Daryl Passmore, 17 December 2015

RECORD high retail margins grabbed by service station chains are costing Queenslanders a combined $125 million a year more for fuel than they should be paying.

The Palaszczuk Government will hold a “roundtable” of petrol companies and motoring groups early next year to probe why drivers here are being hit harder at the bowser than those in the rest of Australia.

“We know that petrol prices are something that affect everyday Queenslanders and contribute to the cost of living,” Acting Energy Minister Leanne Enoch said.

“While prices are set by the market we want to work with stakeholders to ensure Queenslanders are getting the best prices they can.’’

The Government has not yet decided if it will be held in public.

The move follows an Australian Competition and Consumer Commission report on Tuesday revealing that margins in the three months to September hit the highest level since the watchdog began tracking them in 2002.

It also highlighted that petrol companies have consistently been pocketing more profit from southeast Queensland drivers than those in other cities for the past eight years.

RACQ spokeswoman Renee Smith said: “It’s been going on for too long. Enough is enough – it’s time for action. And it’s not just the southeast. People in places like Cairns have been getting ripped off for a long time.”

The difference between the terminal gate (or wholesale) price and the amount charged on forecourts averaged 12.6c a litre in Brisbane in the year to September – nearly twice the 6.8c margin in Melbourne. That means the average Queensland family is paying $95 a year more than one in Victoria to fill up, according to the RACQ.

ACCC chairman Rod Sims told The Courier-Mail that retail margins nationwide were about 4c per litre above the long-term average – adding a massive $600 million to $700 million to the country’s fuel bill.

“We are very concerned,’’ he said. “It’s worrying that Brisbane seems to have higher prices than other centres – and significantly higher than Melbourne.”.

The ACCC would closely monitor the situation to try to “shed more light’’ on what, and who, was leading prices upwards, he said.


Q: What is the retail margin?

A: The Gross Indicative retail differences (GIRDs) or indicative retail margin is the difference between the observed retail price of petrol and the wholesale price or terminal gate price. The ACCC says GIRDs are “indicative of the margins achieved by retailers on the sale of fuel, and may reflect overall retail profits.”

Q: Why is the retail margin so high in SEQ?

A: It is the combination of a number of factors, but a major part is the reduced number of independent retailers in SEQ, leading to weaker retail competition.

An example of how this works in reverse is Costco on the northside of Brisbane consistently driving petrol prices down and forcing nearby service stations to follow suit.

Q: What will the ACCC do about it?

A: ACCC chairman Rod Sims says it will monitor the situation closely. ACCC does not have current capacity to launch a formal investigation but would welcome the Queensland Government

holding an inquiry into fuel prices

Q:How does the price cycle work?

A: It only impacts those motorists in SEQ. The cheap phase of the price cycle only lasts so long, and then prices shoot up very sharply. This can happen overnight and result in an increase of as much as 30cpl. Prices then trickle down by 1cpl or 2cpl per day, and fall a lot slower than they rise.

Q:What impact has the removal of Queensland’s fuel subsidy had?

A: On 1 July 2009, the Queensland Fuel Subsidy Scheme was removed and the State Government increased the price of petrol and diesel by 9.2 cents a litre (the 8.3cpl subsidy + GST). This was despite calls by the RACQ, major industry groups and the general public for the fuel subsidy to remain.

While removal of the subsidy program has saved the State Government more than $500 million a year, the extra 9.2 cents a litre fuel tax has left a legacy for Queenslanders of higher motoring fuel bills and transport costs. For the average motorist the increase in the fuel bill works out to $150 per annum.