In the ACT, however, prices have been relatively static for three months. The average last week was $1.64, according to monitoring website MotorMouth.
AMP Capital’s chief economist, Shane Oliver, drew attention to what he called Canberra’s “curious pricing”. But the reason for it, he said, was simple rather than sinister: the ACT is just too small.
“There’s just not a lot of competition there,” he told The Canberra Times.
“In Sydney and Melbourne and most of the larger cities, there are a lot of independent retailers. And they’re the ones, as soon as they have the opportunity, who really get the price down, forcing everyone else to follow them.”
He said retail fuel prices tended to follow the global crude oil price, though with a lag, “because the petrol we use now may be based on oil bought a few weeks ago”.
The length of that lag was linked not so much to the number of service stations in a city but the number of independent retailers, which “have the effect of keeping the larger retailers honest”, Mr Oliver said.
“And so, consequently, in the larger cities there tends to be more variability in price.”
Hobart, even smaller than Canberra, experiences the same pattern: gradual rather than sudden changes in petrol prices.
Mr Oliver says there is good news for ACT drivers: our prices will fall – eventually – as long as oil prices stay low.
And while it’s easy to forget, today’s petrol prices are actually cheaper than they were 10 years ago. If you account for inflation, petrol is cheaper now than it was 17 years ago.
If that surprises you, there’s a reason for it: most of us see petrol prices all the time as we drive past service stations.
“It’s the only price in Australia where we see it on virtually a daily basis,” Mr Oliver said.
“We don’t have other prices in our face so regularly, so we just don’t notice when they’re high.
“There’s also that other phenomenon, where we don’t notice the good news – price falls – as much as the bad news.”
Extracted from The Age