OIL giant BP is to embark on a huge expansion of its forecourt retail offering in South Africa, announcing on Tuesday that it will partner with Pick n Pay to build 120 more food convenience stores at its fuel stations over the next five years.
The planned move opens a new front in the battle for the motorist’s rand.
The partnership, expanding on Pick n Pay’s 17 existing Express convenience stores, takes on Engen’s similar relationship with Woolworths Food, which already has 45 stores.
"We have reached a standard agreement with the National Empowerment Fund to help mainly black women franchisees to be successful BP franchise owners," Iain Conn, BP’s refining and marketing MD, said on Tuesday.
He said the expansion, part of a R5bn southern African investment programme, would also see BP increase its own retail service network with 50 new stations in South Africa and Mozambique. This would take their number to about 700 in the next five years.
In total, BP would spend about R2.7bn on its retail network in Mozambique and South Africa over the five-year period.
"This is BP’s clearest demonstration of its commitment to creating and preserving jobs in southern Africa," Mr Conn said.
Pick n Pay would start by opening 40 new Express stores in the 2014 financial year, it said in its results presentation on Monday. This will immediately surpass Woolworths’ 45 stores, which are set to grow to 66 by June 2015.
BP said half the R5bn would be its share of the cost to upgrade its Sapref refinery joint venture in Durban. "The upgrade won’t affect the volumes of the refinery, but will help us meet our obligation to comply with the new clean fuel specifications required ," Mr Conn said.
South Africa has set in motion a process to reduce carbon emissions and lower the sulphur content of its vehicle fuels. The government would finalise the cost-recovery mechanism it uses to reimburse oil companies for refinery upgrades in September, said Nelisiwe Magubane, Department of Energy director-general.