How to offer Index pricing to your customers

What is index-based pricing? 

Index-based pricing was developed to accommodate and better serve market participants like distributors and fleet customers. Index structures allow you to offer your customers index pricing based on a period's off-platform index (any major pricing feed) plus the merchants' predetermined charges, which are referred to as an offset.

Important points to keep in mind when using index pricing include:

  • No dollar amount is tied to the reserved gallons when the customer initially books the reservation.
  • To arrive at a final index price, index pricing adds a supplier-defined offset on top of the off-platform index. Offsets are visible to customers.
  • When establishing your index price (via a new structure with source set to Index), naming the off-platform index on which you're basing the price is optional. If specified, the named index will be visible to your customers when shopping for fuel and in the Activity manager.
  • Index structures support firm and indicative prices.

When is the price set?

A final price for the reserved fuel is applied when fuel is picked up by or from the fuel supplier. The dollar amount applied to the gallons will equal to the specified index's current value plus the merchant-defined offset.

How to set up index-based pricing for your customers

To offer your customers index-based prices, navigate to the Structures manager. Here, create and name a new structure. Make the required selections and then, under Price Details, from the Source dropdown, select Index.

The Index field will then appear. If you would like to specify which index the price will be based on, enter it here. In this example, the index our price is being on is "Example index." Entering an index name is optional and not required.

Note: Entries in this field will be visible to your customers when shopping for fuel.

Next, enter your offset. This offset can be used to cover your margin requirements or other costs. Offset is also visible to your customers when shopping for fuel.

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Next, select when you would like the price to be active and for which periods index prices will be offered by checking each of the boxes below. Finally, click Save to create your structure and then complete each of the following structure tabs for products, adjustments, linked programs, and payment terms.

When your customer searches for fuel, they will see the following for your index-based price:

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Active Designs are required

For index pricing to work, you must have price designs that are turned ON for the chosen periods. For example, in the image shown above, price designs have been built for each of the daily periods shown (8/17 - 8/20). If a price design was not configured for any of those periods or simply turned OFF, the index price would not be visible to customers.