Guidelines for Better Diesel Fuel Supply Contract

The guidelines bellow are especially useful for Transport fleet companies, Contractors, Fishing fleet, Rail operators and all other large scale (Industrial and Agricultural) consumers of "Diesel Fuel" who contract with Oil Companies for the supply of their fuel:
1-Irrespective of the supplier or the approach used, proper contracting (in writing) yields better results as far as the price and overall cost of fuel purchased.
2-It is always better to invite more than one supplier privately or by tender to submit full written offer on document prepared in advance. An ever-green agreement is easier but may be subject to exploitation by the supplier.
3-Written offers should be studied carefully as there will always be problems due to vague or missing provisions in the agreement. You have to remember that however smart you may be, a contract prepared by the supplier will work to his advantage. He has the expertise to embed sentences and provisions which are carefully worded and formulated to give him that advantage.
4-There will be room to improve on offers submitted in the final stages before contracting especially if you have more than one offer in hand and are aware of the market facts and trends.
5-Put a time frame to complete the contracting process and stick to it as this will be respected by the suppliers.
6-Let suppliers be free to submit more than one option as far as prices or price adjustments is concerned as this will give you a variety of option from which you may choose.
7-Contract duration is very important item in the contract, depending on your situations; you may fix it in the tender document or leave the supplier to determine the duration that suits his economics best.
8-In some cases it may be helpful if suppliers are asked to split the price into two components a- Price FOT depot (or truck-stop) and b- Transport cost to your storage (if you have storage), you will then be able to compare prices at different supply locations and may use your own transport contractor.
9-It is good to be loyal to your supplier, but you got to make sure (through the above procedure), that your supplier is also loyal to you.