Opinion is divided on whether discounts for fuel offered by non-bank credit cards will entice customers. Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) and Paz Oil Company Ltd. (TASE:PZOL) are currently the only game in town.
Delek Israel Fuel Corporation Ltd. (TASE: DLKIS) and Sonol Israel Ltd. are out of the game, athough Sonol owner Azrieli Group is seriously considering jumping in.
Dor Alon offers holders of its YOU credit cards a discount of NIS 0.30 per liter on gasoline and NIS 2.10 per liter on diesel. The company has already increased the discount for gasoline by 50% from NIS 0.20 per liter and is now considering increasing the discount for diesel to NIS 2.40 per liter. The company found that YOU cardholders refueled more frequently than persons without the card.
Paz is a partner with Super-Sol Ltd. (TASE:SAE;Pink Sheets:SSLTF) and Bank Leumi (TASE: LUMI) subsidiary Leumi Card Ltd. in the Supersol credit card. This card offers a discount of NIS 20 per liter for gasoline and NIS 1.70 per liter for diesel.
YOU CEO Shlomi Lahana said, "In view of rising fuel prices, the discount is becoming important for consumers."
However, off the record, top fuel market sources disagree. One said, "It's true that the incentive for non-bank credit cards is mainly in the form of discounts on basic goods, and fuel is a basic good. However, I don’t feel that a discount of NIS 0.20-0.30 per liter is enough for a customer to add a new credit card to his pocket."
Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008