It was commercially absurd to argue wholesaler Petroleum Logistics Ltd had agreed to charge Whitianga reseller Acme Fasteners the ex-Singapore price for petroleum products with no mark-up for shipping, delivery and margin, the High Court ruled.
Peter Berry claimed he had been overcharged more than $140,000 for fuel supplied over the previous five years when sued by Petroleum Logistics in 2017 for account arrears. The High Court was told payments had been kept up to date for the first four years, then monthly invoices started being paid in rounded amounts before default. Fuel supplied in bulk to Mr Berry’s Acme Fasteners was onsold to retail customers, mainly fishing and charter vessels operating out of Whitianga. Acme Fasteners customers were issued with fuel cards allowing them discounts on fuel purchased from pumps both at the wharf and at nearby BP and Mobil outlets.
Evidence was given that Petroleum Logistics’ supply contract described the ‘wholesale price’ as being that determined by MOPS: an acronym for ‘mean of Platts Singapore’. This is a reference to pricing benchmarks published by global energy information provider Platts which publishes forward pricing (typically 15 to 30 days forward) for oil products loading in Singapore. Mr Berry said this was the price he should have been charged for fuel supplied over the previous five years. Justice Lang said it was a commercially absurd result to have Petroleum Logistics agreeing to supply fuel to a customer in Whitianga at an ex-Singapore price. The plain words of the contract made it clear MOPS provided the base wholesale price with Logistics expenses and margin to be added in, he ruled. If there was any valid question over calculation of the wholesale price, it is likely to be raised early in the supply relationship rather than when sued for non-payment. Acme Fasteners was ordered to pay arrears of $71,300.
The court was told the price Petroleum Logistics charged Acme Fasteners changed every few days following movements in the price of oil and exchange rates. Mr Berry was advised every day the supply price changed so he in turn could immediately adjust his retail price.
Berry v. Petroleum Logistics Ltd – High Court (26.10.18)
18.212