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Surge pricing to ‘blow smoke screen’ over true cost of fuel

By / 4 years ago / Latest News / 1 Comment

A move amongst supermarkets to introduce Uber-style ‘surge pricing’ at forecourts as well as instore could ‘blow a smokescreen’ over fuel prices and impact on fleets.

Supermarkets are looking at introducing new technology that could enable ‘e-pricing’ of goods to change in line with demand.

According to reports, supermarkets such as Morrisons, Tesco and Sainsbury’s are looking at introducing new technology that could enable ‘e-pricing’ of goods to change in line with demand.

Already seen in some parts of Europe as well as the US, this could see things like ice cream as well as fuel priced higher in times of demand and has caused consternation among motoring and fuel groups, with Howard Cox, founder of the FairFuelUK campaign, saying: “The murky world of pump pricing will be made even more opaque when oil price fluctuations will have even less relevance when filling up. Hard working motorists and small businesses continue to be exploited by the opportunistic fuel supply chain.

“Now they can site demand to hike prices without any consideration of fairness. That’s why it’s imperative for the new Government to introduce PumpWatch to stop the perennial fleecing of 37m UK drivers.”

The RAC’s fuel spokesman Simon Williams also said that technology will leave a bad taste in the mouth of motorists and will be seen as a cynical way to increase prices by stealth, adding: “We closely monitor daily fuel prices to increase transparency and to encourage supermarkets and retailers to play fair with motorists. However if they are able to increase the price during the course of a day then it blows a smokescreen over the true cost of fuel.”

Williams also pointed out that it seems odd that the supermarkets who command high volume sales and claim to operate on low margins would chose to manipulate prices in such a way at the risk of alienating customers.

Yet Paul Hollick, managing director of TMC and chair of the Institute of Car Fleet Management, highlighted that retailers have been adjusting prices in response to data signals for many years and added the advent of predictive pricing would see savvy drivers quickly work out when petrol stations are likely to be at their busiest and avoid those times.

Hollick also said that fleets can use Big Data to their advantage too, with technology such as TMC’s consolidated fuel and mileage data able highlight areas where surge pricing is prevalent, for example, and identify whether or not drivers make the effort to avoid peak times for filling up.

He commented: “Surge pricing is designed to capitalise on particular behaviour patterns by raising prices. Fleets will adopt tools that allow them monitor time-based pricing patterns and take steps to encourage their drivers to buy when prices are lower.”

Hollick added: “A final point. Since low-cost fuel is a key part of a supermarkets’ marketing, in reality we’re likely to see their fuel prices moving in a limited range.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006.