Over the past few years the East African regional petroleum space has been hard hit by fuel deficit and rising fuel prices forcing motorist to dig deeper in their pockets for this precious commodity.
This has challenged regional petroleum players to find new ways to enhance productivity and cut costs in order to remain profitable.
Today, a number of newer business models have emerged due to rapidly changing dynamics that have impacted the market. One such technologies being tested and implemented by oil and gas companies are fuel monitoring and tracking systems which plays a big role in increasing efficiency and at the same time reducing safety risks.
Eqwipetrol, owned by Emerging Capital Holdings, has cut deeper into the bone of the industry by adopting unique strategies to set them apart from the pack as they target the low tier independent market.
The petroleum firm provides an electronic platform to independent retailers in a bid to ease the supply chain process.
The move by the petroleum wholesaler allows independent retailers to plan for their fuel demands, order for fuel and track consignments through a GPS tracking system.
“Eqwipetrol is Kenya’s latest revolution in the petroleum sector. We have created a platform that brings together over 1200 independent retailers across the country by integrating their end users with petrol service stations, supply chain and logistics in one shared app,” Gerald Njuguna, the Chief Executive Officer for Eqwipetrol says.
The firm with their seamless technology offers investors the opportunity to become a part of Eqwipetrol by investing in tankers that will be leased by Eqwipetrol for delivery of fuel countrywide.
With the regional oil sector largely dominated by foreign brands, Eqwipetrol’s new model is setting a new pace in the industry, giving independent retailers an opportunity to have a proportional advantage in the market.
“As Eqwipetrol we saw independent petroleum dealers are exploited by the middleman, and they also end up getting adulterated fuel products, we needed to change this,” Njuguna says.
To do this, Eqwipetrol is using their franchise model by partnering with independent petrol station operators with their main target in fossil fuel, logistics service and at the same time providing credit solutions.
“With our franchise model, the independent retail stations get to benefit from our brand identity and marketing campaigns to offer a better consumer experience,” he says.
Tagged “Hii ni Yetu” translated to “This (Oil) is ours”, Eqwipetrol is reaffirming the company’s goal of taking on the enormous oil market rivaling the already established multinational petroleum firms.
The firm, barely a decade old in the market seeks to liberate the market by providing quality service.
Njuguna points out that the market sale of the petroleum product is 400 million liters every month in Kenya, “Eqwipetrol is looking at 49 per cent of that number.”
The CEO is casting concern on the sector pointing out that no one else is helping the independent petroleum dealers to attain their targets where they can have a collective bargain and negotiation when it comes to their deals,
“So as Eqwipetrol we asked ourselves how can we provide a better narrative, how can we change this ecosystem and provide a better reputation, a better marketing strategy, a better access of quality product,” he notes.
The Kenyan-based firm main target is the 49 per cent of the independent petroleum traders currently in the country.
“These are relatively small one or two pump stations constructed and run independently by their owners. They don’t have widely recognized brand names. These are the various one or two pump petrol stations often found mostly in the rural setting,” Njuguna says.
Through the use of tracking and sensor technologies, Njuguna further reveals that they are an oil company that assures 100 per cent quality and zero adulteration of fuel and fuel products.
Njuguna indicates that their members are only selling three products; petrol, diesel and kerosene, “Currently we are looking at partnerships to bring lubricants; we are also going into LPG’s, But currently we are trading on the main products, Automotive Gas Oil (AGO), diesel, Super, Premium Motor Spirit (PMS) and Illuminated Kerosene (IK). But soon, we are looking at with adding new products like Eqwipetrol lubricants, gas, Eqwipetrol bitumen,” he adds.
To date, the company operates with an extensive network of over 420 stations, “We have co-branded for them and we are still getting more and mostly we have had challenges coming to this market I really understand for any market entry you always get challenges,” Njuguna indicates.
The oil firm has dedicated itself to providing the highest levels of convenience for its customers, early last year; Eqwipetrol signed an agreement with Equity Bank and National Oil Corporation cementing a renewed hope for their clients.
“Equity Bank with their end to end money platform technology unlike the other banks that ride on the already established systems, Equity has a footing everywhere with agency banking, and it is cost effective to the customers,” he says.
The partnership with the two firms will introduce Kenya’s first of its kind e-payment platform in the service stations. The move seeks to elevate Eqwipetrol customers’ experiences by bringing together flexibility, convenience and innovation at customers fingertips.
“This is a major step forward in our customer-centric strategy to surpass their expectations by implementing smarter solutions for their everyday needs,” Njuguna notes.
“National Oil Corporation is allocated 30 per cent of the market share yet they are able to control 8 per cent, which tells you that they have a deficit of 22 per cent and our target is to get 30 per cent. So we came in and said, you have this deficit let’s work together,” He says.
In regards to the petroleum industry, Njuguna points out that the market is not being supported fully pointing out that small holders are affected by regulations.
He adds that, with the emergence of Technology, the oil industry is going through a big change pointing out to the reduction of adulteration of fuel products.
“But we are saying, in the next five years we are seeing a significant change in terms of technological advancement in the whole supply chain process, monitoring, even in the ordering and delivery. We still have people who are distrusted because of corruption because of the old way of doing things, we need a digital footprint,” he says.
With Eqwipetrol, Njuguna alludes that Oil retailers now have a collective bargain within the petroleum industry, where they have a bigger say unlike the current way that is being controlled by big oil companies.
According to Njuguna independent petroleum firms are not given preferential treatment especially with the quarter allocation by the government where they are given exclusive allocation of 30 per cent and only control 8 per cent of that market.
“Local oil marketers lack the financial muscle that multinationals may have to compete in the sector. The market is mostly controlled by foreigners, as a country we have prospected and mined crude oils but all the major players are foreigners, a big chunk of the profit margins are taken back to their country, Africans we have the resources. Why can’t we have our own Africans providing for our own resources?” He poses.
“We can achieve this by partnering with like-minded people, as well as call on the government to support the industry. I tend to feel Africans should develop, appreciate and support their own products. We are way off as an African continent, but we can do better,” he says.
Being a disruptive technology, Eqwipetrol’s business model is cropping up in a challenging market as early adoption for startups in a country with low intern t connectivity is tough. But Njuguna is optimistic.
The new CEO, barely a year old in the company envisions that with their current trajectory, they anticipate Eqwipetrol to be one of the dominant players worldwide in terms of technology adoption.
“The technology that we develop is not there in other countries, we are even looking at reshaping the whole liberalization of petroleum market, where it will no longer be owned by a few.” He concludes.