Petrol prices to rise on holidays and school run in plan to charge extra at busy times

Motorists will be forced to pay more for petrol on bank holidays and while doing the school run, under a secret pricing revolution being drawn up by supermarkets.

Artificial intelligence capable of charging drivers extra at busy times has arrived in the UK for the first time, and is expected to result in the biggest shake-up of fuel prices in nearly half a century.

The Daily Telegraph can reveal that major British supermarkets are in late-stage talks with Denmark-based a2i Systems, the firm which sells the computer algorithm, and could install it within months. 

Drivers could see petrol prices move several times over the course of a day, with the cost rising or falling by up to 2p a litre, or around £1 per tank.

The technology is already being used at thousands of companies across the US and Europe, where it is common for fuel prices to move between four and ten times a day.

It uses an algorithm, which is modeled on the human brain, to scour huge databases of customer information to predict how consumers and competitors will behave.

For example if the computer detects that supermarkets are having a quiet spell it could drop petrol prices to attract shoppers through the doors.

Alternatively if a higher than normal volume of customers are filling up their tanks, such as on a sunny day or on the school run, it could raise the price.

Last night experts warned the introduction of new real-time fuel pricing would anger drivers, who they predicted would quickly clock that they were paying more during peak times.

Luke Bosdet, a fuel analyst at the AA, said: "This represents a huge change which would be most unfair on commuters and families visiting relatives during the holidays. It will wind them up no end as they will become wise to the fact that retailers can exploit price movements."

Jason Lloyd, managing director at Petrolprices.com said the technology was a "holy grail" which would revolutionize petrol pricing and give retailers a competitive edge. 

He said: "The petrol industry in the UK hasn't changed at all for about 40 years meaning it is very behind the times compared to other countries. But pumps have been manually raising prices at weekends but this will let them flex their prices on a real time basis, which is somewhat of a holy grail for them."

Martin McTague, director at a3c, the UK arm of a2i, said "This way of petrol pricing is completely new to the UK. Currently petrol pumps' prices are very competitor focussed rather than being focussed on the behaviour of customers. This will change that as pumps will make prices based on data just for their own customers. They will know when price sensitive customers are coming, and when customers don't mind so much what they pay."

It comes after the Government piloted electronic fuel pricing signs along the M5 motorway between Bristol and Exeter, in a move designed to encourage competition on pump prices.

But one year on it appears the signs may not have had the desired effect, as some pump prices are higher at stations with e-signs compared to nearby pumps without the signs. 

For example on Friday last week petrol prices at Bridgewater and Sedgemoor were around 130p per litre, while the price was 112p per litre at nearby Cullompton.

Do you have a story about fuel or cars? Email katie.morley@telegraph.co.uk

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