Honesty | Fletcher Oils

Honesty, such a simple word. It's used too much.

But what does it mean in the Used Cooking Oil world?

Let's be honest (I told you), if we assume that every UCO collector is doing the 'right thing' with your oil - i.e., ensuring it is recovered into clean, green biodiesel (not all of them do, but that's another story), along with Customer Service, the most important factor to consider is your Rebate, i.e. what you are paid for your oil.

Now, the team from Fletcher Oils have spent 15 years building Customer Service focused businesses, so we are completely confident delivering that to our clients. But what about the Rebate?

Twenty years ago, clients would have to pay to have their Used Cooking Oil taken away. Slowly but surely, as the growth in the Biodiesel manufacturing sector increased, so did the demand for UCO and inevitably this created a value which has grown over the years.

However, what dictates the price of UCO and thus how much Rebate should you be receiving? That, I'm embarrassed to tell you, has been a closely guarded secret for many years....

.....ooh, it's exciting isn't it...

Right, here goes, I'll keep it simple.

The Used Cooking Oil collected from you is recovered into Biodiesel in huge refineries in the UK and Europe. The resulting fuel is known as B100 (referring to the fact it is 100% biological in nature, i.e., it's made from UCO, not Hydrocarbons)
That B100 is then mixed with regular (fossil fuel derived) Hydrocarbon diesel. The mix is 7% B100 and 93% regular diesel. That mixed fuel is subsequently known as B7 referring to the percentage of the fuel that is biological. Next time you fill up your diesel car have a look at the pump, and you will see it has B7 printed on it
For the benefit of any fuel geeks reading this, YES, I know it's not 7% anymore, but that's not really important to this information; get back to reading your Fuel Oil News magazine...

Important: if you have a severe headache at this point or the screen looks fuzzy, don't read any more and go to bed and have a lie down. For a relaxing lie down, we recommend the Drift Gaming Sleepmotion Adjustable TV Bed Frame by Dreams (and in case anyone from Dreams are reading, I am totally cool about receiving free stuff)

These Biodiesel manufacturers sell huge volumes to forecourts etc. There is always a huge demand for Biodiesel and therefore there is always a huge demand for Used Cooking Oil to make Biodiesel.
These manufacturers sell their Biodiesel on very complicated but well-established futures markets which if I tried to explain, I'd have a severe headache, my screen would look fuzzy and I'd need to have a lie down.
Suffice it to say, because these manufacturers know what they are selling their Biodiesel for, they know exactly what they can pay for the Used Cooking Oil they need.
The collectors who collect your oil (after cleaning the oil and bulking it up into tanker loads) sell it to these Biodiesel manufacturers at the price they are given.
This price, being a Global Commodity price, goes up and down countless times every day. When the world is (relatively) calm, these up and down movements are too small to affect the price the Biodiesel manufacturers will pay for UCO.
However, when there are 'big things' going on in the world, these Global Commodity prices can wildly fluctuate.

Time for a Cup of Tea and a Quiz: Can you think of any 'big things' that have been going on in the world in the past few years that could affect Global Commodity pricing?

Here are a few examples for you:

Plus, lots of other things like volatility in the Crude Oil pricing, poor harvests, ships getting stuck in the Suez Canal. In the UK, the shutting down of most of the Hospitality sector cause a huge shortage of UCO (restaurants were not frying food).

Being very fair, during times of low volatility, when the fuel pricing were not causing the value of UCO to wildly fluctuate, the UCO collectors would often hold Rebates steady, taking little 'wins' and little 'losses' in profit as simply part of the UCO sector. That's how it should be done.

However, and it's a huge however, the world not been 'normal' for several years and this is where the secret of how your UCO collector 'calculates' the Rebate he pays you, results in you missing out on a fair share of some outrageous profits over the past few years.

Let me explain and give you an example:

If anyone needs a toilet break, go now (and remember to wash your hands)

To make things simple (which I feel I may have failed to do so far), we will call Biodiesel made from Used Cooking Oil "UCOME".

UCOME is a Global Commodity which can be looked up on the internet quite easily on sites such as Platts. As I'm sure you knew, it is an acronym for Used Cooking Oil Methyl Ester.

Now....

The world started to go a little bit mad following the Covid outbreak of late 2019 and first quarter of 2020.
Have a look at this graph, it shows the global Price Trend of UCOME in the few years running up to Covid. We always look at Price Trend rather than actual price, because the actual price is driven by quantity, location, specification and position. The Price Trend gives us an overall view of how UCOME is performing.

This shows the Price Trend of UCOME. A couple of spikes, but overall, fairly steady. This means that throughout these few pre-Covid years, your UCO collector would likely (and fairly) have held your Rebate fairly steady.
But now look at this graph:

Look at the incredible way the Price Trend of UCOME has soared from early 2020 to end of 2021.
What you are seeing here is the Price of UCOME, and therefore the value of UCO more than QUADRUPLE between Arpril 2020 and November 2021.

If you have fallen over in shock, please take some time to get your balance before standing up. Perhaps have a biscuit to get some sugar inside you. I highly recommend Fox's Golden Crunch Creams, lovingly baked since 1853 (and in case anyone from Fox's Biscuits are reading, I am totally cool about receiving free stuff)

So, where does it go from here? (Is it down to the lake I fear?). Let me try and simplify some more.

The increased value of UCO between April 2020 and November 2021 is huge - more than quadrupling in that time.
That means your UCO collectors have been able to sell your UCO to the Biodiesel manufacturers for vastly increased prices throughout that period.

Yes, it's the Big Question moment. If you feel you need to steady your nerves before you answer the Big Question, perhaps have a wee tot of Whiskey. I highly recommend triple distilled smooth Irish Whiskey made the John Jameson way since 1780 (and in case the good folk at Jameson Ltd. are reading, I am totally cool about receiving free stuff)

Did your collector offer you an increased Rebate for your Used Cooking Oil at any time between April 2020 and November 2021?

OK, let's finish things off by getting the picture fully up to date

It seems clear, from the information I have provided - which I urge you to go and check on the internet - the following facts about the UK Used Cooking Oil Sector:

The price of Used Cooking Oil is linked to the price of Biodiesel
The manufacturers who sell the Biodiesel know exactly how much they can pay for Used Cooking Oil
The collectors are paid by the Biodiesel manufacturers for the Used Cooking Oil they collect
The price of Biodiesel has rocketed up post-Covid, quadrupling across some periods
Therefore the Biodiesel manufacturers are paying the collectors very high prices
The collectors therefore are raking in huge profits from these very high prices
The collectors NEVER pass on these huge increases to their customers
That's the Secret the collectors don't want you to know

Oh, and by the way, in years past, and possibly in years to come, when the price of Used Cooking Oil goes down, do you think your collectors will immediately call you and tell you your Rebate needs to go down?

That's it. The Big Secret revealed. The Rebate Scam.

What should you do next?

Here is our advice

Take a look at how Fletcher Oils sets and continuously monitors its Rebate and how we openly explain this to our clients. This is fully detailed in our News (fletcheroils.co.uk)

Ring your Collector today and ask why your Rebate hasn’t significantly increased over the few years since prices started soaring when Covid hit

After they have squirmed and used phrases like "market conditions", "liquidity factors" and "I'm sorry, it's a terrible line...", give Fletcher Oils a call on 0115 916 2002 or email us at info@fletcheroils.co.uk and we will give you a Fair & Honest Rebate for your Used Cooking Oil

We're all done. Go and get a higher Rebate for your oil either from your existing collector, or from Fletcher Oils. If reading through this article has been a real strain, I suggest you treat yourself to some well earned retail therapy. I highly recommend buying a season ticket for Liverpool Football Club, perhaps even an executive box or at the very least, a seat near the Directors box (and in case those wonderful people at Liverpool Football Club are reading, I am totally cool about receiving free stuff)