and Caltex (www.caltex.com.au). Contact details are as follows: Shell Australia 1 Spring Street, (P O Box 872K) Melbourne 3001 Ph: Penny Reed - 9666 2426 Caltex Australia Limited (second preferred supplier) Newport Terminal 411 Douglas Parade Newport 3015 Ph: Malcolm Young - 0418 678 148
Fuel
All contract information is posted on the Victorian Government Purchasing Board website at www.vgpb.vic.gov.au . Contracts are also posted on the DTF website at www.dtf.vic.gov.au and panel information is available on the Victorian Government Intranet site.
For further information contact:
Further information can be obtained from the Contracts Manager, Procurement, Department of Treasury and Finance on telephone 9651 5495, or on the website at www.vgpb.vic.gov.au. There are sections on the website containing confidential information, to obtain the password please complete the Deed of Confidentiality and fax back to the Contracts Manager. Contracts Manager Procurement Department of Treasury and Finance Ph: 9651 5495 Fax: 9651 2161 Email: vgpb@dtf.vic.gov.au Online access: http://www.vgpb.vic.gov.au/contracts/public/fuel/over.htm
Fuel
MARKETING INFORMATION
SHELL AUSTRALIA Contact Details
Penny Reed Key Account Manager 1 Spring Street, Melbourne Vic 3000 Telephone Number: Fax Number: E-mail Address: 03 9666 2426 03 9666 8487 Penny.Reed@shell.com.au
Organisational Profile
Shell Australia Sources and supplies energy ranging from the discovery, production and refining of raw product to the distribution, marketing and retailing of oil, gas and petrochemicals in Australia. Shell has operated in Australia since 1901. Prior to this time, Shell operated through a number of distributors. Shell Australia is a wholly owned subsidiary of the Royal Dutch/Shell Group of Companies. Shell Australia directly employs approximately 2400 people and 18,000 indirectly through its service station and distributor network.
Range of Product and Services Shell Card
Convenience, Simplicity & Control Shell Card is a fuel card purchasing system that allows your drivers the freedom they need to get their jobs done, but gives you total control of their expenditure. In fact, Shell Card provides the convenience, simplicity and control you need to fully monitor and manage the fuel component of your business. It streamlines all the management and reporting requirements so that up to the minute expenditure detail is available to you. Keep Track Without Wasting Time With Shell Card, your Fuel Management Report will detail how much it has cost to run each of your vehicles, the distance travelled and whether your fuel consumption is rising or falling. You will know exactly what products your drivers have purchased because you can pre-program individual cards to control the variety of purchase options. Choose to manage your Shell Card with Shell Card Online, and you can access all this information 24 hours a day, 7 days a week.
Maintaining Control Every time a Shell Card is used, purchase details are collected, checked for validity and irregularities, then transmitted to Shell and reported to you. When they're making purchases, your drivers can be electronically prompted for odometer readings, vehicle
Fuel registration numbers, driver identification and order number details. Any irregularities can be caught almost immediately. Other security related features include time controls, PIN codes and immediate hot-listing of lost or stolen cards 24 hours a day. Cards can be embossed with vehicle make, body type, colour and registration number. Alternatively cards can be embossed with the driver's name and include a signature panel on the back for driver and purchase verification. Fuel Management Reports Shell Card Fuel Management Reports consolidate all the information you need to control and manage vehicle expenditure. These reports provide detailed cost performance and fuel efficiency data for all vehicles. They breakdown information by cost centre and account, order or identification details, purchase summary, as well as any irregularities. Fuel Management Reports are available online 24 hours a day, 7 days a week. Or you can choose easy-to-read paper format or downloadable files via email weekly, fortnightly or monthly. Tax Invoices Shell Card customers receive a single tax invoice at the end of each month summarising all vehicle related expenses. Transactions for each product will be shown summarised as line items and clearly totalled. Each line item shows the value with GST, without GST and the GST as a separate component. Tax Invoices are supported by the detailed information supplied on the Fuel Management Report. Shell Card Online Shell Card Online registration, access and use is free. It offers you the opportunity to do all your Shell Card management and reporting online. So there's no paperwork or filing required and you can access up-to-date data 24 hours a day, 7 days a week. View, print or download: * Transaction Listing Reports * Cost Centre Summary Reports * Fuel Management Reports * Triggered Exception Reports * Cardholder Reports * Card Listing Reports * Statement Copies * Shell Card Pricing With Shell Card Online you can also make changes to individual card controls, report lost or stolen cards and order new cards. The system is secure and easy to use. For more information, visit the Shell Card Online website on www.shell.com.au *Fees & Charges apply to this service
Account Payment The Shell Card account payment system is simple and easy. Your account arrives in the first week of each month and your account is automatically debited for the statement amount on the 21st of each month. This gives you at least 14 days to check statements and question anything you consider irregular. It means no hidden costs in cheques, postage and charges. With Shell Card Online, reports are available even sooner than paper based reports. Unique Shell Services Convenient Locations Over 1500 strategically located service stations and truck stops accept Shell Card. Many Shell outlets are open 24 hours so refuelling is trouble free. For a list of site locations, check out our Shell Locator on www.shell.com.au Gogas Shell's Gogas system is available at over 400 sites nationwide and is the economical choice for large fleets. Your Shell Cards can be pre-programmed to purchase Gogas in addition to normal fuel, or as a stand alone product.
Fuel