Product quality and customer relations

LUKOIL Group entities produce a wide range of products for various industries and vehicle owners in Russia, Europe, Asia, and the Americas. Our priorities are focusing on customer expectations, developing and launching new products with enhanced operational and environmental properties, and continually improving quality management approaches. We make great efforts to get feedback from our clients on the quality of our products and related services. LUKOIL filling stations have a loyalty program for customers.

Sales of fuel products and lubricants
Type of product 2017 2018 2019
ECTO brand fuel, thousand tonnes 8,554 9,603 9,022
Bunker fuel, thousand tonnes 4,539 4,742 4,269
Aviation bunker fuel, thousand tonnes 3,238 3,198 3,357
Branded oils (premium group), thousand tonnes 270 258 254
Biofuel blends*, million liters 4,174 6,515 7,093

Note. *Allowing for a motor gasoline density of 0.755 kg/L and a diesel fuel density of 0.845 kg/L. Biofuel blends are blends of motor gasolines and ethanol (up to 10%) or diesel fuel and fatty acid methyl esters. These products are sold in European countries. (The largest volumes, in excess of 1,000 million liters, are sold in Belgium, Romania, Bulgaria, and Turkey).

Manufacturing and selling products with enhanced properties

LUKOIL-branded products have enhanced properties that enable lower fuel consumption and reduce the content of hazardous substances in exhaust gases. The use of new and innovative products fosters improvements in safety and reduces negative environmental impacts on the customer side.

Share of products with enhanced properties, %
2018 2019
Share of ECTO branded fuels (motor gasoline and diesel) in total retail sales of petroleum products in Russia and abroad 63 64
Share of environmentally safe marine fuel in total sales of bunker fuel 23 23
Share of energy efficient lubricantsOils with low high-temperature viscosity values (less than or equal to XXW-30) from light and heavy-duty product lines. in total production of lubricants (PVL + CVL)* 8 10

Note. *The method of calculating the indicator (PVL+CVL) has been revised: only branded oils with a viscosity grade of less than or equal to XXW-30 are taken into account; 2018 data has been updated.

Production of energy efficient lubricants

Our priority in developing production of oils and lubricants is to create innovative products for promising new types of equipment and machinery, as well as highly effective specialized products for various industry sectors.

LLK-International develops and supplies low-viscosity Genesis FE (Fuel Economy) oils to consumers in various countries. These oils help reduce fuel consumption by internal combustion engines and boost energy efficiency.

We also produce environmentally friendly oils. Biodegradable products under the BIO brand (BIOLUBE, BIOCHAIN, and BIOFLUIDE) are supplied to the European market. Over time these oils degrade into components that, unlike the case with synthetic oils, do not harm the environment.

Quality management

The Company adopts an integrated approach to quality management at all stages of the product life cycle, from production to consumer. We apply unified quality management approaches both in Russia and abroad.

The quality management systems of nine entities operating in the aircraft bunkering sector in Russia and abroad, as well as all LLK-International facilities producing oils and liquid lubricants, are certified under ISO 001:2015 with respective certificates.

Ensuring the quality of motor fuels

Our goal is to perform comprehensive and real-time monitoring of the delivery and acceptance of oil products, both to and from Transneft and Russian Railways transportation systems, and to ensure their proper acceptance, storage, and sale at LUKOIL bulk plants and fuel stations.

Our corporate automated management system, which covers all filling stations and most bulk plants in Russia and is installed at facilities in Serbia and Romania, allows oil product flows to be electronically tracked from refinery to end user. The Guaranteed Oil Product Delivery system reduces product transportation time, as well as the number of improper uses and product losses incidents. The electronic sealing of road tankers helps reduce the rate of injuries among filling station personnel, as it eliminates dangerous work at heights.

Distribution of LUKOIL Group filling stations among countries, as of December 31 each year
2017 2018 2019
Total 5,258 5,168 5,044
Russia 2,609 2,556 2,469
Abroad 2,649 2,612 2,575

Note. Data include LUKOIL Group’s owned, leased, and franchised filling stations, as well as suspended and leased filling stations (as of 31 December 2019). Changes in the performance dynamics of Russian companies supplying oil products are mainly due to a reorganization of the sales network in 2018–2019.

Ensuring the quality of oils and lubricants

K-International, as it is during such audits that product quality and production efficiency are evaluated.Audits of LUKOIL production sites by customers which are leading car manufacturers (Daimler, General Motors, Ford, Volkswagen, Renault-Nissan-Mitsubishi, etc.) are an effective quality control method and customer relations tool for LLK-International, as it is during such audits that product quality and production efficiency are evaluated.

We impose similar requirements on suppliers of raw materials, additives, and supplementary materials. All suppliers are assessed against the applicable corporate standardSP LLK 11-2016 “Procedure for Assessing Suppliers of Materials and Services.”, and LUKOIL Group entities perform audits of suppliers.

By 2022 LLK-International plans to upgrade its capacities at principal sites in Perm and Volgograd in order to accelerate a transition to manufacturing small-tonnage batches, which will reduce the resource intensity of production processes.

Customer relations are covered by the SP LLK 08-2015 standard “The Procedure for Handling Customer Claims and Complaints.” Customers are sent Product Satisfaction Questionnaires three times a year in order to gauge their satisfaction levels. The average consumer satisfaction level is defined as the ratio of positive responses in questionnaires to the total number of completed questionnaires.

Average satisfaction level of oil and lubricant consumers, % of those satisfied with product quality
Average satisfaction level of oil and lubricant consumers, % of those satisfied with product quality

Relations with filling station customers

We maintain constant contact with the retail customers of our filling stations and analyze feedback from them in order to improve the quality of services as well as the satisfaction level with our products and services. The main methods of customer interaction are surveys and analyses of client requests and proposals received via the Unified Hotline directly at filling stations and through social networks. LLC LICARD’s Big Data analytics tools facilitate customer segmentation, which in turn facilitates more accurate feedback.

Feedback is used to improve the work of regional managers at filling stations: every month their performance is benchmarked against criteria that take into account requests and complaints received via a Unified Hotline, as well as the rating received in the Mobile Application.

After the launch of the new “Fill up with profit” loyalty program in 2019, the number of calls from individual clients to the Unified Hotline rose by 30%, due mainly to requests to update personal data. This means that customers demonstrated significant interest in the new program and were enthusiastic about participating in it. To maintain the quality of services at the time of the program launch, additional operators were hired (new employees were trained prior to its launch), a new call center site was opened, and information materials were prepared.

An analysis of calls from clients to the Unified Hotline in 2019 demonstrated greater satisfaction with fuel quality and that issues previously cited by clients as problematic had also been successfully resolved.

Thanks to systematization and new channels of communication with clients about advertising campaigns, the number of informational requests related to promotions terms saw an almost fourfold decrease. To boost the effectiveness of information campaigns, regional segmentation has been tested since 2019: clients in a specific region receive messages about campaigns launched in relevant territories. Work is carried out with specific groups of clients to resolve local issues.

The customer relations system we have developed helps us boost overall operational efficiency and create a welcoming environment at filling stations.