More and more I am asked to explain the seemingly irrational fuel pricing in our region. At this stage I have not had the opportunity to sit with representatives of the fuel companies and get direct insight into just how their pricing policy/equation actually works. Obviously, the net result for these companies is to maximise profit per litre, but is it ethical for same to bamboozle us into having no idea as to what the ‘real’price should be.

Not so long ago a senior executive (of the then Telecom) by the name of Theresa Gattung was censured for the operation of a similarly confusing pricing regime, with serious consequences. To date very little pressure has been directed to the management of the oil companies, this seems more than a little unfair. Do we really have to wait another year and spend $1.5 million tax payer dollars to get to the bottom of this?

This is how I believe it works:

  1. Widely varying pricing is applied across the country, the model takes into account projected litreage throughput per outlet (the companies have already calculated a price based on actual costs, but want more)
  2. Their system monitors uptake per gas station and sensitivity to the pricing applied at each POS, this allows real-time feedback of what customers at that location are prepared to pay.
  3. Variations in ‘standard’ pricing are further entered via discount partners and one day boost programmes (6cent and 10 cent discount days) which skew normal sales volumes and affect the geo aspects of normal purchase patterns. The majority of POS also have a normal discount available to card holders, but are effectively available to all customers (more math for us to consider when trying to understand what the price actually is)!! Regional fuel taxes, although perhaps a necessary evil, have further muddied the waters.

The net result is the desensitisation and deliberate confusing of the Community. Not cricket. These companies are already amongst the most profitable in the World, do they have to resort to this subtle fraud?! Should they be allowed to?

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