BP Offers $30,000 To Atlas Oil

After receiving a recent $30,000 rebate from BP Corp., Taylor, Mich.-based Atlas Oil Co. is considering investing in capital improvements and image building for its network of BP gas station retailers affected by customer boycotts, following the Gulf of Mexico oil spill, Crain’s Detroit Business reported.

Atlas is a fuel distributor to about 70 BP stations in Indiana and Illinois, including 11 as owner-operator, out of nearly 400 gasoline convenience stores in Illinois, Indiana, Michigan and Ohio.

In late June, BP confirmed it was offering regional distributors of its gasoline a rebate of one cent per gallon sold at stations in Midwestern states, to help offset the impact of the widespread consumer boycott in response to the crude oil spill that began April 20. The cash back amounts to two cents per gallon in areas along the Gulf Coast.

“We’ve seen about a 10% reduction in use at (BP stations) through those markets (Indiana and Illinois). You can’t really attribute it to really anything other than the gulf right now,” Atlas’ Executive Vice President of Business Development Mike Evans told Crain’s Detroit Business. “Demand’s not real robust right now in the market as a whole, but the decline doesn’t account for all of that.”

The distributors, who in cases like Atlas own and operate some of the affected stations, can pass along some of the savings to motorists in the form of cheaper gas. 

Atlas has already bought newspaper advertisements in the Chicago area, to educate consumers that a boycott impacts local small business owners a lot more directly that BP. Atlas may also use some of the rebate money toward a capital improvements fund to make enhancements to its network of BP retailers.

BP owns fewer than 5% of its 11,100 branded stations in the U.S. and began a push to sell off stations two years ago to franchisees and distributors, including Atlas. By buying local advertisements, Evans hopes to inform customers about the rate of independent ownership and the real impact.

“The new rebates actually go to the distributor, and the distributor then figures out how best to help the retailers grow their business, in terms of helping them rebuild in their markets,” he said. “So we’re looking at programs where we invest capital in a location, to make it friendlier to the consumer, whether it be a new sign or curb appeal, or a new service it can offer. We’re kicking around those ideas.”

BP has said the cash to distributors is for gallons purchased in June, July and August.

Evans said Atlas will reach a final decision on how to allocate the funds by the time the June payment is distributed in mid-July.

If BP stations average more than 100,000 gallons sold per month over the affected period, Evans said the rebate could amount to more than $1,000 per station, or nearly $100,000 per month each of the three months.

 

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