Petrol prices across several capital cities jumped 10 cents a litre a few days before the long weekend that many states were set to enjoy – to $1.90 for premium fuel.
A resounding yes, but we just need to shop around, according to a review by the Australian Competition and Consumer Commission (ACCC), although it does admit motorists are paying about three cents a litre more for petrol than they should be.
Federal Treasurer Josh Frydenberg said yesterday the Government would consider any suggestions the consumer watchdog had to contain petrol prices.
"If they make any recommendations to government then, of course, we will favourably consider those,” Mr Frydenberg had told the Nine Network.
“What we understand about our petrol market is that it is driven to some extent by what happens overseas, with the Australian dollar, but also with global oil prices.
“But if companies here are ripping off consumers, then we will take action.”
Heard it all before?
ACCC chair Rod Sims explained the results of the review on radio on Monday. “The main issue is the overseas cost of crude oil, and the oil-producing nations controlling the supply of fuel,” adding that the ACCC was powerless to have any influence on those international factors.
But Mr Sims was more expansive on fuel taxes, which he described as complicated and confusing. Perhaps an area Mr Frydenberg and state governments could look into?
“You’ve got to ask why are we paying a fuel excise of 41 cents on top of the GST,” Mr Sims said. “And the complication there is [that] it’s there to fund the roads that governments build. But the link is so poor, you now have no idea whether this level of taxation is the right one or not.”
“Then you’ve got the fact that, in our view, margins are two to three cents a litre too high. That’s $400 to $600 million. That’s a lot of money for Australians.
“If we could just try to get some better road user charging, so motorists know as they pay money [that] it's actually going to build roads and they're not paying more than they should, that would be a good step. That’s 85 per cent of it.”
At the end of the day, the ACCC says petrol companies are doing nothing illegal.
“It’s not against the law for someone to overcharge for a good,” Mr Sims said.
“If I buy an apple off you for one dollar and then sell it to someone else for 10 bucks, that’s not against the law.”
He says consumers should shop around for the cheapest petrol and buy at the right time.
“When prices are at the bottom of the cycle, you’re probably getting petrol below cost. And when they’re at the top of the cycle, you’re getting ripped off big time,” he said.
Senior economist at the Australia Institute, Matt Grudnoff, said transport costs had been a significant driver of cost-of-living price increases in the past year. Driven by? You guessed it – petrol prices.
“If we look at automotive fuel prices over the last 20 or so years we can see that the recent rise is pushing prices towards all-time highs,” he said. “The lack of comment on this might be in part because electricity and house prices have become the new cost of living issues. But if petrol prices continue to rise then expect petrol prices to enter the political debate.”
Meanwhile, just shop around. Check the ACCC price watch data before filling up and investigate the petrol price apps in your state, such as FuelWatch and FuelCheck in NSW, to keep track of the pricing cycle.
Are you satisfied with the latest petrol price review by the ACCC? Are you happy with the Treasurer’s response? Are you diligent about filling up when prices are at their lowest?
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