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Case Study: Petroleum Jobber

Large petroleum distribution company headquartered in the state of Pennsylvania and operating in four states. Customer buys fuel for its bulk plants and retail sites, and sells significant amounts of fuel to oilfield services companies, commercial customers and wholesale customers.

Challenge

Customer faced numerous supply shortages and price volatility which made it difficult to obtain product in their core markets. The uncertainty of supply source led to higher operating expenses and increased product pricing.

Solution

Guttman Energy proposed a Platts-based pricing program for a portion of the customer’s business. The goal was to have various supply options each day that would allow the customer to choose the best option for a given day based on market conditions. Additionally this gave the customer surety of supply at a set terminal.

Benefits

Customer was so pleased with the program and how it worked that they doubled the volume for an additional year. This solution has given the customer peace of mind knowing that they have assured supply at a fair market value. They also have the ability to pull their Platts deal on a day when the market is up, allowing them to capture a lower value. Additional benefits include improved efficiency and reduced delivery expenses.

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