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News Article

A Spectrum of Possibility Opens Up for Fuel Retail

By Pedro Alcalá | Thu, 10/29/2020 - 13:01

You can watch the video of the panel discussion here.

While upstream companies face complex issues in the hopes of establishing a path toward the future, the downstream side, specifically the fuel retail sector, is enjoying a time of great activity and excitement despite temporary setbacks caused by the COVID-19 pandemic. Day 2 of Mexico Oil & Gas Summit featured a panel titled “The Future of Fuel Distribution,” moderated by Roberto Díaz de León, President of ONEXPO, which is the most important industry association in Mexico for the fuel retail sector. Díaz de León’s introductory remarks were characterized by his optimism and enthusiasm regarding the future of the sector.  

The panelist who was most excited about the possibilities that the future may bring was probably Bernardo Cardona, Managing Director of Clients and Industries and Corporate Responsibility & Sustainability Lead at Deloitte Consulting. New technologies that Cardona mentioned would be included in gas stations in the near future are “Tap-To-Phone” programs and payments, QR codes for digital payment like the ones used by Rappi and Mercado Pago and even unmanned “dark stores” that can be ideal for last-mile delivery services. “If digital payments are linked to marketing and loyalty programs, the benefits could be vast. Globally, there is a lot of potential for doing business in various formats. These have not been applied to the selling of fuels as of yet.” Cardona also touched upon the future of service stations as not just centers for the retail of gasoline but centers of energy distribution in a broader sense. "Gas stations will increasingly deliver other forms of energy. There will be charging stations for EVs and LPG for NGVs." 

Panelist Luz María Gutiérrez, CEO of growing brand G500, was more cautious in her optimism, noting that the sector was a little slow to adopt technological innovations. “Today, we are turning to the digital sphere and its benefits.” Guitérrez was clear in her message that, if the fuel retail sector wanted to reach its full potential , it was going to need clarity in terms of marketing and product. “We have to think about who our customers are and what they care about, like millennials who are more focused on the environment and sustainability,” she said. 

The panel was further enriched by the participation of panelist Sebastian Figueroa, Director General of Fullgas, who introduced a comparison between the Mexican and the Guatemalan fuel retail market, noting that Mexican fuel retailers suffer under a much heavier fiscal burden and it would be in the interest of the Mexican state to diversify its sourcing of tax revenue. "I think that today, we are not moving as fast as other countries when following international gas station trends.” He also mentioned the role that molecular technologies, specifically quality fuel additives that can enhance a car’s longevity, along with trained staff, will play in the future competitiveness of players in this market. “Without training and an experienced staff, you cannot grow further in the sector and compete with companies that have more resources,” he said. 

Enrique Olivera Melo, Director General of Wascon Blue, contextualized this optimism in terms of the future role of price and how that illuminates the future of the sector when compared to the US. “Fortunately, not everything is about price. If you want to attract customers, you need quality fuel. The Energy Reform offered an opportunity to improve in this regard. The American business model will be replicated in Mexico. The growth of big companies entering Mexico's retail segment will eventually stop and they will leave, as it is a difficult business.”

Pedro Alcalá Pedro Alcalá Journalist and Industry Analyst

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