Petrol prices falling, says consumer watchdog

The Australian consumer watchdog says national petrol prices have fallen roughly seven per cent from the 2015-2016 national average.

But that figure isn’t sufficient, according to motoring groups.

In its September quarterly report released today, the Australian Competition and Consumer Commission found the national average price was 114.2 cents per litre, a 3.8c/L fall from the June quarterly average and a 7.5c/L reduction from the 2015-2016 average.

According to the report, Brisbane pays the most for petrol of any Australian capital, at 115.2c/L, while Adelaide buys the cheapest petrol, at 113.1c/L.

Importantly, the September report revisited Gross Indicative Retail Differences (GIRDS) within the industry, calculated by subtracting the average terminal gate or wholesale prices from average retail petrol prices.

It found that the broad retail margin has crept up slightly based on an average from the past 14 years, even though the September figure was down slightly against June.

“During the September quarter 2016 the ACCC sought further information from major petrol retailers about higher regulatory and operating costs that may have been influencing GIRDs,” the report said.

According to feedback from retailers, increased compliance costs are affecting fuel prices, particularly in NSW. These include clean air regulations which stipulate the installation of fuel vapour recovery systems, the installation of groundwater monitoring systems, the FuelCheck program (which requires all retail sites to provide fuel prices to NSW Fair Trading in real time) and fuel price board specifications.

The report said that motorists are paying up to one cent per litre extra in their fuel bill due to increased compliance costs.

“While the impact of these regulatory and other costs in 2015–16 was significant, it does not fully explain the large increase in GIRDs in 2015–16 (2.6 cpl),” the ACCC said.

Peter Khoury, a spokesman for the NRMA, criticised large fuel outlets that cited increased compliance costs as the major trigger for more expensive fuel.

“They’ve used that excuse every year for an eternity,” he said.

“When the average profit margin is 11 cents per litre, it’s clearly got to be more than that.”

Khoury encouraged motorists to re-fuel at independent service stations, whose margins are considerably tighter than multinational outlets.

“The independents are making two or three cents a litre at most, and then there are the major players at the higher end of scale in terms of margin,” he said.

“There is scope for that figure to narrow. From the motorists perspective it’s a case looking out for the more competitive outlets and choosing those. It’s not uncommon for servos in the same suburb to be 20 to 30 cents a litre different in price.”

The report also found the ethanol mandate introduced to NSW in 2007 continues to enforce higher spending by motorists by reducing the availability of regular unleaded petrol from many retail sites. S

ince its introduction in 2007, it is estimated Sydney motorists have spent between $75 million to $85 million more on petrol than other states.

“Some motorists who could not, or chose not to, use E10 in their vehicles used premium unleaded petrol (PULP) due to the reduced availability of RULP,” said the report, citing a 54 per cent take-up of premium unleaded petrol in Sydney against a 36 per cent take up of E10.

A similar ethanol bill has been introduced in Queensland and will take effect from January 1, 2017.