May 26, 2017
Major British supermarkets are in late stages of talks about an overhaul of British fuel prices, with van drivers set to see a change in fuel prices depending on what time they go to fill up their tanks!
Van drivers will have to pay more for fuel on busy periods such as bank holidays and during the school run, under new supermarket collaboration with Danish firm a21 systems. Major British supermarkets are in late stage talks with a21 about installing a computer algorithm which could see fuel prices alter numerous times over the course of a day.
The cost of fuel could rise or fall by up to 2 pence a litre depending solely on demand, with these changes occurring up to ten times a day. Van drivers will get no notice of when the price of fuel is going to change, however the likelihood is that fuel prices will be increased during the working day and decreased at night.
The technology is already being exploited at a huge amount of companies across USA and Europe, where fuel prices frequently change between four and ten times per day. The technology uses and algorithm thought to be modelled on the brain, using various databases of customer data to pre-empt how customers and competitors will behave. If the algorithm realises that the particular supermarket is having a quiet spell, fuel prices may drop to encourage customers through the door. On the flip side; if an increased number of customers are purchasing fuel (for example during a hot summer day or during the school run), the prices may be increased.
Currently fuel prices are based more on competitors rather than their customers (van drivers), this will alert supermarkets using data on their own customers and as a result demand is expected to even out and experience less time of peaks and troughs. These changes come after the Government experimented with electronic fuel pricing signs along the M5 motorway, to encourage fuel pricing competition. 12 months on, the result of these signs appears to have been limited, as prices at pumps with the signs appear to have higher prices than those without.
It remains to be seen how van drivers will react to these dynamic changes in fuel prices. Some pumps have been manually adjusting prices at busy weekend periods, however this technology will allow for real-time price changes. Leader of a21’s UK operations Martin McTague believes that this technology could save fleets thousands of pounds a year by enabling them to purchase fuel at the cheapest times. The technology may be installed at major supermarkets (although McTague will not name who) within months!
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