In a sign of continuing consolidation in Jordan’s low margin fuel supply market, 10 independently-owned service stations are adopting Manaseer’s new sub brand, Manaseer Express.
Under the deal, the service stations, which are already supplied with gasoline by Manaseer Oil & Gas, will receive new logos, gasoline pumps, and automated pricing systems.
Manaseer Oil & Gas General Manager Yasser al Manaseer said his company wouldn’t be responsible for the day-to-day running of the newly-overhauled service stations, but it would set standards in terms of customer service, cleanliness, and safety. “The aim behind this is branding; they will not be owned or managed by us,” al Manaseer told Venture. “We signed a 10-page agreement with each gas station to ensure that they follow the same standards that we follow … which guarantees better services for the consumer.” He added that the service stations would be subject to continuous monitoring and inspections.
Looking ahead, al Manaseer said his company aims to include 50 to 60 service stations under its Manaseer Express brand. He also said his company planned to boost the number of its own service stations from 45 to 60 by the end of 2016, and 100 by the end of 2020.
Due to low profit margins in a market where prices are set by the government, he said companies like Manaseer needed to have a large network of service stations to make their business viable. “The local market is not encouraging because the profits are low,” he said, adding that net profit margin in the sector was only between 1.8 and 2 percent, compared to 7.5 percent in a country like Lebanon. However, he said the government had promised it would raise the margin early next year.
In late 2012, the Ministry of Energy signed an agreement with French oil giant Total and Manaseer, allowing them to distribute fuel to the Kingdom’s service stations alongside the Jordan Petroleum Refinery Company, which had enjoyed a monopoly on the market for decades.
Al Manaseer said these companies were set to sign an MoU with the government allowing them to begin importing 45,000 tons of diesel a month from international markets to cover for local shortages. Jordan’s single fuel refinery currently produces more than 1.5 million tons a year of diesel, which has long been criticized for being low grade.