Fuel card users shop around

USERS of fuel loyalty schemes are pricesensitive and shop around to ensure they are getting the best deals available to them, the Commerce Commission heard yesterday.

While the AA Smartfuel scheme has about 2.6 million members, only about one million are active each month and they tend to come and go, depending on other offers that are available, managing director Scott Fitchett told the commission.

He said most members probably had cards for other schemes and would use them.

‘‘They engage in and out all the time. It is very fickle,’’ he told a public hearing looking at competition in the fuel market.

AA Smartfuel offers price discounts at BP and GAS outlets. Caltex was previously a partner until August when it joined the expanded Pump loyalty scheme of parent company Z Energy.

Mr Fitchett told the commission that programme members typically build up their fuel discounts through the other nonfuel firms participating in the scheme.

‘‘A lot of people using our programmes are conscious of the price of fuel. They are not stupid. They look around. They know where the cheaper sites are, they know the better days to buy,’’ he said.

‘‘They are very pricesavvy.’’ The Commerce Commission is testing the level of competition in the retail markets for petrol and diesel.

In a draft report in August, the commission said it was concerned the industry might be earning excess returns at a cost to consumers and suggested changes might be needed in the wholesale market to improve competition.

But it also questioned whether the growth of loyalty schemes and the discounts available were a poor substitute for more active price competition and whether greater standardisation of price board advertising was needed.

Earlier this month, the Australian Competition and Consumer Commission raised concerns about the customer data being gathered by retail loyalty schemes there and whether consumers have any control of its use.

About 30 executives from the fuel industry and related industry or consumer groups are attending the twoday public hearing the commission is hosting in Wellington.

Mobil executives are present but not participating.

BP New Zealand managing director Debi Boffa said loyalty schemes are important in understanding how customers are using the broad range of products its chain offers, from fuel to coffee, shopping and car washes and making differentiated offers to them.

But price remains a key factor and loyalty scheme members still ‘‘shop around’’. If a site is 1 or 2c out of the market on fuel ‘‘we will lose volume’’, she said.

‘‘Active participation does not mean exclusive participation.’’

That theme was repeated by all the retailers present.

Waitomo Group operations manager Simon Parham noted that while his firm’s unmanned sites are ideal for motorists wanting a fast and simple fill, those same customers might go to BP if they felt like a coffee or to a Z Energy outlet if they also wanted a pie. — BusinessDesk