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Transnet tender continues to empower South Africa’s independent fuel wholesalers

01 November 2014

Gulfstream Energy forms new company as part of its commitment to Transnet on Supplier Development

Gulfstream Energy, supplier of quality and innovative petroleum products and one of South Africa’s larger independent wholesalers, has recently announced the formation of a new company, G&T Tsela, in conjunction with Tipublox Petroleum.  Tipublox, an independent wholesaler and current Gulfstream customer, shares equal ownership with Gulfstream in G&T Tsela. The new entity’s main focus will be that of logistics within the South African fuel industry.

As one of nine companies collectively awarded the R 15.5bn Transnet contract at the end of 2013, and as part of the latter’s Supply Development Programme, Gulfstream made a commitment to place 20% of its Transnet fuel delivery with an empowered fuel transporter. Delivering on its word, Gulfstream decided to take it one step further and create an entirely new entity in conjunction with Tipublox.

The Gulfstream portion of the tender will see the delivery of significant quantities of fuel to all ports within South Africa for a period of five years. “But even more significantly, it has provided us with the opportunity to play a greater role in the development and sustainability of our local industry,” says Shane Jegels, Chairman and CEO, Gulfstream Energy.

“As an independent wholesaler, we need to create our own logistics capability,” says Phenyo Ntshabele, Financial Director, Tipublox Petroleum.  “But logistics and the required infrastructure require significant capital.” Up until now Tipublox has been making use of Gulfstream’s logistics capability to ensure delivery of its own fuel orders.  The new company will see Gulfstream funding the required equipment in addition to awarding a contract to deliver 20% of the Transnet order.

The relationship between Gulfstream and Tipublox has been in existence for many years. Having received its independent wholesale license in 2010 from the Department of Energy, Tipublox found itself in a situation experienced by many other independent wholesalers. “It comes down to security of supply,” says Ntshabele.  “In order to secure customers, you need to guarantee product supply.  However, in order to secure supplier relationships, especially with the larger players, one needs to have customers.”  This led Tipublox to approach Gulfstream Energy.  With a value offering, which encapsulates making fuel available to independent wholesalers who are not able to access product as efficiently, Gulfstream has subsequently being supplying as much as 80 – 90% of required product to Tipublox for the last two years.

But the relationship between these two independent wholesalers is about so much more than product. 

“We benefit from the entire supply chain through Gulfstream,” says Ntshabele.  “In addition to fuel supply we receive back end office support, the passing on of rebates ensuring Gulfstream always delivers ‘best price possible’ as well as logistics capability.” As a result, the significance of this new venture, proposed and spearheaded by Gulfstream, will see Tipublox now able to independently meet its own logistic requirements, further enabling them to take another step forward as an independent wholesaler.

It is an exciting time for South Africa’s fuel industry, which is seeing an opening up of opportunities for independent wholesalers not previously available. “It’s not about competing with the larger oil companies, but rather about carving a niche for ourselves as independent wholesalers, working cooperatively with the larger players for the benefit of our country’s fuel consumers,” says Jegels.   But it’s also about working together as independent wholesalers. “With Gulfstream, there is an understanding that we are working together to achieve something bigger than ourselves,” says Ntshabele. “They are empowering us with regards to business in general and our place in the local petroleum industry.”

“If I could sum up our relationship with Gulfstream in one phrase, it would be that of ‘mentor and big brother’,” continues Ntshabele.  “Dealing with one of the larger oil companies would render us a number, at Gulfstream we are part of the family and the learnings and support we receive from its management team continue to be invaluable.”

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