‘Fuel firms should pay fee for tankers’
Wednesday 14th January 2009, 11:30AM GMT.
FUEL companies operating in Guernsey should have to pay an annual fee after the States secured the supply of their products to the island by purchasing two tankers, Deputy Barry Brehaut (pictured) said yesterday.
He is to place an amendment at this month’s States meeting when members debate the Policy Council’s decision to exceed its mandate and buy the two ships without prior approval.
The amendment will ask deputies to instruct the relevant authorities to investigate charging the three companies that handle oil products – Total, Rubis/Fuel Supplies and Guernsey Petroleum Distributors – a yearly fee because they all benefit from the States’ decision to buy the tankers.
‘Government is purchasing two tankers for strategic reasons, but in doing so they gave security to the businesses that import fuel and distribute it locally,’ Deputy Brehaut said.
‘Under my proposal, the three companies involved would pay a flat annual fee to the States. It could be described as a fee for the maintenance of a contract, for example.’
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No doubt the fee will get passed on to the consumer….
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I feel that these 3 fuel suppliers should pay the total costs for at least one of the ships. Purchasing both was never needed and the Island was being well served with one.
Would Jersey be interested in buying the other one? If these ships are as rare as we are being told then why did the fuel suppliers not purchase them instead of our states.
Would they have simply allowed their fuel to run out and then go out of business then? I have no doubt that they would not wish to pay anything. However they should be forced to.
Taxi drivers don’t expect the public to purchase them new cars so that they can remain in business so why should the fuel suppliers expect free hand outs.
It seems strange that our states is using public money to pave the way for businesses that are already highly profitable.
If I wanted to start a haulage company would Lyndon Trott buy me the trucks to get me kick started?
I so yes please and cheers to all the taxpayers!
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What an idiot!
So the scenario is that Barry Brehaut decides to charge Total £100,000.00 for using Lyndon’s boat.
Guess where Total are going to get that £100,000.00 from?
Yes thats right, me and you because all they will do is put the price of fuel up to cover the charge.
You couldn’t make it up if you tried…..
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Agreed. It seems the fuel companies have got off extremely lightly. I’m not even sure they can use the word ‘supply’ as part of supplying means having the capacity to get the product to the island in the first place. In the colder light of day, these events require deeper scrutinisation.
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Surely the previous arrangement of delivering the fuel wasn’t free ! The previous business would have been making a return on their vessels….wouldn’t they?
So the question is what was the cost then and what is the cost now considering the States now own the vessels.
If the Fuel Companies are making savings then merely charging them a status quo sum wouldn’t be unreasonable.
Anything more than that will just be passed onto us tax payers….a double whammy!
So Mr Brehaut, give us the facts before jumping into the media.
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Pete Local
Whats idiotic about the above media then? The suppliers need these ships to remain in business. They therefore should be made to pay for the purchase and the running costs.
This is yet another form of zero 10. Without the transport vessels the suppliers supplies would dry up as well as their business.
Are you sugesting that the taxpayer should stomp up the full costs to keep these 3 businesses trading then?
Fuel businesses are highly profitable and should be able to transport their products to where they trade from.
If they are unwillig then what is the point in wanting them on this Island.
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So the public have paid for the ships via taxation and now BB thinks it would be fair game to have them pay (via increases in fuel prices to all users)annually, forevermore.
The companies could of course, just pack up thereby enabling Gsy taxpayers to purchase all their facilities and have complete control from import to user delivery!.
The companies may well have thought that money should have been spent on improving berthing facilities so larger ships could dock, as I believe Jersey have done.
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Paul, presumeably these ships will continue to be chartered by the oil companies on a commercial basis (as they were before).
So why would Barry Brehaut want to levy an additional charge just because the ships are owned by Guernsey (i.e. us!).
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Rob is right
The fuel companies must have paid to have their stock delivered to Guernsey. ( Why do you think Creasey’s levy a fee on their foodstuffs)
If they didn’t pay then it’s no wonder that the ship owners went broke.
Why not charge the Fuel companies an equal amount or perhaps a little more so that we don’t go broke
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A stealth tax on all fuel users, as the companies would increase prices accordingly to ensure that shareholders do not suffer reduced dividends.
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I’d love to have seen how different the reaction would have been if the three suppliers had decided it was too expensive / not worth supplying fuel in Guernsey and left. The outcry would have blamed the States for ineffective operation. “Why didn’t you buy the ships?” or similar.
They’re not perfect but judging by the comments on this website, the States will never win: damned if you do and damned if you don’t.
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Let’s get it straight: the purchase of the tankers is just a commercial transaction. The tankers were previously owned by a private company charging the fuel companies for delivering fuel.
Now the States own the tankers, and the States will charge the fuel companies for delivering fuel.
Provided that the States do not adhere to their traditional overmanning policy and run the tankers at a loss there should be no problem.
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fuel companies should pay and NOT pass on costs to users.
We are paying an arm and a leg for fuel as it is and havent got the luxury of changing supplier as in the uk
its appalling the members of society on benefit for REAL reasons and pensions have to choose between heating and eating!!!
Yes the companies should pay but NO the cost should not be passed on………..fat vat bosses getting enuf bonuses already
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Pah….. I don’t think anyone has said that the States did the wrong thing. The debate is over who should pay for the tankers that are delivering fuel so that the fuel suppliers have supplies to sell.
Melissa….. Guernsey has a history of encouraging the idea that fuel should be cheap. It is still cheaper here than on the mainland. It should not be cheap and it will not be cheap for much longer… the quicker we get used to that and invest so that we do not need to use so much, the better.
The businesses that import fuel must surely pay to import the commodity they sell. The cost should at least aim to contribute a significant portion of the cost of the ships that has had to come out of public money. When fuel becomes expensive, it will concentrate our minds as to how we can get off it.
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Rosie, are you well off? Because your environmental posts seem to be based on some sort of Utopian dream that few of us can afford?
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Unless I’ve missed something, someone, and I suspect it’s Deputy Brehaut, has missed a point and is misleading Melissa and Rosie.
As I said above this is just a commercial situation. Let me enlarge.
The company that previously owned the two tankers was charging the oil companies for transporting fuel to Guernsey. Those charges covered not only the cost of operating the tankers but also the capital cost of buying the tankers in the first place.
Now the States have bought the tankers and at a knock-down price, apparently.
So, if the States continue to charge the oil companies at about the same rate, they will recover the cost of purchase and, to boot, eventually the cost of replacing the tankers if that need arises.
Am I wrong?
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David Cranch
Why did previous owner go bust?
Was it due to lack of work to gererate the funds to meet costs and depreciation?
There is a major downturn in the shipping world with more ships,including tankers, being laid off each day.
The two Guernsye ships don’t seem to doing that much. The Vedrey Tora is today topping up the oil tanks in the Isle of Man. Much of its other work, if not all, is topping up the oil tanks of Guernsey and Jersey.
The other ship seems to do very little to generate income but much to increase cost and expense.
I just wonder if the work being carrried out is enough to generate the cash needed to trade successfully.
Perhaps Deputy Brehaut has done his homework. I have a sad feeling he may well be right.
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The previous company went bust because gradually its client ports starte either creating deep water berths or used dolphins to bunker. Once the client ports had deeper water, they then had cheaper shipping options.
The Vedrey for much of the year is anchored off variosu ports doing very little; she’s often here anchored out in the Roads for no apparent reason.
I’m still unsure why Rubis and Total didn’t know/buy these ships; it should be part of their job as ‘fuel supplier’, or am I jsut being blonde again?
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jackie
Thanks for explaining why the previous owners went bust.
You ask why the fuel companies didn’tbuy the ships.
Is the answer that they knew they had Guernsey over a barrel, and that The States has a record of making the taxpayer subsidise those businesses that can afford to pay for things themselves?
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Let us get things correct here, by someone involved in the oil industry.
The oil company charters the boat from the tankship operators, who in turn charter/lease the boat from its owner.
Put simply, the company created to own these ships,guernsey shipping, for example, lease them to a tankship operator (james fisher everards), this operator runs the ships, supplies crew and supplies and is on charter to various oil companies as required.
The ship owners,(now states of guernsey) get a
payment/rental from the operators, who in turn make their money from chartering them selves to the oil companies.
Guernsey, as now owners of these boats gets paid for leasing them to the operators, this money will be enough to cover the purchase of the ships and to cover depreciation etc.
What needs to be remembered, and quite often is not, is that , the states bought these ships, so that they did not disappear from the north european area and would be unable to serve us.
It has NOTHING to do with giving an easy ride for the suppliers, it is all to do with keeping a supply of fuel available to the islands.
May i suggest, that , for those who wish to comment after learning some facts, that they read this months billet detat, online on the states website, this gives an in depth insight into what and why these ships were bought, maybe, if more people read this, dep Brehaut included, we would see a few less ridiculous comments on this subject
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A shipping company runs ships to deliver goods via the sea and charges its customers accordingly.
An onshore distributor orders goods in bulk whenever they are required and pays the shipping company for their service and in turn delivers the goods as and when required by their customers. The shipping company aims to optimise its fleet to minimise cost and maximise profit.
It’s ridiculous to think that an onshore supplier in the business of running a fleet of oil tankers to deliver product to end users wish to run a shipping company!! They are two entirely different businesses.
The Chief Minister, in his States Members Briefing on 19th December said -
‘In this respect the vessels will be treated as an investment with an income stream, bearing in mind that an intermediary will take and manage the vessels for the States on the basis of “bare boat charters” paying the states a fixed monthly fee. When not delivering fuel to Guernsey they will be put to other commercial uses generating revenue for the company. With an average charter time of four days per voyage this will ensure that one ship is always available for fuel supplies to Guernsey, in the event of the other vessel being out of action.
The vessels will also be restricted to working around Britain and the adjacent coast of Europe.
Although the States has reached agreement with the intermediary, that Guernsey will have first call over both vessels, at present the sister ship is subject to charter commitments extending into 2010. Efforts are being made to release the vessel earlier however.’
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