 Caltex was originally registered as the Star Oil Company in 1920. Star was established to import and distribute fuel oils from the USA under the Texaco brand. Lubricating products were handled by the Texas Company Australasia Limited while refined products such as gasoline and kerosene were distributed by Star under agreement with the Texas Company.
However, the early years were not without their share of frustrations. Competition between the various brands was intense with competitors using price-cutting and free delivery offers to attract customers. By 1923 Texaco products (particularly asphalt and kerosene) were becoming more popular in New Zealand but the intensity of competitor's marketing activities were taking their toll on Star. The result was a take-over of the company's operations by Texaco during that year.
In those early years the principal stockists of petroleum products were dairy companies, stock firms, country grocers etc.
 Service stations as we know them were non-existent, though motorists, who not long ago had operated horse drawn vehicles, still called on blacksmith shops for motoring service in the country, with many blacksmiths being the forerunners of today's service stations.
Before pumps were invented, a three-legged steel tripod construction with a 'V' shaped top was used to tip the petrol from the tins through a hose and into cars' petrol tanks. The top of the tripod had a sharp steel spear-like head that pierced the corner of the tin so that the petrol could be released through a nozzle into the petrol tanks of the vehicle. The contraption was usually kept in the front of the shop and carried around to the back of the shop at night. Oil was supplied and sold from pint and quart bottles from a crate.
Transporting and selling fuels to a blacksmith was the responsibility of Texaco's salesmen. The road and transport system during this period made this role both challenging and diverse. During the early 1900's New Zealand's roading infrastructure and the company's organisation were still in their infancy. There was no price control, no government regulations or intervention and only a rudimentary distribution system. Country salesmen were away for weeks at a time and when they did travel in their own vehicles, they traversed dangerous and rough roads.
 During this period all products were marketed in tins and cases which had to be stored in specially constructed warehouses with bund walling and special ventilation. The disposal of empty containers presented a considerable problem, the roadside often being littered with them. It was obvious that more improved methods of handling and distributing fuel were required.
The problem was later solved by the construction of a chain of ocean terminals and bulk depots at principal towns throughout New Zealand. In 1928 a start was made to build ocean terminals at the main ports of Auckland, Wellington, Christchurch and Dunedin, as well as bulk depots at several other provincial centres. Bulk distribution was a significant point in the company's history, and from that time our operating facilities continued to expand.
Most service stations during the early 1930's had a selection of pumps outside their shops, all selling different brands. Gaining representation at some sites was almost impossible, and on numerous
 occasions the only option was to encourage a new site to open. The advantage of these sites was that they were invariably one brand and by maintaining good relationships with these sites, many remained loyal to our brand. Texaco (later Caltex) was the only company with one brand or 100 percent outlets as they were called at this time.
However, simply opening a new outlet didn't guarantee representation. In some instances the market was so competitive that some existing operators used cut-price tactics to force the newcomer out of business. Price was highly volatile with the market determining fuel prices. The entry of Europa into the market in 1933 merely intensified this situation.
To bring some form of stability to the industry the then government passed the Motor Spirits Prices Regulations in 1933, which fixed the price of petrol. There was no maximum or minimum, merely a fixed price for the wholesaler and a fixed price for the retailer.
Government legislation went one step further in 1935 with the passing of the Industrial Efficiency Act, which put the issuing of licenses to sell petrol under the control of the Bureau of Industry. This gave rise to some rather strange fuel selling outlets, one being the Catholic Presbytery at Te Aroha.
To obtain a license a prospective operator had to provide a full motor repair and service facility, with a specific turnover. Consequently petrol-reselling outlets were mainly established where there was a repair garage, without any regard to the traffic flow or convenience. This system existed until the passing of the Motor Spirits Distribution Act in 1953.
In 1936 the Texas Company combined with the Standard Oil Company of California throughout the Eastern Hemisphere to form the California Texas Oil Company Ltd (Caltex). The formation of a joint venture between two 'giants' of the oil industry enabled the new company to maximize the opportunities and facilities that each company offered. Standard Oil (now Chevron) had significant supplies of crude oil in the Arabian Gulf but with the United States enmeshed in the Great Depression demand for oil in this market was shrinking. Texaco offered strong marketing capabilities in Australia, New Zealand, Hong Kong, India, the Philippines and Southern and East Africa and was already shipping refined products to Asia from its refinery in Port Arthur, Texas. The two companies realized that an alliance offered both significant opportunities as well as becoming a dynamic force in the industry.
Here in New Zealand, while signage was changed soon after the establishment of the new company, it was not until the early 1940's that our company name was registered under Caltex Oil (NZ) Ltd.
Competition and rationing have little in common so it was not surprising that the New Zealand government decreed that in the event of war breaking out, the oil companies would have to pool their supplies and resources immediately any one company's supply source was threatened. This was exactly what happened, with strict price control and supply measures being enforced by government. For fuel retailers, the war meant a considerable amount of additional bookwork in keeping a record of the rationing stock. It also meant that pumps at retail outlets were painted a uniform grey colour so that there could be no wholesale brand competition, as there was no brand identity. Remember that a significant number of operators still sold fuel from a variety of companies. One-brand operators were in the minority.
The post war era was a period of expansion and growth for New Zealand. It was also a period of strict government control for most aspects of the New Zealand economy. To work within these restrictions (such as road transport legislation), as well as meeting the ever-expanding needs of our customers, Caltex expanded its terminal and inland depot facilities at strategic locations throughout New Zealand. Bulk lube oil blending plants were built at Auckland, Wellington and Lyttelton, with laboratory facilities to provide up to the minute technical services in line with the company's expansion.
Returning to a competitive marketplace took considerable time and it was not until the mid 1950s that business returned to normal. Petrol rationing was discontinued in 1946, although the oil companies made every effort to return to normal trading patterns as soon as the war ended.
Following the pattern of overseas distribution, some oil companies made moves in the early 1950s towards one brand marketing. Oil companies embarked on a campaign to persuade retailers to sell only one brand of fuel, offering a variety of inducements.
Moving to one brand marketing was necessary, given the economies of scale and efficiencies that could be gained in both distribution and marketing. Larger storage tanks could be provided at service stations to allow larger drops of fuel at less frequent intervals. It also meant that accounting records could be simplified because only one petrol truck was needed to make deliveries.
With a number of one-brand sites already in place, Caltex was well ahead of the competition in establishing a network of branded sites.
But one brand marketing wasn't welcomed by all parties. The Retail Motor Trade Association expressed concern and viewed the change as a move by the oil companies to develop "tied houses", with a loss of independence to retailers. In 1953 the government of the day decided to try to curtail wholesale control of interests in the retail sector by introducing the Motor Spirits Distribution Act in 1953. In essence, the Act controlled almost every aspect of the oil industry. Participation, price and profits were all strictly controlled by numerous government agencies.
One such agency was the Motor Spirits Licensing Authority, which controlled the issuing of new licenses for service stations.
In spite of rising costs, petrol effectively stayed at the same price from 1950 until deregulation of the oil industry in 1988. One price existed throughout the country for each grade of petrol, irrespective of the cost of servicing. Competition as we know it today was almost non-existent.
After the war Caltex continued to supply Standard petrol under the Power Chief brand name. At 76 octane, imported newer model cars had difficulty running on the low octane fuel. Changing to a higher octane, however, required government approval, but it was not until 1954 that the then government granted the oil industry the right to raise the octane rating of all fuels from 76 to 79 octane.
Raising the octane, combined with the availability of various ignition control additives on the world market saw Caltex launch its first petrol campaign since the end of world hostilities - the outstandingly successful Boron campaign.
In New Zealand, cars assembled here still had to be fitted with low compression heads. As compression ratios were progressively raised to get more power from existing engine sizes, the need for a premium grade petrol became more pressing.
But offering two grades of petrol to meet the requirements of different engines involved considerable capital investment. Government delayed their approval for as long as possible and it was not until the start of the 1960s that a two-grade market was introduced. As from March 1961 motorists could choose between Caltex Standard 83 and Caltex Premium 93.
 Following the introduction of a two-grade offering, Caltex had additional plans. Project "Texol" was the culmination of many months of work by numerous departments in Caltex. It was a fully planned and integrated marketing campaign that saw Caltex market share rise from 14.5 percent to 17.5 percent over the 12 months since its introduction.
Boron was in fact, on the New Zealand market for two years before it was introduced. It was tested at a selected number of outlets by a taxi fleet and large commercial trucking fleet operation in Wellington. The real identity of the fuel was kept secret by branding the test fuel as Texol.
New Zealand was the first country in which Caltex sold Boron. Fired by its success here, Caltex signed up the rights to sell Boron in practically every Asian and European market. It remained Caltex's 'premium fuel' until it was phased out in favour of Techron in the 1980s. There were further developments in 2000 with the international Caltex launch of Vortex.
The desire to conserve overseas funds spent on petroleum products gave rise to consideration of an oil refinery in New Zealand. After considerable discussions Marsden Point was selected as a suitable site in 1960. By 1964 the refinery was open. Owned by the New Zealand Refining Company, the refinery heralded a new era in the supply of gasoline, diesel fuel, fuel oil and bitumen. Lubricant oils and aviation oils were still imported. Previously all petroleum products had to be imported from overseas refineries. Now the oil industry was able to produce the majority of New Zealand's requirements from a balance of feedstocks supplied by the marketing companies.
Caltex had a 12.5 percent operating interest in the refinery. We were also responsible for bringing the second cargo of crude oil into the refinery on the Caltex Madrid.
During the period 1957 onwards, the pace of change from multibrand service stations to solo marketing was accelerated and the repeal of the Motor Spirits Distribution Act in the late 1980s allowed full competition in the industry. The New Zealand oil industry was about to come of age and Caltex was very much a part of its development.
In 1973 the western world was rocked by what was later to be referred to as the "first OPEC oil shock", when the Organisation of Petroleum Exporting Countries also quadrupled the price of crude oil - from US$2.90 to US$11.65 per barrel. The impact on product prices worldwide resulted in a significant slowdown in demand. In New Zealand, the petrol price increased from the equivalent of 15 cents per litre in 1974 to almost 30 cents. Smaller cars started to replace the big "gas guzzlers", people traveled less and fuel oil and home heating oil slowly started to be replaced by other forms of heating such as gas, electricity and coal again.
If the world thought the first shock was bad, it reeled under the second OPEC oil shock in 1979 when, following the Iranian revolution the price of oil almost trebled following the relative stability since 1973. Prices rose by more than US$35 per barrel and predictions were that they would keep on rising to over $75 by 1990. Many countries took drastic measures - not least New Zealand, whose economy was vitally exposed. "Carless days", car-pooling, the introduction of the 80kph speed restriction, and restricted hours of opening for service stations hit the oil industry hard.
In an effort to curb demand, in particular for petrol, advertising and promotion of fuels was voluntarily curtailed, not really to reappear until the late 1980s. Caltex responded positively by encouraging fuel economy and beginning the drive towards alternative fuels.
The 1980s marked the introduction of alternative fuels to the Caltex network. In February 1981 Caltex announced that we would be marketing CNG, as another fuel source for New Zealand's transport needs. For businesses, incentives to switch to alternative fuels included accelerated depreciation on vehicles, making the changeover cost competitive.
However, the return to relative price stability of the market in the mid 1980s substantially reduced the 'need' for New Zealand to use alternative sources of fuel. The government push to encourage motorists (both commercial and private) to convert their vehicles to CNG or LPG, through both financial assistance and advertising was substantially reduced.
The relative demise of alternative fuels was affected by a number of factors. For commercial vehicle users, from around 1986 onwards, CNG and LPG became less attractive in cost and operating convenience compared with their main rival - diesel. Both diesel and petrol prices fell in real terms during the second half of the 1980s (the fall in diesel prices partly attributed to the removal of excise duty), and this, combined with the upgrade cost needed to install CNG and LPG equipment meant the change-over to these fuels was uneconomic for many businesses.
For private motorists, the removal of financial incentives by Government to convert to CNG or LPG, along with the kilometres required providing a relative payback for the initial upfront cost of conversion put CNG and LPG beyond the average motorist.
 Almost since the beginning of World War Two, and certainly since the early 1950s, the New Zealand oil industry was one of the most regulated in the world. Participation, price and profits were all controlled. New service stations were rare, as the controlling Motor Spirits Licensing Authority issued few licenses. One price existed throughout the country for each grade of petrol, irrespective of the cost of servicing. Competition as we know it today was virtually non-existent, especially during the "post OPEC" moratorium on advertising and promotions which lasted for most of the 1980s.
It wasn't until the mid 1980s that this whole situation changed radically. 1984 was the year that the Labour Government commenced the series of reforms that, taken on by subsequent governments, has led to the vast restructuring and turnaround of the New Zealand economy.
Following much debate, including predictions of dire consequences of profiteering and reduced service, the Government deregulated the oil industry in 1988.
Deregulation has transformed the industry. Compare a typical service station 70 years ago with one of today. The previously small, often crowded and dirty garage, offering a limited range of services apart from fuel and repairs has largely been replaced
 with a modern, spacious, customer friendly facility offering a wide range of goods and services. With the advent of growing consumerism the Shop has taken on an increasingly important part of service station operations, often replacing the corner dairy for convenience item shopping. Star Marts offer a one-stop convenience at competitive prices. The improvements in customer service and convenience have been immense.
In 1999, Caltex in New Zealand led the way again with the opening in Wellington of the first ever "stand-alone" Star Mart. These Star Marts are not located on a Caltex forecourt with fuel pumps, but instead positioned in metropolitan areas to provide service to inner-city apartment dwellers. The concept has been hugely successful for Caltex. At the beginning of 2006 there were 20 stand-alone Star Marts dotted in main centres throughout the country.
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