Feel like you and your business are paying more at the bowser? You aren’t alone, with the Australian Competition and Consumer Commission (ACCC) revealing margins for petrol retailers have reached a new record high.
The competition regulator’s latest quarterly petrol report for the December 2017 quarter revealed average price for a litre of fuel in Australia’s five largest cities increased by 12.6 cents, taking it to 135.1 cents per litre.
Brisbane retains the crown of having the highest petrol prices of any of the five largest capitals. Interestingly, though, the price difference between city and regional areas close significantly in the quarter, hitting just 1.4 cents per litre difference. This compares to a gap of 5.2 cents per litre the previous quarter, and the yearly average in 2017 of 5.0 cents per litre.
While ACCC chairman Rod Sims said that higher oil prices and a lower Australian dollar compared to the US dollar accounted for around two-thirds of the increase, the rest came from record retailers taking in record margins on fuel sales.
“Petrol retailers’ margins are the highest they have ever been and motorists are paying for it. Last quarter alone, average gross retail margins in the five largest cities were 14.2 cents per litre, an increase of 3.9 cents per litre from the previous quarter,” Mr Sims said.
“The ACCC accepts that some of the increase in gross retails margins has been due to increased costs; the information we have, however, indicates that this contribution does not explain the bulk of the increase.”
According to the report, retailers and industry bodies attributed at least part of the increased margins to recouping higher compliance costs, particularly in NSW and Queensland.
But it noted “the ACCC has not received sufficient information from retailers on a consistent basis to quantify this”.
The report said it is aware of major retailers, such as Coles Express, charging higher prices relative to average wholesale prices, which could lead others to copy the practice and in effect create a new retail average.
“The ACCC intends to address this issue further during the current monitoring direction,” the report concluded.
Mr Sims urged consumers and small business operators to “fight back against these high prices” by using price comparison websites, taking note of the weekly price cycle and shopping around to find the best price.
“Consumers can save significantly by timing their purchases during the price cycle, which encourages retailers to be more competitive,” he said.
“Retail prices in the larger capital cities can vary by around 25 cents per litre to 30 cents per litre near the time that price cycles are increasing. The ACCC website has information on price cycles in the five largest cities and provides tips on when to buy petrol.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.