Gulf Oil Fuels Hossai with Ideas for Afghanistan

Because of security issues, we are not using Hossai’s real name, or photos that can identify her. She runs a fuel distribution business. Her first host company—Gulf Oil—is located in Massachusetts. Arriving in Boston from New York by train with her interpreter Farida, Bpeacer Paula Lerner met them at the station and hosted dinner at her home providing a family experience with Paula’s daughters and husband Thomas.

The next morning, Bpeacer George Matouk took over, bringing Hossai to Gulf Oil headquarters. Gulf Oil distributes fuel to over 2,000 service stations across the 11 Northeastern states. In addition to unleaded fuel, Gulf also sells diesel fuel, heating oil and kerosene and offers construction services, food concessions and financing.

Hossai visiting Gulf Oil facilities.

Hossai was interested in the way that Gulf conveys the company’s character and values through its marketing identity. Kathy O’Brien explained that their research had proven that customers are willing to pay more for gas if it’s delivered in a bright, clean, friendly and safe environment.

Hossai expressed admiration for the work environment in the Gulf Offices. In fact, she wanted to pack up the gym and fly it to Afghanistan.

Hossai at lunch with Gulf Oil execs including CEO Joseph Petrowski.

She was most interested in Gulf’s secret of success in fuel distribution. Some of the key insights Gulf Oil provided were: having access to enough capital to operate, employing state of the art technologies, retaining the best employees who are able to identify the best opportunities for profit. CEO Joseph Petrowski added that he thought the most important traits of Gulf Oil are trust, honesty and a commitment to maintain good relationships with customers and suppliers.

Hossai learned that the price of gas in the US is determined by the open market. The market is completely transparent because there is so much competition--there are 165,000 gas stations in the US. Regarding profit margins, distributors typically make 1% and retailers (service stations) make 4%. Since the margins are so small, both retailers and distributors try to increase their profits by offering additional services. The retailers are more interested in getting the gas customers to buy drinks and snacks than they are in getting them to buy gas. Distributors like Gulf are improving products by distributing higher margin products such as alternative fuels, construction services, environmental services and financing.

When asked how she differentiates her business from the competition, Hossai said that she tries to offer the best price, provide great customer service and provide credit for up to 3 months. This last point elicited shock from the management team at Gulf. Hossai said that in Afghanistan trust is a major part of the business relationship and extending such long credit is an important cultural value, although she charges a fee for it. One member of the management team suggested that Hossai could grow her business by taking advantage of her purchasing relationships in Iran to import fuel to sell to distributors in other regions of Afghanistan. Hossai said she was interested in expanding her business by opening her own service stations. Gulf warned her to be careful as her customers might respond negatively to her competing for retail business with them. On the other hand, Hossai followed up by saying that she could better meet her customers’ needs beyond oil by being in retail.

During lunch, Gulf’s CEO Joseph Petrowski asked Hossai about how Bpeace had helped her and George said she gave a wonderful answer: “In Afghanistan, we are like wild flowers in business. We are left on our own to grow or to fail. With Bpeace I have learned so many useful things about business that have made me more successful. At the same time we understand how our own success can contribute to the peace and stability of Afghanistan.”

Hossai speaking to 100 guests at the IOMA dinner.

Hossai, Farida and Paula were invited by Gulf Oil to attend the IOMA (Independent Oil Marketers Association) of New England's annual dinner, which was preceded by a trade show. After gathering much useful information at the booths, Hossai was asked to speak briefly to the more than 100 guests assembled to tell her story. Again the response was extremely positive, with many guests expressing great interest in her and her work.

The next two days Gulf Oil staffers squired Hossai, Farida and Paula around to gas stations and their terminal where various forms of refined fuel are delivered by boat and where the tankers fill-up for their deliveries.

Throughout the three days, to a person everyone at Gulf Oil was a fabulous host. For Hossai it was a packed and productive visit, and for the hosts and chaperones--George and Paula--it was a chance to connect in a personal way with Hossai, and learn about Afghanistan through her stories of her experiences.