ATF Fuels’ decision to scrap its independent supply model and join Jersey’s consolidated fuel infrastructure was not driven by market volatility stemming from instability in the Middle East, according to the firm’s director – who has instead pointed to rising premiums and shipping costs over the last decade.
However, Jonathan Best also said that the move would provide greater “stability” against daily price fluctuations.
He made the comments after the firm announced that it will now source fuel through La Collette Terminal, aligning itself with the same supply system used by other providers on the island.
The transition means that ATF will not be able to supply E10 petrol or B7 diesel at their forecourts in the short term. These two fuels contain renewable components and are widely seen as more environmentally friendly.
It gives us more resilience with the change to this supply chain than we had in our previous supply chain in terms of fuel stored on island
ATF Fuels director jon best
But the firm stated that the new structure provides “appropriate operational involvement and oversight, strengthens our independence, and supports effective cost control within the supply chain”.
The announcement comes around the same time that the US and Iran agreed on a two-week ceasefire, marking the latest chapter in a conflict that has caused immense turmoil within global energy markets.
Mr Best had previously told Express that he had “never seen daily fluctuations over a period of time such as these”.
But, commenting on ATF’s decision to adapt its supply chain, he highlighted that “discussions have been ongoing for a period of time”.
“It’s more by chance that it’s happened at a time when there’s instability in the Middle East,” he said.
Outlining some of the key factors involved, Mr Best explained that the firm had faced “escalating” supply chain costs since it was established in 2014.
He cited rising premiums as well as shipping costs, noting that the latter expense had “almost doubled” over the last ten years.
While he acknowledged that this had been “exacerbated more recently by what’s happened in the Middle East”, Mr Best added that “it’s not fair to say the current situation dictated or influenced the decision” to adapt ATF’s supply chain.
“What I would say is, by default, it gives us more resilience with the change to this supply chain than we had in our previous supply chain in terms of fuel stored on island,” he continued. “It gives us a great degree of stability.”
Commenting on the recent ceasefire announcement, he noted that “the market is significantly down on an intraday basis”.
“Whether that will continue will depend on the ceasefire, whether it holds and what will happen beyond that period,” added Mr Best.