Zavalloni, secretary general of Fegica: “Prospects are uncertain. The network must be rationalised”

  Fuels, NEWS & INTERVIEWS

After a fall in sales of 85-90%, the sector now has to cope with a recovery affected by a whole series of conditions, especially the closure of schools

 

Interview with
ALESSANDRO ZAVALLONI, secretary general of the Italian Federation of fuel and related plant operators

 

A fall in sales between 85 and 90 per cent during the lockdown months to contain the coronavirus pandemic and a recovery today hampered by various conditions. This is the snapshot described by the secretary general of Fegica Cisl, Alessandro Zavalloni who, in a recent interview, illustrated the current situation in the fuel and related plant operators sector and prospects for the future. “In general terms, Covid had a major impact on our sector in view of two main factors: the first was the slump in sales of 85-90 per cent,” said Zavalloni. “Experiencing three months in such conditions has generated problems clear even to non-experts,” the secretary general of Fegica pointed out, while also mentioning that this situation did not even help reduce fixed overheads. Costs remained “rather heavy” for the ordinary network; however, as Zavalloni noted, the motorway network was hit the hardest by these costs, since they are open 24 hours a day, seven days a week with three shifts per day. “Even points of sale that normally handle five to six million litres on average, itself a figure at the limit of economic sustainability, have experienced very dramatic situations during this period of falling sales and unchanged overhead costs.”

As regards the post-reopening situation, Zavalloni noted that while there has been a recovery, it is however affected by a series of important conditions, especially the closure of schools. In this context, Zavalloni suggests that re-opening schools in September will be an “essential element” for understanding prospects in the future. In fact, according to the secretary general of Fegica, in addition to the resumption in movement and the consequently increased consumption of fuels associated with the use of second cars, the re-opening of schools will also have an effect on the re-opening of workplaces. “If schools open, then offices will also come to life again. If they don’t open, it will be a problem and we will have to continue with smart working,” he explained.

Zavalloni emphasised that Fegica in this period set itself “the goal of discussing matters with oil companies and authorization owners in general” and managed to achieve emergency agreements that helped buffer the situation. “We were rightfully able to include our category within the scope of general dispositions. As regards the motorway network, we obtained – for operators who had not been able to take advantage of the measures envisaged by the redundancy fund in derogation that contributions were figurative – a contribution discount. In general terms, we also managed to include the category, with the special feature of the legal figure of motorway managers, in sinking funds which ensured some breath of fresh air. Although the situation was dramatic, critical after the lockdown and still completely uncertain as regards the future, both with our natural counterparts and also the government, the category has achieved results which, while not being able to offset the critical situation, did manage to buffer it and the operators generally did not find themselves out in the open,” Zavalloni pointed out.

As for prospects for the future, the secretary general of Fegica indicates considerable uncertainty in the short term. The outlook is uncertain in the short-term, as it is all throughout Italy, and it is difficult to imagine what will happen in a sector such as ours that is affected by mobility around the country,” said Zavalloni, also mentioning that the fuel distribution network sector is one of those affected by several different dynamics and, not surprisingly, is included in a series of activities monitoring the situation in the country providing data used by research institutes and the government. As regards the long term and the possibility of assessing and seeking access to European funds, Zavalloni added: We will work to achieve access to funds but it would not only be a strategic mistake but also irresponsible to imagine that this is the future perspective for the sector.” The secretary general of Fegica suggests that the sector itself is entitled to “the task, the strength, the ability and the ambition to govern oneself.” “There are so many things that must be done,” Zavalloni pointed out, to ensure that operators have a chance to work in fair, albeit not brilliant working conditions but this can come about “only if the sector in general takes a virtuous path.”

“We said,” he emphasised, “even before Covid that we had to move on from the solidarity contract emergency. One of the things that must be done is a review of agreements and economic conditions, although merely putting forward requests would be rather pointless. We therefore asked ourselves the question, as Fegica: where could resources be found.” The proposals outlined in this regard by Zavalloni above all include network rationalization. This requirement arises from inefficient average delivery, with a certain number of plants that survive exclusively thanks to fuels, as well as poor maintenance, with safety and environmental impact problems. Furthermore, Zavalloni highlights another problem requiring greater network rationality: the continuous opening of points of sale in a sector defined as saturated, encouraging situations that are even a source of illegality.

“We have a project we will publish soon (in September). From our point of view, we must have the ambition and the strength to close at least 10,000 points of sale over the next three years, thereby reducing the Italian network to 15,000 centres. And as regards the ordinary network, we should close at least one hundred service areas. This does not mean closing the entire service area: catering and assistance can remain open,” Zavalloni pointed out. The secretary general of Fegica clarifies that there is no sense in having a petrol station every 30 kilometres, especially in light of 80 per cent lower sales since 2008. In any case, Zavalloni also suggest that it would be possible to have a more rational network by resorting to tools used in other European countries, such as Belgium and above all the Netherlands, which rationalized their networks by ensuring that the owners closed some of the new plant installations by awarding public funds, financed partly by private and partly by public sectors. The secretary general of Fegica feels that this would encourage rationality, identical procedures and land reclamation in a codified and certified manner. “Covid is a problem but it must also be transformed into an opportunity, i.e. the need for a national network, not only to ensure that plant installations are more efficient but also to ensure greater legality,” concluded Zavalloni.