Dana McCauley, 16 December 2015
THAT sneaking suspicion that petrol stations are gouging us has been proven true.
The national competition regulator has released a damning report that confirms service stations are taking the biggest cut that’s been seen in more than a decade.
Despite plummeting oil prices, retailers are enjoying the highest margins since monitoring began in 2002, keeping prices above $1.30 across the country.
The margin means the difference between what petrol station operators pay for petrol compared with the price they charge consumers.
Australian Competition and Consumer Commission chairman Rod Sims told the ABC there was “a bit of aggression going on” in the market.
“We’ve certainly noticed that in some of our regional market studies and looking nationally it does seem as if margins are at the highest level ever and that does suggest some fairly aggressive behaviour in the petrol market,” Mr Sims said.
Asked if this amounted to “price gouging”, he told the ABC that “people can use whatever terms they want, but it certainly is I think some reasonably aggressive behaviour”.
He said Sydney, Brisbane and Adelaide were the worst hit, while Melbourne and Perth did not fare as badly.
Mr Sims called on petrol retailers to rethink their approach, or risk damaging their reputations.
With global oil prices levelling out to their long-term average, the wholesale price of petrol has dropped by eight cents a litre. But this has not been passed onto drivers.
The ACCC is fighting Australia’s five largest petrol retailers in court, alleging that a third party company has been enabling them to alert each other to their prices in close to real time.
The average retail petrol price in the Australia’s five largest cities was 133.2 cents per litre in the September quarter, down 2.6 cents from the June quarter (135.8 cpl).
But the decrease followed much bigger falls in international crude oil and refined petrol prices.
A weaker Australian dollar went only some of the way towards explaining the discrepancy.
Mr Sims said if the exchange rate had been at the same level as it was in January 2013, when it bought $US1.05, retail petrol prices in the September quarter 2015 would have been about 20 cents lower.
International prices fell during the quarter due to a rise in crude oil supplies in global markets, and the Australian dollar fell by 9 per cent to 70 US cents.
The report also showed that gross retail margins in the September quarter were at their highest level since the ACCC began monitoring in 2002.
Average margins in the five largest cities were 11.8 cpl, an increase of 1.3 cpl from the June quarter.
Sydney and Brisbane had the highest margins in the September quarter, about 14 cpl.
“Gross retail margins in Sydney and Brisbane were 6 cpl higher than in Melbourne,” Mr Sims said.
“In fact, margins in Brisbane have been consistently higher than in the other major cities in recent years. We will be closely monitoring gross retail margins in the coming months, because high retail margins likely indicate increased profits of the petrol companies at the expense of motorists.”
The ACCC recently released a separate report into the petrol industry in Darwin, where inflated prices are forcing motorists to fork out an extra $9 million a year due to “weak competition”.
“We hope that the findings from the Darwin market study, as well as from future market studies, will provide a better understanding of why petrol prices in many regional locations are as high as they are,” Mr Sims said.
The ACCC has been closely monitoring petrol prices since December last year, when then Coalition minister Bruce Billson ordered quarterly reports on prices, costs and profits, for a period of three years.
Extracted in full from the Daily Telegraph.