Touch Of A Button Can Win Battle Of The Bowser
Sydney Morning Herald
Thursday August 24, 2000
Perched in front of a computer screen in Sydney's MLC Building, high above the corner of King and Castlereagh streets, is a man too shy to be named or photographed. He is the NSW prices manager for Caltex, and with the push of a button, he can help send petrol prices soaring or tumbling.
On his screen is a flood of statistics, updated and crunched every two hours, detailing retail petrol prices across the State.
The data pours in from Informed Sources, a Brisbane company that has been monitoring petrol prices for 13 years, and now sells the advice hourly to three of the four leading oil companies.
The managing director of Informed Sources, Mr Alan Cadd, said he had about 50 motorists on the road, constantly logging prices at 4,000 service stations into computers in their cars.
A Caltex spokesman, Mr Richard Beattie, said the monitoring company was also fed with petrol prices automatically transmitted from service stations whenever motorists bought fuel using petrol cards.
Mr Cadd said the oil companies were ``watching so closely that any movement will be picked up and moved upon within an hour".
Informed Sources observers said the highest price for unleaded petrol in Sydney at noon yesterday was 100.9 cents. The lowest was 92.9 cents, while the most common price was 99.9 cents found at about half of all Sydney service stations.
Caltex divides the State into 112 ``marketing areas" 63 in Sydney, 26 in regional areas and 23 in country NSW. ``Each region might have three or four Caltex or Ampol stations," said Mr Beattie, explaining how sudden petrol price changes happened.
When his screen shows opposition garages are changing prices, the pricing manager acts. If the opposition slashes prices, he has the power to hit the button, sending an electronic message to all the Caltex-Ampol outlets in the region, advising that the oil company is discounting its wholesale price.
If opponents' prices soar, he can reduce the discount, almost inevitably sending up pump prices.
Mr Beattie emphasised that Caltex did not set retail prices. ``It's up to the dealer to say what retail price is set. The typical retail margin is 2.5 cents. Some dealers go below that to maximise their volume sales.
``It is a constant dance to try to make money in this business by getting the right balance between price and volume."
But service stations the Herald spoke to said small margins and competition meant pump prices had to reflect changing wholesale prices.
``They send me a price and we move," said one dealer in Sydney's south-west.
© 2000 Sydney Morning Herald
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