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Fiji’s “No Service” Stations [The Fiji Times, 16 April 2011]

28/03/2012

In most civilized countries, “service” stations genuinely try to provide you with “motor vehicle services”:  petrol, diesel, engine oil, oil for the brake and clutch systems, and premix for outboard engines.

You could also get regular servicing, greasing, tuning and check-up facilities for the vehicles.

Recently, service stations have also diversified into all kinds of basic food and drink items, often needed by people on long driving runs.

And once upon a time in Fiji, you could also get your car tires filled up with air at the right pressure. Or get your vehicles serviced.

But now the service stations thrive on making your life as difficult as they can, while taking your money.

Where is the air?

Today, especially in urban Fiji, many service stations do not have the equipment to allow you to fill up tires with air.

If they have the air compressors, they don’t have the hoses or the attachments.

The attendants claim that these attachments and hoses have been stolen.

Why cannot they keep these under lock and key for bona fide motorists?  No answer.

When your tire is getting flat, you need to drive all over Suva to find a service station that has an operational air pump and the attachments.

If your tire is too flat, you replace it with the spare, only to find out that is flat as well because you have not been able to refill it regularly.

Often the cost of the extra petrol you use is more than the value of the air you put in.

And where is the stuff for brush cutters or boat engines or electricity generators?

Another shrug of the shoulders.

Where is the brush and soapy water for your windscreen.  Another shrug.  The boss does not want to buy one.

Where is the servicing?

Today, many service stations have also removed their vehicle servicing facilities.

They have given over the spaces to sales outlets for tires, car products and supermarket goods like milk, bread and ice cream.

So where can we get our cars serviced or engines tuned or greased?

The attendants shrug.  They could not care less.

Go to the other end of town, they suggest, making you mad as hell.

But you know that these problem are not of their making.

The problems are jointly created by the multinational petroleum company in the first instance, and the local retailer in the second.

Where do the high profits go?

In recent years, oil product prices have gone through the roof with total imports rising to more than 1 billion dollars.

Many households spend thousands of dollars on their annual fuel bills.

I suspect that the multinationals who supply the products have been making a killing, despite the alleged price controls by PIB and recently Commerce Commission.

How much are they making?  Tens of millions?  Possibly a hundred million?

The PIB or the Commerce Commission may be given numbers of all kinds. I doubt if even FIRCA knows the true facts.

For multinational petroleum companies are remarkably adept at transfer pricing profits out of Fiji.

Multinational risk aversion

Multinational companies are also cunning in transferring all the supply head-aches to the local companies by selling them the retailing franchises.

No more head-aches of employees at the retail level.

No more head-aches of periodic robberies.

No more head-aches of providing services like air for the tires, or regular servicing of cars.

Like many other multinationals in other industries such as sugar (in the colonial days) or chicken (today), they have transferred most of the risks to local owners by selling them the petroleum stations.

These local retailers may make some profits of course, but they are also now squeezed by the multinationals supply price on one side, and the PIB/Commerce Commission price controls on the other.

In recent years, the retailers have been squeezed so much that they have had to cut back on staff.  “Self-service” by the buyers now saves many retailers the old wage costs.

They have also removed all the air services for the tires, or the wider servicing facilities for the cars.  More savings.

And selling super-market items like milk and sweets do add to their profits.

But the totally decrepit state of most of Fiji’s service stations, and the closing down of a few, suggests that the retailers are not making much profits.

The multinationals are firmly in charge, sitting comfortably in their head offices, watching their profits roll in.

Disgraceful withdrawal of services

What you have now is a wholesaling and retailing petroleum products industry that is holding at ransom, the vehicle owners of Fiji.

They are effectively telling all of us: we will sell you the products that are profitable and convenient for us.  Tough luck about the other services.

We can run around and find elsewhere, at our own cost, the services that are essential to keep our cars running.

Heh heh heh.  In fact, the petroleum companies love it if motorists run around and use up even more fuel, which simply adds to their profits.

How utterly disgraceful.

How dare these wholesalers and retailers collaborate in a system that punishes the motorists, while pouring tens of millions of profits into the pockets of these multinationals for virtually no risk whatsoever.

 

A Commerce Commission solution?

 

Normally, Commerce Commissions should stay out of competitive market situations.

 

But the PIB/Commerce Commission can act in this case, given that the multinationals have been blatantly and viciously exercising “substantial market power” at the cost of consumers.

 

The PIB/Commerce Commission must demand the provision of “minimum services” as an essential part of their licensing and price control mechanisms.

 

The Commerce Commission could place a special prohibitive monthly surcharge on any service station that does not provide the essential and working tire air services, with the appropriate pressure gauges.

 

The Commerce Commission could place another prohibitive surcharge on service stations that do not provide the full range of products.

 

They should also place another and large monthly surcharge on any service station that does not provide full servicing facilities, with qualified mechanics.

 

These fines should be charged jointly to the multinational company supplying that service station (three quarters) and the local retailer (one quarter).

 

If any multi-national petroleum supplying company refuses to abide by these requirements, double the fine.

 

Should they persist in not providing the minimum services, remove their license to import.

 

For too long Fiji’s motorists have been tolerant of gross withdrawal of services by these avaricious multinationals and their junior retailing partners, who have been ripping off the consumers at will.

 

It is time that consumers fought back, by requesting the Commerce Commission to act urgently.

 

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