It will come as no surprise to Northern Territorians that the national body charged with investigating allegations of fuel price gouging chose to start its investigation in Darwin.
The Australian Competition and Consumer Commission (ACCC) will use its information gathering powers to compel fuel companies to provide details about their pricing and supply chain arrangements in the Northern Territory capital.
It is the first in-depth investigation into high petrol prices in regional Australia.
Two more regional locations will be chosen for similar investigations by the end of the year.
The ABC details the reasons why the ACCC chose Darwin.
Fuel prices a pineapple up the backside: Chief Minister
Fuel prices in Darwin are generally higher than interstate, with the Northern Territory Chief Minister last year describing them as a pineapple “jammed up the backside of Territorians”.
Adam Giles was speaking at a summit convened late last year by Government to explain why petrol prices in Darwin were about 27 cents per litre higher than in other capital cities, and considerably higher than other regional centres.
Critics asked why significant falls in the wholesale price of petrol were not being passed on to consumers.
The summit was on October 8 – since mid-year the global price of oil had been sliding.
The summit was told since the beginning of 2014 prices had fallen by 12 to 14 cents per litre in parts of Australia, but less than 0.3 per cent in Darwin.
It was also told the fuel price retail margin in Darwin was 31.9 cents per litre, or nearly double the next highest capital city.
The October summit was convened amid long-standing allegations of price gouging at Northern Territory service stations.
Petrol companies represented at the forum gave potential reasons for the higher prices, including:
- excessive government red tape;
- higher costs, including rents, servicing equipment fees, drivers wages and electricity prices; and
- NT consumers shopped around less for cheaper fuel than those in other states and territories.
Delegates asked why fuel in Katherine, about 300km south of Darwin, was cheaper than in the capital, despite a smaller population and increased costs of transportation to take it there.
Elsewhere in the NT, the cost of fuel tends to increase with distance from Darwin.
Tennant Creek, for example, about 700km south of Katherine, has the most expensive fuel of any large regional Australian town.
The October summit concluded without any firm commitment from delegates or Government about ways of making fuel cheaper.
In the month following the summit, however, Darwin fuel prices became suddenly volatile, having barely changed in the preceding year.
The price fell from about $1.76 to $1.56.
The changes also reflected volatility in the global price of oil, which had been falling since June.
‘We pay more than you mob all put together’
The refinery price, which is directly affected by the cost of oil, is the most important variable factor determining the price of petrol – it makes up about half of the cost of fuel at the pump.
Taxes including GST and the fuel excise account for another 34 per cent.
Wholesale and retail margins are typically only about 7 per cent and 11 per cent respectively.
These proportions, however, are for fuel costing about $1.51 per litre – they are dramatically different in parts of remote Australia, where petrol can cost up to $3 per litre.
At the fuel summit, Aboriginal leader Maurie Japarta Ryan called for action.
“We pay more than you mob all put together, and we live on the dole, the BasicsCard, trying to live and survive. Do something about it,” Mr Ryan told the summit.
Following the ACCC announcing its investigation, NT Labor politicians called for a more wide-ranging inquiry into remote and regional fuel prices.
Extracted in full from ABC.