NATIONAL POST NEWSPAPER STORYOur client Jack Lee, Founder and Chairman of 4Refuel discussed Fuel Management Strategies and how there is Huge growth in store for fuel management firms.
With oil prices increasing and big oil companies exiting the fuel distribution business, 4Refuel Canada LP of Langley, B.C., has grown into Canada’s largest fuel management enterprise.
“The gasoline market is actually decreasing because of new technology,” says Jack Lee, founder and chairman of 4ReFuel in Langley, B.C. “Demand for diesel, on the other hand, which drives industry, is increasing.”
Founder and chairman Jack Lee said big fuel users like trains, ships, trucks, cranes or bulldozers are outsourcing fuel management to get the most out of fuel, typically their second highest cost after labour, and ensure there are processes in place to track their fuel use.
The closely held company, partly owned by Mr. Lee and other private interests, including Toronto-based investor TorQuest Partners, has 260 employees, is growing at a rate of 25% a year and plans a big expansion in Canada, in sectors like Canada’s oil sands, as well as in the United States. Its customers include Canada’s railways, municipalities, product distributors and shippers.
4Refuel hired a new president and CEO, John Gleason, in January, to lead the company’s growth strategy. Mr. Lee spoke to the Financial Post’s Claudia Cattaneo about trends in the business.
Q Do high petroleum prices make what you do more valuable?
A Yes, because your diminishing asset is more costly, so it’s more important that you manage that diminishing asset. We work with national and international companies to manage their fuel. We procure it and buy it at cheaper price, then take that fuel and deliver it to their equipment wherever it is, so operators don’t have to refuel equipment, and equipment can be more productive.
Businesses typically send their trucks and equipment off-site to get fuel. But by bringing fuel to equipment, we save them 30 to 40 minutes per unit, per day.
Q Why is there so much opportunity for growth in your business?
A Oil companies in Canada are in the process of divesting their distribution assets. That process in the United States stated 15 to 20 years ago and is now complete.
Oil companies want to stick to exploration and refining and keep their service stations where they display their brand. So somebody has to fulfill that distribution role. When they divest, it’s very fragmented. There are lots of mom and pop operations. Our strategy is to consolidate so we get better buying and savings for our customers, and also the assurance of delivery and delivery safety.
Q With the economy recovering, is fuel consumption also growing?
A The gasoline market is actually decreasing because of new technology, like the introduction of hybrids and electric cars. Demand for diesel, on the other hand, which drives industry, is increasing as the world comes out of recession. Q Is biodiesel catching on? A Biodiesel was made popular by the green movement, but more so by high crude prices, because they made regular diesel more expensive than biomass. When oil prices weakened, people backed way. Generally, companies will use biodiesel if it’s not more expensive. When it costs more, green is not as important. The big users of biodiesel among our customers right now are municipalities.
Q Has the carbon tax been effective in British Columbia in reducing fuel consumption?
A No. People in B.C. just ignore it. It’s just another tax, like the HST. With business customers, it just increases costs. In Vancouver, if there is any reduction in consumption, it’s because the city is driving out cars by putting in bike lanes.
NEWSPAPER STORY Our client, Bill Bishop, Vice President Of Marketing And Communications of 4Refuel was interviewed for a story about why gas prices are so high.
November 17, 2010 By Bryan Borzykowski Gas prices are on the rise again as this Esso station at Bayview Ave and Broadway St. shows.
Gas prices are making a lot of people angry in Ontario, and for good reason — your pump payments have climbed about 5 per cent in the last three weeks, from $104.5 to $1.10.
Here’s what’s at work.
Closed Shell refinery
In September, Shell closed a Montreal refinery and converted it to a fuel depot. This refinery supplied eastern Canada with 10 per cent of its gas needs according to Dan McTeague, a Liberal MP for Pickering. McTeague says this has had a major impact on prices in Toronto, Montreal and Quebec City.
McTeague says Shell was producing 130,000 barrels a day at the refinery, but now is buying fuel from other suppliers to fill the gap.
The closure hasn’t received a lot attention, but it’s a big reason why prices have climbed. “It’s significant,” says McTeague, “we’ve all allowed too many mergers and now there are too few players to feed the demand.”
HST add on
While the HST has nothing to do with gas prices rising and falling, the extra 8 per cent tax is a major reason why our wallets are feeling a little lighter at the pump. Before July 1 Ontarians were paying 5 per cent GST on gasoline. Now it is 13 per cent.
“The tax may not have caused a jump in prices, but it is a reason why it’s gone up over the past year,” says Earl Sweet, senior economist and BMO Capital Markets.
McTeague agrees. “If prices are at $1.10 a litre, that means we’re paying 8.8 cents more than we were in the pre-HST days.
Crude oil price increase
Sweet says a rise in oil also puts pressure on prices. The cost of a barrel of crude has been climbing steadily since July — from about $70 per barrel to a recent high of $88. It’s at about $82 today.
McTeague argues that oil has less to do with the gas price than people think. He says a rising Canadian dollar offsets rising crude prices, dampening the financial implications to the fuel companies and, therefore the consumer.
However, that doesn’t mean gas companies aren’t trying to pass along the cosrts. McTeague suggests that oil companies are padding their margins. “They’re demanding a lot more for gas than they need to turn crude into gasoline,” he says.
According to the website Tomorrowsgaspricetoday.com, Torontonians are paying 6.9 cents more than they should because of a lack of competition and fewer refineries.
“There are fewer and fewer companies to take advantage of the price and pass on savings to the consumer,” says McTeague.
Outside factors and demand
More generally, gas prices can fluctuate without any good reason at all. “There’s never really any rational,” says Bill Bishop, vice-president of communications for B.C.-based 4Refuel, a company that gasses up trucks and other vehicles for transport companies. “Prices seem to move around almost arbitrarily.”
Everything from the general economic outlook to oil spills and hurricanes could have an affect on prices during different parts of the year too.
Right now though, Bishop has seen demand increase across the country — his company is fueling up more vehicles than they did last year — and that’s another reason why costs have gone up.
“We’re seeing a modest recovery in consumption,” he says. “And more consumption means more demand.”
Add all these factors together and it’s likely gas prices won’t come down any time soon. “If you continue to have an incremental increase in demand for fuel and a tight supply of gas,” says McTeague, “permanent high prices will be here for a very long time.”
Our client, Jack Lee, CEO of 4Refuel Canada discussed how the company helped his clients reduce their Greenhouse Gas emissions (GHG) by by 100 million kilograms!!
Eco-friendly milestone marked
By Bethany Meckelburg, Langley Advance October 15, 2010
Jack Lee started 4Refuel in 1995, and has become Canada’s largest provider of onsite biodiesel.
Green can be easy.
And no one knows it better than 4Refuel, an onsite refueling and fuel management company.
This year, the company celebrated a reduction of millions of kilograms of greenhouse gases.
“We just wanted to help our clients reduce their fuel costs,” said Jack Lee, president of 4Refuel, “but we’ve ended up helping them reduce their GHG [greenhouse gas] emissions by 100 million kilograms, too.”
A press release from earlier this year stated that according to the Government of Canada Department of Transport, 2.7 kilograms in greenhouse gases are released into the atmosphere for every litre of diesel fuel burned.
“If I don’t deliver fuel to your vehicles overnight, your vehicles are burning fuel during the work day to go get it,” Lee said.
“We have a number of customers that think ‘green’ is very important,” he continued. “Local municipalities are very keen.”
And 4Refuel wants to make it easy for them to manage their fuel and see how they are making a positive difference. This led them to create the Fuel Management Online (FMO) program which allows businesses to monitor the amount of GHG emissions they’ve saved.
“FMO gives our clients the information they need to react to any situation where fuel is being wasted, so they can step in and pull the operating unit in for service. Without that operating and emissions data, the problem will go unnoticed, fuel is wasted for weeks, even months and the costs to the environment grow day to day,” Lee said.
He started the company in 1995, and modeled it after a business concept he had heard about while living in Australia.
“Australia and Canada are very similar so I thought it would work well,” Lee explained.
Now the company can be found from coast to coast in almost every major city where they manage more than 3,000 litres of fuel yearly. 4Refuel is hoping to expand throughout the United States in the next five years as well.
It is currently Canada’s largest provider of onsite biodiesel and the world’s only provider of online fuel reporting and mobile fuel logistics.
For more information about 4Refuel, visit www.4refuel.com.
Radio Interview Our client, Bill Bishop, Vice President of Marketing and Communications of 4Refuel Canada discussed how the company helped his clients reduce their Greenhouse Gas emissions (GHG) by by 100 million kilograms!!
Radio Interview Our client, Bill Bishop, Vice President of Marketing and Communications of 4Refuel Canada discussed how the company helped his clients reduce their Greenhouse Gas emissions (GHG) by by 100 million kilograms!!
Radio Interview: Our client, Bill Bishop, Vice President of Marketing and Communications of 4Refuel Canada discussed how the company helped his clients reduce their Greenhouse Gas emissions (GHG) by by 100 million kilograms!!
Our client, Bill Bishop, Vice President of Marketing and Communications of 4Refuel Canada discussed how the company helped his clients reduce their Greenhouse Gas emissions (GHG) by by 100 million kilograms, JUST PRIOR TO EARTH DAY!!
