Euro countdown

Dec. 28, 1998
On Jan. 1, 1999, the European Union will launch a new European currency, the euro, and introduce it gradually over 3 years. Being Europe, nothing is straightforward. The U.K., Greece, Sweden, and Denmark have refused to take part; and there will be no euro notes or coinage available until Jan. 1, 2002, just credit card and check payments (OGJ, Mar. 9, 1998, p. 40). Guy-Loup Motte, executive officer at the European Petroleum Industry Association (Europia), Brussels, said the EU signed agreements
David Knott
London
[email protected]
On Jan. 1, 1999, the European Union will launch a new European currency, the euro, and introduce it gradually over 3 years. Being Europe, nothing is straightforward. The U.K., Greece, Sweden, and Denmark have refused to take part; and there will be no euro notes or coinage available until Jan. 1, 2002, just credit card and check payments (OGJ, Mar. 9, 1998, p. 40).

Guy-Loup Motte, executive officer at the European Petroleum Industry Association (Europia), Brussels, said the EU signed agreements with consumer associations in July for the introduction of the euro.

"It has been up to the companies to translate the agreements into implementable measures," said Motte. "Most of our members have taken measures, but they involve commercial issues, so each has its own program.

"How petroleum companies introduce the euro will vary between the different companies and different countries, but we expect the basic information to be made available shortly after the introduction, in January."

Retailers ready

In general, said Motte, the more modern the gasoline station, the easier it is to convert payment and metering systems to dual-currency operation.

Yet, said Motte, with more than one half of Europe's retailing in the hands of third parties, it is virtually impossible to predict what will happen when the euro becomes legal tender.

Tom Bamber, senior consultant at CMG U.K. Ltd., London, said Europe's petroleum companies carry out the vast majority of their trading in dollars, but that they face the issue of whether or not to introduce dual pricing at EU retail outlets.

Bamber said many retailers in participating EU countries are prepared for the new currency and on conversion day will have people shinning up roadside price boards to display figures in euros.

"Many retailers hire managers to run their outlets," said Bamber, "and it is often the manager's decision as to whether the outlet's staff will be paid in euros, and whether the site accepts payment in euros and the local currency.

"Much of the conversion exercise decisions have been made at retail outlet level, and many managers have made the decision to change over on Jan. 1."

U.K.'s reluctance

The U.K. government's reluctance to leap into the European Monetary Union (EMU) has been reflected in a lack of interest by U.K. retailers in euro issues.

Yet more than 100 U.K. business leaders, including the chiefs of Amerada Hess plc and Shell International Ltd., urged the British government to join the EMU, saying that, "Britain's best interest is likely to involve joining fairly soon after EMU is established, and the best policy for Britain is one based on the assumption that we will join."

Bamber said CMG has had no approaches from U.K. retailers about preparing for the euro, although the company is looking to do business with non-participating Scandinavian countries, which have cross-border trade.

"U.K. retailers have had no drivers to study the impact of the euro," said Bamber, "though, with some oil companies thinking that the U.K. now plans to join EMU, they are thinking about the euro's impact. The key thing is to be ready."

Copyright 1998 Oil & Gas Journal. All Rights Reserved.