Fuel for businesses

How did this project come about?

Eduardo Pegado: It began in March of 2006 – and it emerged from the intersection of various other projects that I’ve initiated throughout my professional life: the creation of “Agrupamentos Complementares de Empresas” (Complementary Groups of Businesses). Basically, its objective is to contribute to the development of associated companies – increasing their competitiveness. For example, through negotiations for better conditions with banking institutions and suppliers. I’ve created groups of supermarkets, hardware stores, clinics and hotels. This is my fifth project, and one in which I’ve used all my previous experience. The difference is that this project means to be “multi-sectorial”. Any business, of any size, working in any sector, can join.

And why fuel?

At the time this all started, there were huge price increases in the fuel sector. Increases that were not controlled by the Government – so I came up with the idea of setting up a network for associated members. We contacted all the fuel supplying companies in Portugal, to see which one would offer the best conditions for our objective.

You founded the AECCP in the Algarve, far from large centres of decision-making on the Portuguese economy. This didn’t make potential investors a little wary?

I don’t think so. At the beginning, companies were very dubious about the benefits they might get from supporting this project. They didn’t believe in it – because these days people talk about so many things. A lot of proposals are put forward, but in reality, very few make it. Some companies signed up, just to see. Others preferred to wait. We sort of went along like this until the moment we contacted some of the “Associações Empresariais” (business people’s associations), which wholeheartedly supported our idea. After that, we managed to increase our number of associate members.

You’ve a total of 7000 associated businesses right now, how many are from the Algarve?

About 30 per cent. In the beginning, we saw a huge amount of interest from regional businesses. But at the moment, so many are having problems due to the current financial difficulties, and as a result, they have other priorities.

How easy is it to join AECCP?

You simply have to fill out a candidacy form, which will then be analysed. If the candidacy is approved, you need to pay a one-off admission fee of €200. There are no annual costs, or other payments. And after joining, you can benefit from all the conditions available to all our groups. For example, there are advantageous terms for contracts with telecommunications operators. You see, our objective is to help companies reduce their operational costs. This doesn’t just mean fuel costs – but a series of other consumer items and services. We have agreements with lawyers, accountants, insurers, automobile manufacturers and car parts producers – even with control systems for those who run fleets of vehicles. In other words, there’s a whole series of advantages.

So what’s the position of the fuel filling-station network?

It’s two years since we started presenting our first projects to local councils. At the moment, two stations have been approved – one in Madeira (Santa Cruz) and the other in Palmela. Work on them will start in September. Then we’ll have one in Ourique, and the latest one we’ve clinched will be in Leiria, next to the EN1. Recently, the Mayor of Batalha also showed interest in having a meeting with us. There’s also interest from one of our own groups to offer some land in Borba for a filling station.

And in the Algarve?

We have one in Portimão that has been tacitly approved – another in Alcantarilha (which we spoke recently to the local Mayor about). There are others planned in Ferreiras (Albufeira) and Loulé (next to the industrial park). Then there’s one planned for Faro, next to the EN125, in Vale da Venda – and there’s also a project for a filling station in Lagoa, but it’s a bit behind schedule.

How much does it cost to create and maintain a filling station?

Our budget runs to 250.000 euros per station (including building work and equipment), and almost 40.000 litres of fuel per week. The land is usually given through “synergy” agreements with the private owners involved, or municipalities.

What fuels will be available?

Diesel and Unleaded 95 petrol. In the future, we’ll have gas, and connection points for electric cars.

How will people gain access to the stations?

Through a personalised magnetic card. Our stations will all be self-service, and some will have services provided by group members, for example: tyres, workshops and refreshment amenities.

How long will it take for the first stations to open?

They’ll be working before the end of 2010. On average, a station takes two months to set up. In the Algarve, we’re planning to open the Portimão station before the end of the year.

In practice, how much can a businessperson save at your filling stations?

That’s always going to vary, but we can calculate between six and nine cents per litre – with the possibility that we can improve on prices at any time.

How did you finance this project?

We have an anonymous society (SA) that was created to facilitate the whole AECCP project. People can buy stock, or invest in us. We’ve already made contact with foreign investors interested in this model of business.

But if your terms are more advantageous, many companies could abandon other schemes in existence (like special cards for fleets) to sign up to AECCP. Isn’t that direct competition?

You’re right, and it’s already happening. Albeit involuntarily, we’re entering a war. Our perspective and desire is that we should be partners with our suppliers – even if we’re seen as competition.

Could this cause difficulties maintaining the filling station licences?

The law of competition obliges them to supply us when we ask them to. But of course, they could create difficulties – like demanding payments up front. In the end, if we can’t be supplied by Petrogal – the only fuel supplier in Portugal – because they refuse to do so, we could buy from Spain. In Madeira, where we have the support of the regional government, we’re quite certain that if Petrogal don’t want to supply us, they’ll be obliged to in the end – just as they were made to bring down prices recently.

Have you received any support from the Portuguese Government?

No. We made a number of contacts, but we never got any replies. There are two vectors at issue here. The Regional Government of Madeira is concerned with the development of its businesses park – while our Government is playing a very different kind of game. It means to favour the large business groups.

If the Portuguese Government pressured fuel suppliers to give prompt, objective answers, would your project be further advanced?

No doubt. The Government says that it supports the development of strategies that look to benefit companies and citizens, but, in practice, all it does is create difficulties for us.

So right now, what would you need?

Two things. Support from Government bodies that could direct us towards funds or incentives to help our initiative along. Banks are closed to credit, so we have to ask our own associate members for money to get things moving. Equally, we’re receptive to new investors. We know our project makes sense, and has all the conditions to bring a good return.

One last question – is it really still worth betting on fossil fuels?

I think our dependence on fossil fuels for energy will continue for a long time to come. I remember first hearing about renewable energies more than 20 years ago – but I don’t think they’ll do well because the power of the fuel giants is so enormous that it kills any other opportunity that appears on the market.