Selling new petrol case of pumping product to public

Are new fuels a marketing ploy or a boon to motorists? Consumer reporter CHRIS DANIELS investigates.

"Rediscover the joy of driving with Mobil. From the moment you turn the key, you will feel the difference," the blurb gushes.

Oil companies are spending millions of dollars convincing us that their petrol is better than that of the competition.

Mobil has renamed the petrol it sells to New Zealand motorists, calling it "Synergy."

It claims new additives make the petrol more efficient and burn more cleanly, protect engines and are less damaging to the environment.

The Synergy range is a match for BP's Ultimate petrol and Caltex's Vortex.

Vortex contains "an advanced, proprietary deposit-control additive designed to clean up harmful intake and fuel system deposits," says Caltex.

Synergy 1000, says Mobil, "cleans up and keeps clean fuel delivery systems."

Of the big four oil companies, Shell is the only one not to individually brand its petrol, saying it prefers to compete on price.

But it is hard to say if these changes make any difference, says Bob Lewis, general manager of technical services for the AA.

"Nobody other than the oil companies has actually tested the fuel itself to say whether it has got the goodies in it they say it has."

Mr Lewis says the move to promote high-octane fuel to the average motorist is interesting because up to 95 per cent of the New Zealand vehicle fleet has no need of other than standard 91 octane.

Octane rating is a measure of a petrol's ability to resist engine "knock" or "ping" resulting from uneven burning of the compressed fuel-air mixture.

Unless a motorist drives a turbo-charged, high-performance car such as a Ferrari, or an "old banger" such as a 1970s vintage Holden, there is no point buying high-octane fuel, says Mr Lewis.

Mobil's Synergy 8000 - the highest-octane fuel sold in New Zealand petrol stations, is promoted as "suitable for all petrol-powered vehicles." Small-car owners "will gain efficiency benefits from Synergy 8000," it says.

Not really, says Mr Lewis.

"Stay with the manufacturer's recommendation for that vehicle. In most instances, they recommend 91."

BP Ultimate has an octane rating of 97.5, while Synergy 8000 is 98.

But oil companies are also branding their petrol through the detergents and corrosion inhibitors added to the fuel.

Mr Lewis says the practical use of new petrols is "usually in the eye of the beholder" - people think they are getting extra speed, power or efficiency mostly because they have paid more money for it.

Caltex product manager Frank Wong takes a similarly dim view of the value of a high-octane petrol to New Zealand motorists.

"Using a higher-octane petrol than is recommended by the manufacturer will not increase performance, power or economy."

Dr Robert Raine, associate professor at Auckland University's Mechanical Engineering Department and director of the Energy and Fuels Research Unit, is kinder to the oil companies.

He says there is more to new petrols than advertising.

"There are small improvements, small incremental changes that go on all the time."

And if the companies want to launch an advertising campaign promoting the latest, albeit slight, change in fuel mixture, why not?

It would be extremely difficult for any consumer to accurately gauge whether a new fuel made any real difference to efficiency, power, wear or acceleration.

So is it good marketing ? Well, it depends if you can sustain any competitive advantage, says Auckland marketing lecturer and consultant Tom Agee, who once worked for a big oil company.

"It's a marketing device to try to build market share," he says. Despite every other oil company supplying petrol that is essentially the same, the chain that convinces customers it is first with the new petrol will "own the franchise."



An oil company needs a "sustainable competitive advantage," says Mr Agee.

This was sometimes hard when competing on service, because companies often employed young people, and had high staff turnover.

Mobil needs some new advantage, because it has slipped from number two to being the third biggest petrol retailer. .

BP and Shell fight for market share at the top, each at around 27 per cent.

Mobil now has 22 per cent, Caltex has 17 per cent.

So Mr Agee offers a plausible, though perhaps cynical, view of what happens around the oil company boardroom:

"We can't compete on service, we can't compete because we don't have the lion's share of locations, so we'll modify very slightly - a small factor X in our petrol.

"Let's make it sexy, let's give it a name and promote it."