Shame didn't lower fuel prices

Shame didn't lower fuel prices

For 45 years, various governments have been trying to bring motorway fuel prices under control.

The thorny subject goes against government policy, which has always been to avoid regulating the industry (and over time they have become increasingly hands-off). But motorway fuel pricing has always been a cause for complaint, and politicians can't help but get involved when they think some PR is available.

For many years their solution was to require service stations to display a sample fuel price on the motorway signs. The problem was somebody had to update it, and with 1980s technology that meant asking a junior member of staff to walk half a mile down the motorway with a stepladder and some giant numbers.

Today you'd just say the job could be done with an electronic screen, but even as recently as 2005 it was difficult to find a source of power for those. And the operators had wriggled out of the idea by then.

Motorway petrol station.
Motorway petrol stations have always been unhappy places.

The theory seemed to be that if only there was a way to force service stations to promote their fuel prices, they would feel obliged to reduce them. You would call that competition, but there was never really any competing going on. Instead what you really needed was a sense of shame.

In 2013, the government proudly announced their revolutionary idea of having road signs that compare the price by fuel at three different motorway service areas. If two of them were cheaper than one other, that third one would feel compelled to lower their prices.

What happened next was totally predictable - every service station featured started charging the same price, and not a reasonable one. There was no completion. They may as well have been competing to be the most expensive for all the good that did.

It seemed there was nothing the government could do to help - until they stopped doing anything.

In 2019, Irish motorway operator Applegreen entered the British mainland motorway market by purchasing a significant stake of Welcome Break. Applegreen's philosophy is unlike anything seen on British motorways: they sell cheap fuel (including stunts where it gets as cheap as 24.7 cent per litre). This gets people in the door, and Applegreen then rely on what's in the shop to make them a profit.

British motorway operators were well aware of this theory, but had always shrugged it off. They didn't need any more people in their petrol station doors. But when Applegreen barged in and did it anyway, the other operators had to react.

So, Applegreen are introducing a new commitment to Welcome Break: "lowest motorway fuel prices". Strictly speaking this doesn't mean "cheap" - in Britain when we think of "cheap fuel" we normally think of supermarkets, but British supermarkets are aggressively competitive and no motorway site (in Britain or in Ireland) could compete with them. No, the wording is very precise. It is at least cheaper.

Applegreen motorway sign.
Applegreen proudly display their motorway fuel prices.

Soon after, Moto announced that they were reviewing their fuel prices. As part of a trial which could be rolled out nationwide, they have committed to competing with local (non-supermarket) petrol stations and offering a price that is significantly lower than their current offering.

Moto have even asked the government if they can display their new fuel prices on the motorway signs. They are actually begging to promote their prices, whereas they once shamefully covered them up.

Between them, Moto and Welcome Break control the majority of motorway petrol stations. (The remaining ones are generally owned by companies who don't specialise in motorways, like Shell and Euro Garages.)

It's early days yet, but the intentions of both companies appears to be great news for consumers. Welcome Break is under new management so you should expect some new ideas, while it would be unfair to assume Moto are purely trailing - they are under a new CEO who seems to be steering the company towards a more positive reputation.

We can only hope that both companies will conclude that this new approach is good news for everybody.

Within the space of a few months the industry's biggest problem may have been fixed - and it didn't need any authority to do anything.

 
Tedious about the author bit

Travel historian, presenter, producer. I love the places people pass through along their journey.

I research and write about how our need to get around continues to shape our world through roads, railways, airports and whole new towns.

My thoughts and/or research have been published by the likes of Truck & Driver, BBC local radio, Daily Express, The Guardian, Mail Online and The Independent (detail).

I can't tell you how many toll booths I've been through. But it's a lot of toll booths.

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Any similarities with real-life events or wealthy international firms is probably coincidental. No products endorsed. I'm powered by Monster Munch.

© 2020 Johnathan Randall.