Are we being ripped off at the petrol bowser?

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Strange times lead to strange outcomes, and one that we’ve never seen before is benchmark US oil prices falling below zero for the first time in history. Yes, US oil producers now have to pay people to take oil away.

So, will we see pump prices in Australia fall to record lows? Don’t bank on it.

For a start, the less-than-zero oil price applies only to contracts for West Texas Intermediate (WTI), a crude oil produced in the US. The WTI price is an indicator of global oil prices, but Australian fuel prices depend on Dated Brent crude oil contracts. At the time of writing, the price for the oil we buy was around $US25 a barrel (just under $40).

The reason for the dramatic fall in oil prices is, of course, the COVID-19 pandemic. Demand has fallen more than six times further than leading forecasters predicted, resulting in a worldwide glut. Producers are desperately trying to reduce production, but it’s not something they can do overnight. Adding to their woes, the sudden drop in demand has left buyers with no storage capacity.

That means the wholesale price of fuel in Australia is currently about 82 cents per litre, which makes it hard to understand why pump prices in many places are well above $1 a litre.

It’s a pity we can’t bulk buy fuel, but for the time being, fuel prices will remain low and should continue to fall. The only unpredictable element is just how greedy retailers will be and, on past indications, they can be quick to capitalise on any opportunity to gouge motorists.

But that staunch defender of buyers’ rights, the Australian Competition and Consumer Commission (ACCC), will continue its ‘outstanding work’ in holding them to account, by “monitoring the market closely” to keep pressure on petrol retailers at this time. Thanks for nothing, ACCC.

Paul Murrell is a motoring writer and creator of seniordriveraus.com, which specialises in “car advice for people whose age and IQ are both over 50”. This article first appeared on seniordriveraus.com

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41 Comments

Total Comments: 41
  1. 0
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    Surely we are not being ripped off by oil companies? Imagine that.

  2. 0
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    Surely we are not being ripped off by oil companies? Imagine that.

  3. 0
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    It’s a pity we can’t bulk buy fuel.

    Nah the Govt says 20 to 30 days supply is all we need……

    Wait till our supply from overseas is blocked for whatever reason and then we will be at a standstill……. damn idiots we have in Govt Labor or Liberal it dont matter

  4. 0
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    Sure are getting ripped off. I am happy to name and Shame Shell service station as one of them. I saw the prices on Satruday but did not have my purse with me as i was working. I took my purse on Sunday to work, and bought 98 petrol for 121 less 4c. Then later I saw 98 for 101 at a different Petrol chain. I am really over the price gouging of Shell. I know my fault for going to them. Lesson learnt.

  5. 0
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    Of course they are ripping us off they have been getting away with it for decades, every long weekend every holiday,just about any excuse you can think of to put price up ,and all with the blessings of your friendly drongo bastard goverment.

    • 0
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      Oh hang on a minute the ACCC the watchdog said there are no collusions amongst Oil companies at all.

      Who ya gonna believe why ” Ghostbusters of course “

  6. 0
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    under 80 cents a litre here. Trouble is I am not using any!

    • 0
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      Same here mate, just a bit dearer. But cannot use any of it. Just take a photo of the advertised price and cry when the fuel is $2.05 after this crisis.

  7. 0
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    We are being ripped off all the time, The ACCC is a paper tiger since the gov’t a few years ago told the ACCC they have no power over the price of fuel, they can sit and watch all they like but they have no power.
    If it eggs or bread watch out but petrol”NO”.
    I questioned the ACCC at the time and they sent me an email stating that their hands are tied.
    Regarding the price of diesel, note that the diesel price is no where near petrol, the fact that diesel is cheaper to manufacture than petrol because it comes form the cracker earlier than more processed petrol makes no difference to the crooks that sell it.
    If you note that most emergency vehicles and much needed transport at this time are diesel its the reason they are keeping the price of diesel up higher than petrol.
    So they can profit on the captive audience. Highly immoral.
    On another note do not buy E10 fuel, false economy, the car uses more fuel for the Km traveled, itis useless in low mileage cars because it is hydroscopic, absorbs water, this is not good if your car is sitting around around during these times of no travel, fill the car with premium and keep it full. Other wise you will be up for repairs when it is over.
    Its cheaper to use a better quality fuel and better for your car.

  8. 0
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    Strange you can put people under house arrest which is for our own good but you can’t touch the oil companies.

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      Oh and dont forget they still pay NO TAXES to Australia, they are still writing off losses through their high powered accountants for years and years and our stupid ATO and GOVT lets em get away with it….

  9. 0
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    $1-19 here in Latrobe Tasmania today. are we getting ripped off? Big time. If the price of oil goes up, petrol goes up almost immediately. If it goes down you would hardly know for weeks if at all. Governments really need to look into this nonsense and gouging.

    • 0
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      I totally agree that we are being rorted on petrol prices, especially in regional Australia where there is less choice anyway or you have to consume more petrol to get to service stations.

  10. 0
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    Bunbury WA. Petrol gouging is at its best here.
    Price of petrol via Fuel Watch WA shows Harvey, a little town some 35kms from Bunbury at 90c/l, Brunswick only 17kms at 92c/l, Waterloo only 8kms from Bunbury 95c/l
    Bunbury 123.6/l. Go to Busselton some 50kms south of Bunbury 1.19/l. The fuel delivery truck has to go through Bunbury to get to Busselton. I ask you why is Bunbury dearer.
    18 months ago RAC in WA negotiated a 4c discount/l of fuel for members at SHELL SERVICE STATIONS in Bunbury. You guessed it the next week the SHELL SERVICE STATIONS put up the price by 4c/l. The deal with RAC meant diddle squat.
    There are two Shell Servos, One on the main Highway to Bunbury and the other on the way out of Bunbury.
    The whole saga has been going on since 1974.I advise anyone who is to come thro Bunbury to buy fuel before Bunbury. DO NOT BUY FUEL IN BUNBURY. Shell is not the only one who jacks up the price. Caltex Woolworths have 3 servos in Bunbury and keep the same price as Shell.
    Spokesman from Fuel Watch WA, on TV last week, had the gall to advise that the turnover is small for each Servo in Bunbury so when they buy Petrol at the higher price from the distributors they have to sell that before the next load arrives and tops up the U/G tanks so the price is high, HE FAILED to mention if the fuel comes in at a lower price the Servos still sell it at the high price until the next fill up to the U/G tanks then they reduce the price, way higher than any other country town nearby.
    I wish I could have the Job of the Fuel Watch WA mouth piece. SAY NOTHING, DO NOTHING and gets a big pay cheque.

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