The warning from ACCC chair Rod Sims comes following the latest ACCC petrol industry report showing that profits have risen in recent years, while weekly average international crude oil prices decreased by around US$ 50 per barrel since the beginning of the year - and which “largely flowed through to Australian wholesale petrol prices, which have decreased by around 50 cents per litre (cpl) in the same period”.
“Especially at this difficult time, retailers must not take advantage of the situation to increase their profits, but should pass on savings to motorists,” Sims said.
“The ACCC’s role is to monitor the market closely, and we will continue to do this, particularly to keep the pressure on the petrol retailers at this time.”
Sims said the drop in the crude oil price is “good news for the Australian motorists. At this time the Australian economy needs all the assistance it can get, and lower world crude oil prices are one of the few positives from current world events.
“In the larger Australian capital cities, petrol retailers took too long to pass on the savings from the rapid drop in international oil prices, and this did not reflect well on them.”
Sims said that in Hobart, Canberra and Darwin as well as many regional locations, retail prices have been much slower to come down and the extent of the falls has varied widely.
“Fuel prices are generally higher in regional Australia due to a number of factors, including lower population and demand, meaning there are fewer petrol stations, which often leads to less competition. There are also higher costs for transport and storage of fuel, and less convenience sales which can support the operation costs of petrol retailers when fuel prices are low,” Sims notes.
“Price changes in regional centres can lag up to six weeks behind changes in the larger capital cities, because the turnover of stock is generally lower in the country. The reduction in demand for petrol due to current travel restrictions may have further exacerbated the lag.
“We have previously found that the lack of vigorous and effective competition in some regional locations was a major reason for higher prices in those locations,” Sims said.
“Where there is competition, you tend to see lower prices. Giving your business to outlets that are pricing competitively sends a strong message to those that have high prices that they will lose your business.
“We recommend motorists compare prices on fuel price apps and websites, such as MotorMouth and the government schemes in NSW, WA and the NT, which also provide information on retail prices in regional locations.”