The founder of a data analytics business that has worked with the fuel-retailing sector for 38 years has warned the introduction of Fuel Finder could cause “volatile pricing” for petrol and diesel in the UK.
Speaking exclusively to Forecourt Trader, Alan Cadd, founder of Informed Sources, says that mandatory price reporting can lead to a number of unintended consequences, highlighting that similar schemes in Germany and Australia have contributed to unusual pricing practices.
“In its extreme form, in Germany, they have 35 price changes per day, and it annoys the hell out of motorists”, Cadd says. ”People do these things with the best of intentions and can still end up with 35 price changes a day,” he warns.
While cautioning that Germany’s unusual situation is also the result of “structural, deep-seated issues that go back to 1999”, he details that pricing in Australia has been significantly affected by mandatory reporting, where large and middle-sized forecourt firms can be “sharp” on price, but smaller outfits often struggle to remain competitive.
Another “known phenomenon” is that garages will “post their price in the morning and tell the government, but then in the evening they will drop the pole-sign price to pull in the go-home traffic, and not report that change so the big out-of-town sites don’t chase them on price.
“If something similar happens here, how many motorists are going to be ringing up the Competition and Markets Authority and tell them that a site is selling fuel below its reported price?”
Cadd is also concerned about the effect Fuel Finder will have on rural filling stations, where pump prices are often high due to factors such as higher delivery charges and lower fuel volumes.
“Smaller forecourts in villages are often community hubs, where staff do things like check the tyres for older drivers. But they will be forced to publish their prices, and because they’re often not the cheapest, they’ll be seen as pariahs.”
Cadd is still of the opinion that Fuel Finder may be a net positive, however: “I’m a data guy, and ultimately believe in the power of data. It can be beneficial to motorists, as once they know there’s a cheaper price out there they will shop for it. Motorists can save money and that’s a positive.”
He notes though that fuel prices may not come down on average, which may mean the majority of drivers don’t benefit as “most people are time-poor, and don’t have the time to review prices before they fill up”.
Cadd also has reservations about the design of Fuel Finder software, noting, for example, that the database field where retailers enter pricing figures is set as a ‘string’ format, rather than a ‘number’ one.
“For prices they should have a number format, but they have a string one instead. So retailers can enter an exclamation mark or an ampersand if they mis-key when entering prices manually,” he notes.
Another issue is that responsibility for populating Fuel Finder is placed with retailers, leading to some sites entering their latitude and longitude the wrong way round, meaning “some sites appear to be located in the middle of the ocean”.
Cadd is of the opinion that “Fuel Finder isn’t a computing problem – it’s got to be one of the easiest computing problems in the world to solve. It’s an industry-knowledge problem, and the people who won the tender won it based on their computing prowess.”
The firm has developed its own fuel-price comparison site for drivers called Motormouth, and also has a software solution to help forecourts register with Fuel Finder correctly, and update price changes in a timely and straightforward fashion.
