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The price is hiked

24th October 2013
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Page 28, 24th October 2013 — The price is hiked
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Which of the following most accurately describes the problem?

AdBlue is here to stay, but prices can vary dramatically depending on where you buy it and where you are in Europe. So how can you minimise this cost for your fleet? By Toby Clark

THE BASIC INGREDIENT of AdBlue is urea, which is a globally traded commodity (see sidebar) — and it's pretty cheap. So why are we paying anything from 26p to well over £1 for a litre of the stuff? One of CM's contacts was recently shocked to see that AdBlue was being sold for £1.14 a litre at the Chieveley motorway service area (MSA) — however, this has since dropped to 84ppl

Moto is Britain's biggest MSA operator. Of its 48 motorway sites 29 sell AdBlue through pumps and all of them sell it pre-packed in the forecourt shop. A spokesman said that, with a typical MSA costing £25 million to build, the price structure was fair: "AdBlue retails at 84.9ppl from the pumps or can be bought

pre-packed at £12.99 for 10 litres. Far too expensive

"These prices reflect factors such as the investment required to acquire and maintain expensive locations and operational requirements, such as compulsory round-the-clock opening." A bulker driver at Clacket Lane Services, a Roadchef site, told us: "I would never buy from a place like this — it's far too expensive. We buy in bulk so we

don't have to do that." He has a point: the BP fuel station at Clacket Lane sells AdBlue in 10-litre containers priced at £11.59 including VAT that's 116ppl (or almost 97pp1 exc-VAT) for a substance that is two-thirds water.

Even specialist suppliers, such as Commercial Fuel Solutions, charge hefty prices for AdBlue in small containers: 40 10-litre containers cost £340 exc-VAT from their AdBlueOnline website, or 102ppl including VAT. For once, internet giant Amazon is not one of the cheapest outlets: as we went to press, its price for a 10-litre container of AdBlue was £17.28 including VAT. Or, curiously,

£14.54 for used AdBlue! George White, of George White European, runs a fleet of ownerdriver trucks, much of its work being for the expat community in France and Spain. For him, UK prices are too high "We buy in France — it's a lot cheaper," he says. White himself manages to avoid buying AdBlue by running a Euro-3

Actros. Mark Taylor, another owner-driver operating on the Continent, tends to fill up "every week-and-a-half or two weeks". Again, he buys in France rather than the UK. Dramatic price variations

Fuel card network AS24 has 515 points selling AdBlue around Europe, and prices vary dramatically from country to country: in one week recently, the price in Belgium was 33ppl, in Austria 35ppl and in the UK 75ppl. And in France it's 26ppl for the same stuff — about the same as the UK bulk price.

A bulk buy of AdBlue is usually delivered as a 1,000-litre intermediate bulk container, costing about £260 exc-VAT (plus a £120 deposit on the container) or 26pp1. Larger deliveries to a bunded tank can work out marginally cheaper, but it is advisable to shop around: some suppliers are quoting 28pp1. In short, your drivers should not be buying AdBlue on the road. With a typical tank range of several thousand kilometres, a fleet needs to have systems in place so that drivers can fill up on AdBlue from a bulk container — whether at their own yard or elsewhere. • Dispensing your own AdBlue

Having decided that you are not going to pay roadside prices for AdBlue, how should you buy and dispense it? Many operators will find it easiest to dispense directly from a 210-litre drum or a 1,000-litre intermediate bulk container (IBC). The simplest option is a manual drum pump, costing about £40, while a 240V electric pump for an IBC costs from £300 or so. Air-operated pumps are

also available. AdBlue is not a particularly hazardous product but, because it is denser than water, any tank should be properly bunded. An

IBC bund pallet costs about £500, although it is often cheaper as part of a package deal with a pump and a first IBC.

One option is a self-contained tank with a pump built in; for example, the Cemo DT Mobile Easy 200, a portable 200-litre plastic tank incorporating a 12V pump with hose and nozzle, costs about £1,000 exc-VAT from TankDepot. Suppliers, such as Alltank or 30 Trading, sell a fully-bunded

1,300-litre tank for about £1,800 exc-VAT. "These prices reflect factors such as the investment required to acquire and maintain expensive locations and operational requirements" AdBlue for 1 Oppl? Wholesale urea prices and AdBlue

Urea — chemical formula CO(NH2) — is a commodity traded around the world, and about 90% of global demand for it is as a nitrogen-rich fertiliser. Urea is seen as an indicator of conditions in the farming industry, and the price is scrutinised closely. The commodity price of urea has been volatile in recent years, rising from just £40/ tonne in 1999 to £408/tonne in 2008. Since then prices have fluctuated but generally

fallen, dropping to £195/tonne in August. Urea is made from ammonia and carbon dioxide, typically produced at the same time from petrochemical. China is currently building coal-based urea plants, for example. But a Florida firm has just patented a process for making urea from biomass — waste from rice, corn, sugarcane and so on. The process also produces heat which can be used to generate electricity. So, in the

long term, the price of urea might fall.

What if you could make your own AdBlue? A 1,000-litre intermediate bulk container of AdBlue contains about 354kg of urea. Farmers now buy bags of granulated urea for about £290/tonne, so that amount would cost £103 — or 10.3ppl. Even allowing for VAT and buying demineralised water, that's a good price. We're not recommending that you roll your own, though...

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