Thursday, June 3rd, 2010

Woolworths Petrol – Price Increase by Stealth

It used to be possible to get petrol slightly cheaper from Woolworths petrol stations by using a 4 cent discount card. You’d be credited with one fuel purchase at that discount every time you spent more than a certain amount in the supermarket. NOT ANY MORE.

You never used to get the full 4 cent saving because there are always other service stations around offering petrol one or two cents cheaper than Woolworths (lets disregard the E10 fuel since it gives you 10% less kilometres per litre and so you have to add 11% to the price to give a proper price comparison making the standard unleaded the cheaper option).

Before the recent Woolworths change the comparison was quite simple. To buy say 30 litres of fuel elsewhere at say 121.9 would cost $36.57 while to buy from Woolworths at 122.9 less the 4 cent discount would cost $35.67, a 90 cent saving. When the Woolworths petrol station on my direct route stopped offering standard unleaded last year I started going 1/2 kilometre out of my way to visit another Woolworths petrol station.(reducing the saving to 83 cents).

Woolworths have now decided to stop accepting credit card payments at all. Now given that the bank charges me $1.00 more for direct debit transactions to what it does for credit card transactions I never use direct debit since credit card is always cheaper for anything under $100 (even where the supplier passes on the 1% Visa transaction fee). In fact it is so long since I did make a direct debit purchase using the card that I have forgotten the PIN needed to do so (and since I rarely make purchases over $100 have no reason for getting it reset).

So Woolworths having dropped accepting credit card payments completely means I can no longer buy fuel there at all. I wouldn’t want to anyway since even with their 4 cent discount their fuel now works out to be 13 cents dearer for 30 litres than it can be bought elsewhere at the standard price (without my having to go out of my way to get it). Even if all the other service stations start passing on the fee for using a credit card it still works out only 23.8 cents dearer to buy my30 litres petrol from somewhere that accepts Visa than it does to buy it from Woolworths with their 4 cent discount. Of course that’s assuming that other places are only one cent per litre cheaper than Woolworths. Often there are some that are two cents cheaper and then even with paying the fee for using a credit card the other petrol station would then be 6.2 cents cheaper than Woolworths wsith their 4 cent discount.

Conclusion – with dropping support for credit card while still keeping their petrol prices higher than elsewhere Woolworths have removed any reason for using their petrol stations. Note also that these calculations do not take into account the additional bank charges on the Woolworths grocery purchases that get you the 4 cent discount in the first place and once that is taken into account the 4 cent fuel discount is more than negated by the extra bank charges on buying from Woolworths in the first place unless theiy actually do reduce all their prices by 1% and since they haven’t reduced their petrol price at all it is unlikely that there will be any reduction in the price of groceries either. Best off to stay away from Woolworths completely.

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