THERE’S never been a better time to fill up, at least not in the last 15 years.
Fuel prices are at their lowest point in real terms since Halle Berry won Best Actress at the Oscars and the first Spiderman film came out.
But the ACCC still thinks the service stations are ripping us off, saying gross retail margins — the difference between average retail prices and average wholesale prices on fuel sold in Australia — are still too high.
“While motorists are enjoying the cheapest petrol since 2002, we believe prices should have been even lower given the continuing high gross retail margins,” ACCC Chairman Rod Sims said.
The competition watchdog, which has been monitoring prices in the nation’s five largest cities, said retail margins had remained high despite quarterly average petrol prices dropping by 3.9 cents per litre from the March quarter to 125.2 cents per litre.
And it argued that while the increase in gross margins since 2014-15 “may partly reflect regulatory and compliance costs, especially in NSW’, increasing costs “do not fully explain the sharp increase in margins”.
“Prices at the pump in 2016-17 are reflecting the relatively low international price of refined petrol which fortunately is a result of the OPEC cartel failing to successfully restrict the supply of crude oil,” Mr Sims said on Thursday, when the regulator released its quarterly report on the sector.
Of the price paid at the bowser, 42 per cent is the international price of refined petrol, while another 42 per cent is taxes such as GST and excise.
Regional areas were still paying more for fuel, including high margins, Mr Sims said.
“Motorists in Launceston, Armidale, and Cairns are paying too much for petrol. We encourage people to use fuel price apps to locate petrol stations in their area with relatively lower prices,” he said.
“Competition is driven by the willingness of motorists to shop around for the best price. For example, in Cairns, motorists that shop around can find petrol that is consistently around 10 cents per litre lower than the average.”
FuelCheck, Motormouth and GasBuddy apps have emerged as a way for consumers to cut their petrol costs.
Industry leaders have disputed the ACCC’s hard line stance on their pricing models, saying the criticism fails to understand the costs they face.
RETAILERS DEFEND PRICES
Mark McKenzie, chief executive of ACAPMA, the national peak body representing fuel retailers, last month told news.com.au there was too much “fake news” about petrol prices.
“We’ve seen two very significant cost increases in the last 12 months,” Mr McKenzie said. “The first is rents, for those who are leasing sites, between 40 to 50 per cent of retailers, their rental costs have gone up by 40 per cent in the first quarter.
“Energy, the third-biggest cost, has gone up between 80 to 110 per cent. What people forget here is we’re not a charity. These are businesses who have to recover their costs through the price of products they sell.”
He added that state governments were also contributing to the problem. “One of the biggest retailers in NSW has spent close to $200,000 per site complying with the government’s vapour recovery legislation,” he said.
“The ethanol mandate in NSW and Queensland is imposing costs of between $60,000 to $250,000 per site. You can’t just keep legislating and expect the industry is going to keep cutting its margins because it loves the government. Compliance adds costs.”
Mr McKenzie said there was “no evidence” for the ACCC’s claim that margins were too high. “All they’re doing is reporting on the variation between the wholesale and retail price and making a guesstimate,” he said.
“In our industry we see margins range between 8 cents and 17 cents per litre. Smaller retailers in particular still have the same labour costs and rental costs but much smaller fuel volume, two million litres a year compared with six million, obviously to survive you have to charge more per litre. That’s why people shop around.”
He encouraged consumers to shop around using fuel apps, but said not all customers were bargain hunters, with many opting to stop at the most convenient petrol station on their route.
Extracted from News.com.au.