Avoiding price gouging and validating your decisions
Fuel retailers around the world are feeling the pressure of rising geopolitical tensions, rising fuel prices, and rising discontent from consumers.
Fuel prices are reaching new highs, and a high level of uncertainty, mixed with varying attempts to rectify the fuel price situation has led to dramatic fluctuations in oil costs and volatility in fuel pricing.
We have seen the number of price changes sent daily from our systems double in the past few weeks. And are seeing first-hand the ways different fuel retailers are managing the current situation.
While fuel retailers have no control over the impacting external factors, there are some steps you can take to protect yourself and your brand during these challenging times. Here we discuss the impact of price gouging, the impact of price gouging accusations, and safeguarding measures you can take.
Avoid price gouging — and validate your decisions
Most fuel retailers are committed to fairly representing prices changes at the pumps. Price gouging is both heavily investigated and heavily reported. And in many countries, it’s heavily penalized.
The volatility of the current situation, combined with the global cost of living increases, brings the issue of price gouging to the forefront of people’s minds. It’s likely that more accusations will be made as consumers feel the pinch of economic changes and is something that many authorities will be closely monitoring.
In Germany, the Economy Ministry and Federal Cartel Office have warned fuel retailers that they’re watching out for price gouging and will take action if organizations are found to be unfairly profiting from the current situation.
Unreasonably profiting from global instability is not advised and will damage the value of your brand in the long run. But during times of such volatility, prices changes, and price rises are unavoidable. You need to assess the market and be aware of what could appear to be price gouging or opportunistic pricing.
Ultimately, you need data and a consistent set of rules to ensure your strategy stands up to scrutiny.
Ensure that you have consistent data to justify your fuel pricing decisions and any investigations into price gouging activity.
You should have a consistent set of rules that help you to derive your final fuel prices, and an auditable log of how those decisions are made.
While volatility often leads to incremental strategy changes, the data you hold and the rationale that is used to generate fuel prices are the key to validating your decisions.
Regardless of the system you use to generate your fuel prices, your consistent data, validation rules, and an auditable decision-making process, will enable you to justify your pricing decisions and prove that they are driven by data.
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