PETROL stations in Cairns are making 38 per cent more profit on fuel sales than the average across Australia, according to an Australian Competition and Consumer Commission report.
ACCC chairman Rod Sims said the reason, quite simply, was the lack of competition. He said he hoped the release of the long-awaited report analysing the petrol market in Cairns would put pressure on retailers to reduce prices.
The study found since 2012-13 petrol prices in Cairns were about 11 cents per litre more than in the five largest cities in Australia, including Sydney, Brisbane and Melbourne. THE study found that the average net profit per petrol station in Cairns was about 38 per cent higher than the average net profit across other (190) sites around Australia in 2015–16.
The ACCC estimates, if competition existed in Cairns, prices should be 4-5c a litre less and collectively motorists would save $3.5 million a year.
“The ACCC’s Cairns petrol market report confirms what motorists have suspected for a long time: they are paying too much for fuel and contributing to very high profits for retailers in the area,” Mr Sims said.
“Competition in the Cairns fuel market is weak and unfortunately it is consumers who are paying for this at the bowser,” he said.
Mr Sims said the study found that, despite the poor competition, there was no breach of competition or consumer laws.
“The report found that the main reasons for the higher prices in Cairns were higher retail profit margins on petrol, higher wholesale prices and higher retail operating costs per litre,” Mr Sims said.
“Compared with historical retail margins and profits, and those of similar-sized towns, retail margins and profits in Cairns are currently very high.”
Mr Sims said three steps that could be taken to promote more competition in Cairns were: increased petrol price transparency; regular reporting on wholesale petrol prices and retail margins; and new competitively priced retailers entering the market.
Extracted from The Cairns Post