Locked & Loaded – But Caught Red-Handed

Ever considered having an application on your smartphone that lets you lock the fuel prices (lowest rate) and fill fuel at the same rate anytime? This is exactly what most of the gas stations like 7 Eleven, Caltex, BP etc. are doing by introducing fuel applications, which allow you to browse the fuel rates throughout the day and allows you to lock in the rate that you feel is the lowest.

7 Eleven Fuel App

7 Eleven Fuel App

But it seems like the ACCC (Australian Competition and Consumer Commission) are not too happy with the move of fuel retailers and have filed proceedings against them and the Informed Sources Pvt Ltd (Australia) for breaching the section 45 of Competition and Consumer Act 2010. According to ACCC, information sharing of fuel prices among the fuel retailers affect the competition of sale of fuel in cities like Melbourne. Due to this reason, most of the consumers did not prefer to use the fuel applications. But since December 2015, after ACCC relaxed the rules of Information sharing among the fuel retailers and consumers, the fuel applications became a huge hit and are frequently used by motorists on a daily basis.

 

ACCC’s ideology was that if they allow fuel prices to be shared among the consumers through the retailers, the consumers will be able to take informed decisions about buying fuel at the cheapest price. This eventually helps the fuel retailers to have healthy competition among themselves.

 

The consumers began to use the fuel application on a day to day basis which helped them to monitor fuel prices among different fuel retailers and lock in the rate which they feel is the lowest. This allowed them to fill fuel in the rate that they have locked for a stipulated period of time depending on the fuel provider.

The electronic advertising sign outside the service station on Monday morning showing unleaded petrol at 123.7 cents per litre for customers with a discount, the same price as the supermarket chain’s rival Costco.

The electronic advertising sign outside the service station on Monday morning showing unleaded petrol at 123.7 cents per litre for customers with a discount, the same price as the supermarket chain’s rival Costco.

Though this application was trending among the consumers, their trust was later broken when they found out that some fuel providers were misleading them by not showing fuel prices of the stores which are close to competitors fuel stations who were selling fuel at a much cheaper rate. Woolworths, being one of the classic example, failed to show the fuel price of a fuel store in Majura Park whose price was matching with a nearby Costco fuel station. The fuel application showed the prices of some stores and skipped showing the prices of few stores which had lower fuel prices than the other. The reason was to generate more revenue which was later noticed by some consumers. The consumers could only be aware of this if they drove by past those gas stations. This ultimately affected the trust among the customers for using the application.

The Fuel App phenomenon in Australia presents an intriguing case of complications in studying consumer behaviour. While 7-Eleven and other major conglomerates would have invested millions of dollars in creating study groups and conducting surveys prior the application release, it becomes imperative in modern times to think about other extrinsic factors that can contribute to the success of a ‘release’ from a company. Will the existing ‘textbook’ knowledge on consumer behaviour suffice or should the laws be tweaked for better customer perception?

 

References

Australian Competition and Consumer Commission. (2014). ACCC takes action against Informed Sources and petrol retailers for price information sharing. [online] Available at: https://www.accc.gov.au/media-release/accc-takes-action-against-informed-sources-and-petrol-retailers-for-price-information-sharing [Accessed 18 Mar. 2016].

Colley, C. (2014). Woolworths ‘misleads’ customers with phone app petrol prices as Costco price war continues. [online] The Sydney Morning Herald. Available at: http://www.smh.com.au/digital-life/smartphone-apps/woolworths-misleads-customers-with-phone-app-petrol-prices-as-costco-price-war-continues-20141215-127h2c.html [Accessed 17 Mar. 2016].

NewsComAu. (2016). Cheaper petrol just a click away with new smartphone app. [online] Available at: http://www.news.com.au/finance/cheaper-petrol-just-a-click-away-with-new-smartphone-app/story-e6frfm1i-1226882898130 [Accessed 17 Mar. 2016].

Sourced, E. (2015). Woolworths able to keep using cheap fuel app and website after ACCC decision – ACAPMAg – The voice of Petrol Convenience. [online] ACAPMAg – The voice of Petrol Convenience. Available at: http://acapmag.com.au/2015/12/woolworths-able-to-keep-using-cheap-fuel-app-and-website-after-accc-decision/ [Accessed 18 Mar. 2016].

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3 thoughts on “Locked & Loaded – But Caught Red-Handed

  1. Interesting article! I’ve always wondered about those apps and if they were worth getting but sounds like they might be misleading.

    Like

  2. A very interesting topic and one of the best application introduced in recent times. In my view, the existing text book knowledge is enough, if the companies maintain their trust standard with the consumers.

    Like

  3. well while speaking about 7 eleven fuel app. basically it is uses ur mobile GPS and gives u the best rate possible near to your location. now while i tapped for best price near Weribee though the BP fuel station which is selling at a better rate than 7 eleven , it still gave me the price. so i don’t think so they can access other fuel stations prices.

    Like

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