How will gas prices threaten summer road trips?

Anyone who operates a fuel retail site knows consumers are increasingly concerned about the volatility of today’s fuel prices. Before the conflict began in late February of this year, the price at the pump in Canada ranged from $1.21 to $1.32 per litre. When the conflict escalated and the Strait of Hormuz was shut down, prices spiked to between $1.50 and $1.68 per litre across the country. Roughly 20% of the world’s oil supply—crucial for refining transportation fuels for vehicles and airliners—moves through the Strait. 

By mid‑April, as the conflict continued and the Strait of Hormuz remained effectively closed to all shipping, prices in Canada were averaging around $1.81 per litre. In May, some fuel retailers were posting prices just over $1.91 per litre. Analysts predicted if the Strait remained closed, Canadians heading into the summer months could see gasoline prices reach $2 per litre or more. As of this week, U.S. President Donald Trump says the Straight is open, but ships aren't moving and there's still an incredible amount of volatility and uncertainty. 

This has prompted many Canadians to cut back on driving and rethink summer travel plans—for example, reducing trips to the cottage to save on fuel costs. This shift poses a challenge for fuel retailers trying to keep customers coming to their pumps, especially as more consumers turn to apps and online sources to find the lowest fuel prices available, further straining customer loyalty.

Some will argue that little can be done. Fuel prices are driven by the global oil market. As much as some may want refiners to lower the price of gasoline or jet fuel, the crude oil required to produce them is set by the global market price for oil. With that market now disrupted and highly volatile, high gasoline prices simply reflect that volatility and supply chain disruption. Consumers are responding by seeking every viable way to reduce their fuel spend as they try to manage household budgets already hit by increasing prices for everyday goods and services.

To manage this new reality, fuel retailers will need to lean even more heavily on their loyalty programs. This requires a deeper understanding of customer purchasing patterns and tying offers and incentives to those patterns in more meaningful ways. A simple fuel discount is no longer enough to draw a customer to the pump. Three cents off per litre may have worked in the past, but with consumers actively searching for the lowest posted price—and willing to travel farther to get it—that discount may no longer be compelling.

I know several people who check fuel‑price apps daily, sometimes multiple times a day, to find the lowest price for gasoline. They will go out of their way to fill up where they can save five or even 10 cents per litre. Why settle for saving three cents when a better deal is available across town?

To attract these consumers, loyalty programs must go beyond fuel discounts and instead connect fuel offers to broader purchasing habits.

If a customer stops for fuel, link that visit to discounts or specials in the convenience store or car wash. Better yet, tailor offers to a customer’s unique buying habits and push those offers through an app before they arrive. While they are fuelling up, provide additional incentives—such as an extra fuel discount applied at the pump for loyal customers, or a free food item or car wash.

This should not be hard to do. Today’s technologies will let fuel retailers and their convenience stores and car wash operations tailor offers in real time and get those offers out even ahead of price increase at the pumps. Loyalty programs should not be seen as simply a means of delivering an offer, but a real-time communications system that understands the customer and communicates offers, savings and services that meet their needs and the challenges they are facing in the economic times ahead.

This approach acknowledges and rewards their ongoing commitment to your brand. It helps keep customers returning, even when fuel prices remain beyond anyone’s control in the months ahead.