One filling station, Neste, ended its fuel discount to loyalty card holders in September, reducing prices at pump to all buyers instead and triggering a temporary price war.

The price war led to greater price differential as retailers competed and added more discounts, though even these competitors conceded at the time that since fuel retail is a highly competitive sector and the changes had caused confusion on the market.

Initially, Neste's did not immediately follow suit with adjustments to their own loyalty programs.

However, at the end of last month, Circle K announced changes to its loyalty program, scrapping the discount to loyal customers of three to five cents per liter, depending on their fuel consumption, and replacing it with a discount of one to three cents per liter - based on the amount of fuel purchased from Circle K over the preceding 90 days.

Over the weekend, another chain, Alexela, also announced changes to its loyalty program which mean that from next week, the company will send personalized offers to customers via its mobile app. Customers who also have home electricity or natural gas contracts with the company will get an additional discount on fuel purchases.

Alexela will be discontinuing the general discount that had previously reduced the pump price for all customers, however; customers instead will be able to earn extra discounts by collecting digital stamps, which they can use to hike the usual customer discount, from its present three cents, to five cents per liter.

Alexela's head of business development Tarmo Kärsna said while the previous loyalty program had been generous in terms of discounts, this meant higher pump prices, and customers in turn had indicated they would prefer pump prices to be harmonized, as far as was possible. "This is where our correction to the loyalty program came from," he said. Kärsna added that Estonian customers are used to seeing fuel prices at different chains being roughly the same and comparable even without discounts applied, which was also part of the company's rationale.

"Customers have two expectations: A competitive pump price and additional discounts for being a loyal client," he added.

Alan Vaht, board member at Terminal, another gas station chain, said that while the chain has not yet implemented changes, it has been considering how to develop its loyalty program. "We are taking those steps — I think in about two weeks we should be ready to launch a new loyalty program," he said, adding that the program would depend on how many liters a customer puts in their vehicle.

Vaht admitted that pump prices have been pushed down, and loyalty programs tightened. He also noted the role that staffed versus unstaffed gas stations play. "The market has changed. What we've seen since the beginning of September is a battle — even a psychological one — between manned and unmanned stations, or rather one automated station chain's battle."

Customer habits and preferences have changed too: Whereas in the past the filling station market struggled while retail did well, in the last 15 years it has been the era of manned stations, which customers prefer. Within his own chain at least, Vaht said he sees that staffed stations are doing better than unstaffed outlets, which is why their solution has been to expand shop services.

In recent months, in areas with stronger competition, the price of gasoline has at times been even lower than the purchase price, Vaht said. "The market has been turned upside down, and it's searching for a new balance."

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