Petrol prices too high: ACCC

Petrol prices too high: ACCC


Farm Online News
Petrol prices should be below the already low price cost at the bowser, ACCC chairman Rod Sims says.

Petrol prices should be below the already low price cost at the bowser, ACCC chairman Rod Sims says.

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Prices down at bowser, but motorists still pay too much

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DESPITE the lowest petrol prices level in real terms in 15 years, drivers  are paying more than they should.

That’s according to Australian Competition and Consumer Commission chairman Rod Sims, who said prices at the pump are too high even though OPEC oil exporters failed in their efforts to reign in crude oil exports to drive up prices.

“While motorists are enjoying the cheapest petrol since 2002, we believe prices should have been even lower given the continuing high gross retail margins,” Mr Sims said.

Average gross retail margins in capital cities decreased by 0.6 cents per litre (CPL) in the June quarter to 11.7 cpl, but gross margins in real terms are the highest since monitoring in 2002.

In the bush, retail prices in Launceston, Armidale, and Cairns remained above the long-term competitive cost-based price in the June quarter 2017.

Annual average retail petrol prices in the five largest cities in nominal and real terms: 2000–01 to 2016–17. Cents per Litre (CPL) indicated on vertical axis. Source: ACCC

Annual average retail petrol prices in the five largest cities in nominal and real terms: 2000–01 to 2016–17. Cents per Litre (CPL) indicated on vertical axis. Source: ACCC

“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,” Mr Sims said.

Excise, the Goods and Services Tax and import costs do not explain the high retail margins, Mr Sims said are not

About 42 per cent of the price at the bowser is the international price of refined petrol, and another 42 per cent is taxes.”

Mr Sims said the increase in gross margins since 2014-15 may partly reflect regulatory and compliance costs, especially in NSW. However, the ACCC believes that these increasing costs do not fully explain the sharp increase in margins.

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