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TAYLOR, Mich. -- Fuel distributor Atlas Oil Co. is considering investing in capital improvements and image-building for its network of BP gas station retailers, according to a report by Crain's Detroit Business.
Atlas is still deciding what to do with as much as $300,000 in BP rebates, Executive Vice President of Business Development Mike Evans told the magazine. The first payout will be made next week.
BP is paying regional distributors of its gasoline a 1-cent per-gallon rebate on gasoline sold at stations in Midwestern states. The funds are meant to help offset the impact of a consumer boycott in response to the Deepwater Horizon drilling rig explosion and subsequent crude oil spill, which began April 20, the magazine noted. Distributors in the Gulf Coast markets will receive a sum equal to 2 cents per gallon. Those who own and operate stores may pass on the rebates in lower prices on the street.
Atlas Oil distributes to approximately 70 BP stations in Indiana and Illinois, including 11 it owns and operates. It also supplies to a network of business and government customers in 21 states.
"We’ve seen about a 10-percent reduction in use at [BP stations] through [Indiana and Illinois]. You can’t really attribute it to really anything other than the Gulf right now," Evans said. "Demand’s not real robust right now in the market as a whole, but the decline doesn’t account for all of that."
Atlas has made a few advertising media buys in newspapers the Chicago area, hoping to educate buyers that a consumer boycott impacts local small-business owners more directly than BP, Crain's reported. The distributor is also considering using some of the rebate money toward a capital improvements fund to make enhancements to its network of BP retailers.
BP owns fewer than 5 percent of its 11,100 branded stations in the United States and began a push to sell off stations two years ago to franchisees and distributors, including Atlas Oil, the magazine noted.
"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," Evans 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 told the magazine Atlas will reach a final decision on how to allocate the funds by 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.