Банкеръ Weekly



New Year - cheaper petrol! This is undoubtedly a nice wish for the usual Bulgarian driver. But will it come true in 2005?Despite the rising oil prices on international commodity markets in 2004, consumption in our country increased by 4%, data of the LUKoil Bulgaria refinery show. According to the same analyses, the domestic market of engine fuels (petrol, diesel oils, and propane butane) has exceeded 1.4 million tons. Logically, petrol prices have been influenced by oil prices, the US dollar exchange rate, and the margin of fuel distributors in Bulgaria. The appreciation of petroleum throughout the year, however, was compensated by the week US dollar. Therefore, petrol retail prices did not increase very much. Fuel distributors' margin was also a depressing factor. Its downward trend from the last two years persisted, mostly due to the stepping on the market of new players with serious positions (such as Eco Elda and Opet, for instance). Currently, there are almost 3,000 petrol and gas stations in Bulgaria. Petrol's network is the biggest - with 375 filling stations, followed by LUKoil - with 120 stations, Shell and OMV - with 82 and 69 stations respectively. Some of the biggest new chains are: Ecopetroleum - with 23 stations, Eco Elda - with 15, and Opet - with seven stations. All other filling stations (almost 2,300) are owned by smaller companies. The distribution of market shares is somewhat different. Aggregate sales in 2004 of the four biggest companies are almost equal to those of all the rest. Petroil is the leader with a 17.55% market share, followed LUKoil - 12.49%, Shell - 10.47%, and OMV - 8.6 per cent. The most demanded fuels in 2004 were diesel oil and the A-95 petrol brand. In 2003 they accounted for 34.8% and 31.7% respectively of all sales of LUKoil Bulgaria in the country. In 2004 the share of diesel oil rose to 35.8%, and that of А-95 dropped below 30.6 per cent. The highest growth was registered by sales of propane butane which is not surprising due to its lower price. From 17.2% a year ago it reached 22.3% of marketed oil products. A considerable drop was reported in the consumption of the other popular petrol brand - A-92, which accounted for just 9.5% of all sales. Obviously, more and more drivers prefer to use the cheaper propane butane or the higher quality petrol brands.The future development of petrol stations in Bulgaria will depend also on the improvement of accompanying activities and services, such as shops and restaurants. Currently, they account for just 13%-14% of the proceeds of big petrol chains in this country, while in Western Europe the ratio between proceeds from sale of fuels and from accompanying services is 50 to 50. The other accents will be on the ways of effecting payments (through credit and debit cards), and loyalty schemes that encourage clients to use the services of a certain chain.

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