Shell discount deal an irony

Samuel Ee, Business Times 26 Oct 09;

IT IS difficult to decide who is more frustrating - the value-for-money Singapore motorist or the congestion-causing oil chain that panders to him.

Last Saturday saw traffic snarls on Singapore roads leading to Shell petrol stations. All because the company decided to promote its new Shell FuelSave 95 and 98 petrol by offering them at a mere $1 per litre. Normally, these two grades retail respectively at $1.767 and $1.900 per litre before a 5 per cent station discount.

But for eight hours on Saturday, they were going for as much as a 45 per cent discount, with certain credit card holders saving even more.

So it was little wonder that long queues of cars began snaking from all but three of Shell's 65 stations islandwide from 10am onwards. For instance, Shell's Braddell Road outlet created a tailback all the way to the CTE intersection, with some bargain-seeking drivers joining the queue under the flyover.

As such, those drivers more used to weekend Orchard Road jams found the congestion redistributed across Singapore instead. Some may have been clueless about the big discount, or had already filled up before Saturday, or just wanted to mind their own business. But nonetheless, they were caught up in Shell's massive promotion too.

The question is, why couldn't Singapore's second largest network - after ExxonMobil - have done it in a better way?

For example, it may be low-tech but coupons cut out from the newspaper would have been more efficient than having a convoy of cars converging on a single day between certain hours. As it is, Shell had taken out print ads, so it would not have cost more. And to prevent any abuse, Shell can easily restrict each coupon to one car by recording the registration number. Or something like that. The point is, there must a better way than this unnatural clustering of cars.

What is interesting is that this is not the first time a Shell discount has caused traffic jams. On National Day, a smaller, 44-cent per litre pump discount for one hour had the same effect. From that lesson, Shell said that it decided to extend last weekend's promotion to eight hours to give motorists more time.

Alas, it looked like it merely prolonged the traffic chaos. True, the company hired Cisco officers to direct traffic and consulted the Traffic Police and Land Transport Authority, among others. But bargain-mad motorists certainly have a way of negating such efforts.

Not exactly fuel efficient

And more ironic than this is that the aim of the promotion is to allow consumers to try out Shell FuelSave's efficiency formula, which is touted to enhance fuel economy by 2 per cent. And because it really does work, Shell is understandably excited about sharing it with everyone else.

However, waiting in a queue of at least 30 cars with the engine and aircon running is by no means being fuel efficient. Do we have to burn more fossil fuels just to experience better fuel economy? Then, there are the other cars and buses that have to expend more time and energy due to the snafu when they could have otherwise cruise smoothly by.

Shell's own resources were sub-optimised too. On Friday night, its stations were largely deserted because presumably, people had got wind of the following day's discount. But even though there were no customers, the forecourts were still floodlit and the convenience stores staffed and their aircon compressors still running.

Overall, the cost to Shell was huge, in terms of generating awareness and managing the promotion, as well as the losses incurred from the huge discounts (for example, petrol duty of as much as 44 cents per litre still has to be paid to the government).

Yet, there is no doubt that the Shell FuelSave promotion was a clever way to get publicity for a new product and gain market share. But it could have been cleverer if Shell had done it with more efficiency and less wastage.

You save money, but it's the environment that pays
Letter from Lionel De Souza, Today Online 27 Oct 09;

SHELL'S FuelSave offer saw Singaporeans' kiasu spirit come to the fore. I noted that most vehicles in the queue had their engines in idle and air-conditioners on, hence releasing air pollutants. This is definitely detrimental to people suffering from asthma and other respiratory ailments.

Besides, energy companies like Shell claim to be doing their best to reduce the amount of carbon dioxide and other greenhouse gases emitted into the air by vehicles. Yet I am sure the thousands of cars lined up across the island did efforts to halt climate change no good at all.

Did Shell consider how their promotion would have had dire effects on the environment, and also on human health, just so it could promote its products?