Never mind ‘the Gull Effect’ or ‘the NPD Discount’, Z Energy is set to makes its own budget fuel play – which might be the beginning of the end for New Zealand’s century-old Caltex brand.
In a competitive move to put pressure on some independents, Z is bringing its parent company’s diffusion brand U-Go to New Zealand. The first unstaffed station is already under construction on Hillsborough Rd in Auckland, and is to open in early April.
It’s just one block west from where McDonald’s is building a big new restaurant on a corner site between the Woolworths and the tennis club. “It’s a new site that we have been building for for a little while now, actually, but had some issues with ground compaction, which took some time,” says Z Energy’s customer general manager Andy Baird. “But it’s all set now, so it’s all good to go.”
Though the first station is an entirely new site, the second one on Manukau Rd in Epsom will be a conversion of an existing unstaffed Caltex station. Baird says the firm is planning 25 U-Go service stations by July – nine will be converted from Caltex sites, and 15 will be converted from Z sites.
Some affected staff at the existing full-service sites have already chosen to leave, and about 10 to 12 more in Auckland will be made redundant.
When Z’s parent company Ampol began replacing full services stations with 20 unstaffed U-Go sites in Australia, there was some unhappy community response to the job losses – but the numbers of jobs affected here are lower. “We aim to give people plenty of time, and if they have got another opportunity, allowing them to take it. And we’re working through redeployment.”
Because the sites won’t have convenience stores, that means they also won’t have EV chargers, Baird says.
“We strongly believe, from a Z perspective, that customers who want to charge also want the opportunity to do other things, like go to the bathroom, or grab a coffee, or do simple chores. So at this point, no EV charging – just pure, simple, gas and go.”
Baird won’t yet say where the rest of the new self-service sites will be, except that most will be in major North Island cities. There will also be two in Christchurch. There are no immediate plans for small-town New Zealand. “Smaller towns are difficult to make the business work,” Baird says.
Z Energy is licensed to operated the Caltex brand stations in New Zealand. And Newsroom revealed in 2023 that it was changing its 123 Caltex stations, mostly owner-operated, to compete in a different market from the premium pie-and-barista-coffee Z sites. It had converted seven of them into unstaffed fuel stops – Epsom, Newton and one other in Auckland, two in the Wellington region, and two in South Canterbury.
So had Z been losing market share to the likes of Gull and Waitomo? “I would counter that by saying, the more sites that open up, no matter how good you are, no matter what corner you’re on, you’re always going to lose some volume or some sales to a competitor. It doesn’t matter, really, who it is.
“New Zealand is quite well serviced by the number of locations, and the recent ‘building out’ by a number of new competitors – which is great, right? Good for competition, good for customers.
“But that does mean that the market’s not growing. So we’re at a point where we’re now looking to transition to EV charging and other alternatives.”
The pump prices can be set by the hour from Z Energy’s head office in Wellington, and will change with the push of a button. There will be no surge pricing.
Baird says U-Go will pump fuel at everyday low prices. “U-Go will bring greater competition into the self-service fuel retailer market in Aotearoa, and we think that’s great news.”
Baird says that in past years, motorists would usually fill up at the same local station – but more recently, New Zealanders have changed their behaviour.
“This is designed to satisfy that – ‘I just want to fuel and get going at an everyday good price’ – and that’s what U-Go’s all about. It’s a very clean experience, easy in, easy out.”
The Commerce Commission has attributed the changed behaviour, in part, to the opening of new unstaffed sites like the country’s 113 NPD fuel stops. And greater transparency around retail fuel prices, through commission regulation and apps like Gaspy, has enabled motorists to pick and choose.
The commission’s analysis of fuel monitoring data last year found areas that include at least one unstaffed fuel station within a five-minute drive have prices that are on average six cents per litre lower than those areas without unstaffed stations – though unstaffed stations run by supermarkets don’t have the same effect on competition.
“New Zealanders spend around $10 billion at the fuel pump every year, so even a small reduction in prices can put money back into the pockets of Kiwis,” said commissioner Bryan Chapple.
Automobile Association principal policy adviser Terry Collins says Z is going after the “no frills market” through brand differentiation, but isn’t materially increasing the number of service stations.
“If they’re chasing volume rather than mark-up, it could have a little bit of an impact on prices,” he says. “Competitors feed off each other, so it will be interesting to see what happens. They’re already in a fairly competitive market. It might sharpen prices in some areas, it might have no effect in others.”
It’s more cost-effective to build unstaffed sites than full service petrol stations. In 2018, the Commerce Commission reviewed data on 62 business cases for new-to-industry sites, built by a range of retailers. It indicated that the build cost per station – and that’s excluding any land purchases – typically ranged from $2m to $5m for full service stations.
Unstaffed sites, by contrast, cost between $500,000 and $1.5m to build, and of course, far less to operate because they have no staff.
At a time when more people are switching to EVs and active transport, fuel retail is no longer quite the money-spinner it once was – so unstaffed sites are attractive to the retailers as well as being cheaper for motorists.
BNZ chief executive Dan Huggins told the finance select committee last month that the bank would reduce its exposure to petrol stations. It plans to walk away from some stations – not out of “woke” opposition to fossil fuels, but because of a $132m credit risk.
How does UGo work?
Extracted in full from: https://newsroom.co.nz/2025/03/20/z-energy-drives-into-cut-price-fuel-market-with-u-go-unstaffed-stations/
