Two weeks ago, in a story entitled “Fair Fuel Watchdog RACQ Slams ‘Soaring’ Toowoomba Prices After Petrol Hits Nearly $1.60 Across The City”, the Queensland’s motoring body again took aim at Queensland fuel retailers when fuel prices in the regional city allegedly rose from 148.2cpl to 160cpl.

According to the RACQ, with all their fuel retailing experience, the fair fuel price should have been 126cpl. Buried midway in the article there was some acknowledgement that there were some services stations in the city that were selling fuel between 119.9cpl and 125cpl, suggesting that there was wide variance in petrol prices within the local market – and confirming that price sensitive consumers had readily accessible alternatives to the higher priced sites in the local area.

Apart from the fact that it appears the RACQ has apparently appointed itself to the role of “Fair fuel Watchdog” – which would likely be news to the government appointed ACCC – it is ridiculous to believe that an organisation with no experience of fuel retailing and an apparent lack of understanding of local market pricing dynamics, could reasonably claim to be able determine the fair price of fuel.

“The assertion that the RACQ can determine the fair fuel price makes about as much sense as ACAPMA, with no experience in motor vehicle insurance, running out into the media with statements about what a fair price for motor vehicle insurance should be”, said ACAPMA CEO Mark McKenzie.

The RACQ’s cry was, as usual, premised on a strategy that appears to be about waiting for fuel prices to rise under the umbrella of traditional petrol price cycle movements and then feign ‘outrage’ to grab a sensationalist headline to promote its own brand.

“What is interesting is that the RACQ is the only motoring club in the country that appears to adopt this approach with more responsible bodies like the NRMA and RACV making comment based on decent analysis”, said Mark.

The comments are also worth considering in relation to the analysis presented in the latest quarterly update on the Australian Petroleum Market that was released by the Australian Competition and Consumer Commission yesterday (See Quarterly report on the Australian petroleum market – December quarter 2020 | ACCC). Perhaps the most favourable thing to say of such a comparison is that the comments of the RACQ appear to be out of touch with the real “watchdog” – that is, the Government appointed ACCC.

In releasing its latest report, ACCC Chairman Rod Sims said “Restrictions on travel and economic activity from the pandemic have had an enormous effect on petrol volumes and prices in Australia”.

“All motorists would have liked to see petrol prices remain at the record lows of April last year, but average prices in the December quarter were still about 30 cpl below the 15-year inflation adjusted average”, Mr Sims added.

“We don’t always agree with the ACCC but at least they provide fuel price commentary that is premised on an objective analysis of comprehensive fuel price data – and developed from their experience gleaned from examining petrol price trends and marking dynamics in Australia for more than 15 years”, said Mark.

Within this context, the RACQ criticism looks both selective and trite. But the RACQ’s misunderstanding of the Australian retail fuel market is not limited to making unreasonable extrapolations from selective data, with the RACQ’s Fuel Pricing app making comparisons of retail diesel prices across Queensland that are invalid.

Like most fuel price reporting mechanisms for motorists, the RACQ compares the prices of petrol and diesel across the State using information derived from the Queensland Governments Fuel Price Reporting Scheme. The problem is that when it comes to diesel, the RACQs petrol price app does not distinguish between diesel and premium diesel – despite making the distinction for the various grades of petrol available in the market.

“Apparently, the RACQ doesn’t understand that there are two grades of diesel sold in the Queensland market – one being a premium product that attracts a higher retail price, in the same way premium petrol attracts a higher price over standard unleaded petrol”, said Mark.

“It is a bit like comparing a no-frills insurance product with RACQ’s premium insurance products – the comparison is meaningless and, it could be argued, is misleading consumers by suggesting that there is no difference in these diesel products”, continued Mark.

Perhaps the RACQ could spend some time better understanding the fuel retail market in Australia and ensuring that the advice it provides to motorists on petrol and diesel prices is both accurate and valid.

ACAPMA