Eurowag: Fuel Card Economics

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What is the rationale behind having their own fuel stations? Could you elaborate on the bunkering system and the partnerships that Eurowag has versus others like DKV or UTA that do not have their own fuel stations?

If you have a razor-sharp focus on HGV, like heavy goods, transports, and trucking, then everything is extremely price-driven. The question is, how can you lower your fuel costs for the market as much as possible? This is where controlling the entire supply chain becomes crucial. Over the years, Eurowag has developed unique expertise in purchasing fuel, focusing on the wholesale part of the market, which includes the transportation of fuel. You buy it, transport it, and then bring it to the fuel stations. By controlling them, you eliminate one part of the chain, which is the acceptance partner, thereby lowering your costs.

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What is the rationale behind having their own fuel stations? Could you elaborate on the bunkering system and the partnerships that Eurowag has versus others like DKV or UTA that do not have their own fuel stations?

The first Eurowag station was in Rozvadov, at the eastern border of the Czech Republic. It allowed truckers from the Czech Republic to refill before entering Germany, where fuel was more expensive. Building your own fuel station only makes sense if there is significant volume, which can be determined by analyzing customer behavior. As the customer portfolio grew, Eurowag could identify where volumes were concentrated and adjust locations to improve wholesale prices. This creates a flywheel effect, condensing volumes to optimize costs. Eurowag has strong expertise in all these areas.

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What is the rationale behind having their own fuel stations? Could you elaborate on the bunkering system and the partnerships that Eurowag has versus others like DKV or UTA that do not have their own fuel stations?

Bunkering is a logical extension of owning a fuel site. You may not have the same demand at every location, but there is substantial demand that could justify further expansion in the future. A good strategy is to use the infrastructure for purchasing fuel wholesale and expand capabilities to locations without owned stations by paying a service fee to third parties. Eurowag typically buys fuel through its channels, using refineries, wholesalers, and transportation companies to deliver diesel. The fuel is stored in bunkers and dispensed, with a service fee paid for each liter dispensed, usually a low single-digit number.

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