Brett Williamson, 27 January 2016

Only one thing has remained constant in Adelaide’s fluctuating fuel market recently — the continual increase in profit margins from premium fuels.

Motorists in Adelaide recently rejoiced when standard unleaded petrol (ULP) prices dropped below 100c per litre.

While some drivers enjoyed financial relief at the bowser, premium fuel purchasers have actually been paying a higher margin on their fuels than ever before.

Royal Automotive Association of South Australia (RAA) senior analyst Chris West said data it had collected showed petrol companies had been slowly increasing the mark-up on premium fuels.

The growing gap between standard and premium fuels

The RAA began average price comparisons of ULP in the last quarter of 2010.

Final quarter 2010 figures showed 91 ULP (standard) at 124.2 cents per litre, with the premium fuels 95 ULP (9.3 cents) and 98 ULP (14.1 cents) higher.

At the end of 2015, margins had grown to 11.8 cents per litre for 95 ULP and 18.0 cents per litre for 98 ULP.

“It is growing, at this stage, at about 1 cent per year,” Mr West said.

Retailers are noticing that people are becoming addicted to using those blends.

RAA senior analyst Chris West

He said clever marketing had most motorists believing their vehicles required the premium fuels.

“Retailers are noticing that people are becoming addicted to using those blends when perhaps they shouldn’t,” he said.

“It is really important to use the blends required for your car but understand that many vehicle manufacturers now give you a minimum blend and a recommended blend.

“It is really important to check your user manual to find out exactly what sort of fuel you could be using.”

Mr West said the average motorist could save several hundreds of dollars per year by switching.

“Switching down to the regular unleaded, you are saving 10 to 11 cents per litre,” he said.

“That is a significant saving over a long period of time.”

Mr West added as suppliers continued to extend the margin between the standard and premium blends, savings would grow.

Cheaper displayed price lures premium fuel users

Mr West said while New South Wales had introduced legislation for petrol stations to display the price of their two best-selling ULP blends, SA motorists were still being caught out at the bowser.

“It is really important that our service stations actually display all of the fuel blends they sell on their street boards,” he said.

Switching down to the regular unleaded, you are saving 10 to 11 cents per litre.

RAA senior analyst Chris West

Many motorists were also being caught by stations removing 95 ULP pumps.

“We are noticing some major brands are phasing out 95 and just offering 91 and 98,” Mr West said.

“It’s an easy way for retailers now to get extra profits by doing just that.”

Mr West said South Australian drivers primarily purchased 91 blend, with premium fuels making up 15 to 20 per cent of all fuels sales.

He said he expected premium blend shares to grow as people purchased newer vehicles.

“We are concerned that 95 and 98 motorists are copping high prices overall and the prices are getting higher quicker because the gap is growing over time,” Mr West said.

Extracted in full from ABC News.