Reducing Fuel Distribution Costs
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WITHOUT relief in taxation, there can be little hope of any substantial reduction in the price of liquid fuel. To the fleet operator, however, a fall of even id. a gallon is important. The oil companies are well aware of this situation and are doing their best to keep down production and distribution costs.
The huge refineries that have been built in the United Kingdom have revolutionized internal distribution and have presented the oil companies with new problems. Distribution has been concentrated at fewer points than in. the past, and careful planning has been necessary to secure maximum efficiency and economy.
The tendency is now towards larger units of transport, which, when fully applied, should reduce the cost of distribution. The tank vessel of 26,000 deadweight tons has vindicated its sponsors' claims of superior economy and even larger ships are to be built.
In distribution by road, the trend is also towards larger transport units. The small four-wheeled vehicle is going out of use in the more established markets and is being replaced by the articulated outfit of 2,000-2,400-gallon capacity.
It is understood that the Home Office has accepted the principle of an increase from 3,600 gallons to 4,000 gallons in the maximum load capacity of road tankers for petroleum spirit, although the Statutory Instrument authorizing the change has not yet been issued. At least one oil company already has some 4,000-gallon tankers, although they have not yet been used as such.
To legalize the operation of 4,000-gallon vehicles is, however, only half the battle. Before such tankers can be widely employed to yield the maximum economy in distribution, many retail suppliers and fleet users will have to be persuaded to increase their storage capacity. This is a delicate matter. The average small garage proprietor would probably not be able to incur heavy expense in altering his plant and the oil company would have to pay for the new installation. Now far this policy would be justified is a question of economics.
An extension of the use of articulated vehicles is also reducing distribution costs. A tractive unit. can work with a number of semi-trailers reserved for individual products, such as fuel oils and bitumen. Flexibility of operation is thereby promoted, the amount of capital locked up in expensive specialized motive units is reduced and smaller demands are made on space in repair shops.
Developments in handling methods are also helping to speed up delivery. The " open-flow " system of loading and the metering of fuel during discharge enable a few minutes to be saved. The economy in time per vehicle is admittedly small, but, with a large fleet, it becomes appreciable.
Even the most stringent economy in distribution could not, however, reduce retail prices by more than a fraction of a penny a gallon, and only big bulk purchasers might benefit by them. Without support from the Government by way of a reduction in taxation, the oil companies' efforts to keep down prices can bring little practical comfort to the vehicle user.