JobbersWorld is a Petroleum Trends International, Inc. Publication
JobbersWorld is a Petroleum Trends International, Inc. Publication

JobbersWorld is the first and only independent newsletter to focus on lubricant distributors.

JobbersWorld Reaches Out to Over 10,000 Professionals in the Lubricants Business

Click here to learn More or call 732-494-0405

Call 732-494-0405 for Information

Temporary Increases in Buy-Back Fees

At least three major oil companies recently implemented temporary increases in their buy-back fees for national accounts. The increases reportedly add 10 cents per gallon (cpg) to the buyback fee schedules. The adjustments are said to be in response to the rapidly rising costs to deliver product seen since the start of the year. 

While distributors appreciate their channel partners recognizing the impact of rising costs by way of the adjustment, many say it falls well short of making up for the significant dent rising costs have placed on the profitability of buy-back business. 
Although the actual numbers differ by geography and other variables, many distributors say the combined cost of fuel, driver wages, and truck maintenance moved up by to 25% to 35% since the start of the year. Of concern is that the 10 cpg temporary adjustment represents only about half of the actual increases. Further, there are other costs (i.e., business insurance) associated with buy-back business that extend beyond fuel, driver wages, and truck maintenance and these costs too have increased. 
With that, lubricants distributors remain perplexed as to how the majors that implemented the 10 cpg temporary adjustment arrived at that same seemingly arbitrary number. 
At the same time, distributors say the move shows that some majors are making an effort to respond to the rapidly changing market conditions impacting distributor costs associated with national account business. Recognition of these realities is a welcome change and, in their views, potentially a good start to collaboratively developing more realistic, equitable and sustainable buy-back business models.  
3.6 7 votes
Article Rating
Notify of

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Inline Feedbacks
View all comments

News Archives

Would love your thoughts, please comment.x