21 January 2016

With Australia’s retail price of unleaded petrol dipping below AU$1 per litre, it seems, petrol is now cheaper than beer. This rock bottom Australian price is the mod at three petrol stations of Blacktown in Sydney’s west and Adelaide, where petrol was sold for less than a dollar.

This was revealed by South Australia’s Royal Automobile Association, reports ABC News.  Royal Automobile Club of Queensland public policy manager Michael Roth, too predicted further drop in prices to 99.9 cents. He said some service stations are using this as a “marketing gimmick.”

“We’re unlikely to see petrol below $1 as an average, as the wholesale price is still sitting above 105 cents a litre and they would be selling at a loss,” said Roth.

Interestingly, a can of beer is still costly. The beer prices are hovering between AU$1 to AU$2 in the case of labels like Victoria Bitter or Hammer & Tongs.   Meanhile, credit for the lowest petrol prices to consumers must go to the pressure exerted by the Australian Competition and Consumer Commission (ACCC). It insisted that the low oil prices must reach the motorists at petrol stations. However, Australasian Convenience and Petroleum Marketers Association chief executive Mark McKenzie said the drop in price is a normal practice. He also called it a part of the routine price cycle.

“Retailers are basically businesses in their own right, so they’ll make margins. What they’re basically doing is passing on the lower costs of fuel as it comes through,” he said.
Crude oil prices crashed 20 percent in 2016 to hit US$28 (AU$40) a barrel and in April-May, the oil prices were at US$65 per barrel. The motoring industry group MotorMouth claimed that Adelaide had the lowest unleaded petrol price. On Tuesday it sold at an average of 104.1 cents. The trade group called it the only capital city in Australia to offer a lower price at the point of delivery.

The prices in other capital cities were Sydney (108.1 cents), Melbourne (109.1), Brisbane (120.0), Perth (125.0), Darwin (125.1), Canberra (125.8) and Hobart (129.6).

Extracted in full from Australia Network News.