The Meeting Place

Why petrol prices are sky-rocketing

The annual average retail petrol price in 2018–19 was the highest in real terms (i.e. adjusted for inflation) in four years according to the ACCC’s latest report on the Australian petroleum market.

The report shows that in the five largest cities, Sydney, Melbourne, Brisbane, Adelaide and Perth, the average annual petrol price in 2018–19 was 141.2 cents per litre (cpl), nearly 7.0 cpl higher than last year. 

In nominal terms (i.e. with prices not adjusted for inflation) it was the highest annual average price in five years.

“The most significant contributor to this increase was the depreciation over the year in the AUD-USD exchange rate, which decreased by USD 0.06 to USD 0.72,” said ACCC Chair Rod Sims.

“This was the lowest annual average AUD-USD exchange rate in the last 15 years. The AUD–USD exchange rate is a significant determinant of Australia’s retail petrol prices because international refined petrol is bought and sold in US dollars in global markets.”

A significant development in the petrol industry in the first half of 2019 has been the change in price setter at both Coles Express, to Viva Energy, and Woolworths, to EG Group, retail sites.

The report found that compared with market average prices, Coles Express prices were lower in most capital cities after Viva Energy began setting prices. However, they remained above the market average price in all eight capital cities.

At Woolworths, prices were higher in most capital cities after EG Group took over the retail sites, although in the majority of cities, prices were still below the market average price.

“The ACCC will monitor prices at these retail sites very closely in future,” Mr Sims said.

Mr Sims said it was important for motorists to shop around for cheap fuel by using the available fuel price websites and apps. For those motorists in the five largest cities, they can also use information about petrol price cycles on the ACCC website to time their purchases.

Retail petrol prices in the three smaller capital cities; Canberra, Hobart and Darwin, are typically higher than prices in the five largest cities. However, the report noted that, in the first half of 2019, there were periods when prices in Darwin and Canberra were below prices in the five largest cities.

Monthly average retail prices in Darwin were lower than in the five largest cities between February and May 2019, and monthly average retail prices in Canberra were lower than in the five largest cities in both April and May 2019.

“This was the first time monthly average prices in Canberra were below the average price in the five largest cities since April 2012,” Mr Sims said. “The reduction in prices in the Darwin and Canberra is good news for motorists in those locations.”

The lower prices in Canberra may have been influenced by the possibility of greater regulation of the petroleum industry arising from the current ACT Legislative Assembly petrol inquiry.

The situation in Canberra is similar to that in Darwin in 2015, when the decrease in petrol prices coincided with increased local scrutiny of petrol prices by the NT Government.

Other petrol fast facts:

  • Brisbane petrol prices were higher than the other large Australian cities.
  • The city–country petrol price differential decreased in the quarter to 1.5 cpl.
  • Analysis of NSW’s Coffs Harbour petrol prices shows there are a range of prices available to motorists if they shop around.
  • Diesel and automotive LPG prices in the five largest cities both increased.

 

How have the high petrol prices affected your budget? Have they forced you to limit your car trips?

7 comments

I purchase my fuel on Tuesday or Wednesdays when for some unknown reason the petrol seems to be a lot cheaper ?? 

On Sundays, Mondays and long weekends it seems most expensive ???

Always use FuelCheck App

https://fuelcheck.nsw.gov.au/App/

Usually I have to travel some 5km to the next suburb to get the petrol 14 cents per litre cheaper.

 

By the time you hunt around to save a few dollars on cheaper petrol, you are indeed wasting more petrol and it's costing you more. Try public transport sometimes, stress free and cheaper.

Public transport may be OK in the  city but not so good in the country areas,

In NSW you do not have to hunt around as the Government has an internet site which tells you the cost of petrol at the different stations. (see link above)

As I mentioned above it is wise to plan when you fill up.

Public Transport - stress free??? You jest surely Banjo!

Public transport, Banjo? You must be joking! Recently when the trains shut down in Sydney for around 5 hrs due to one isolated incident (such failures being quite common on Sydney Trains since the pommie CEO took over) the CEO told commuters to "use alternative transport"!!!

BTW, in case you haven't realised, public transport is not door-to-door which many older people would like especially those with mobility issues, besides providing exposure to unacceptable smells and diseases.

Why is it then that the international oil price is currently about half what it was back in around 1980 ??  Who is ripping us off ??

You forget the high taxes including GST that is added today that wasn't in the '80s. There is also continuing higher demand and when there is high demand prices for crude go up.

 

 

johnp, who is ripping us off? Oil companies (encouraged by Howard by selling off our oil), Federal Govt's Excise Duty (which should have been removed when GST came in), and of course, the GST which keeps the States happy. Great example of the partnership between the foreign oil companies and our politicians.

Also, ACCC is a complete waste of time and taxpayers money - only does reporting, does not take any action.

 

The article conveniently ignores the Federal Government's $0.412 cents per litre fuel tax. In addition all fuels are subject to 10% GST.

Given the the average 2018/19 price per litre was 141.2 cents the fuel tax is in the order of 55 cents per litre. 

The article was entitles Why Fuel Prices are Rocketing ??

So Why ????

The article did not mention or explain why???

Just a lot of bumf.

I tend to ignore any statistics or detail from the ACCC because it is just trying to justify its position when, in truth, it has failed us miserably. We are told that fuel prices are affected by a number of factors including the barrel cost of Texas Crude when that benchmark has no relevance to the fuel we get from the Far East. The dollar fluctuations are always mentioned but fuel prices weren't much cheaper when the USD was on a parity with the AUD. We are told that it is a mere coincidence that fuel costs rise, sometimes as much as $0.20¢/litre, when long weekends, Easter, Christmas and school holidays come around. If all that the ACCC an offer is for motorists to shop around for cheap fuel then surely it is time for the ACCC to have a cleanout and new management installed.

Agree 100% Horace

Absolutely agree Horace!!

It still doesn't explain how a 6% reduction in the AUD value can cause a 38 cents per litre overnight increase!!

Well, thewizardoz, with a sobriquet like yours I would have thought the answer is clear. It's magic!

Every time I read anything trying to explain the petrol prices, all the articles describe all the things that happen with US Dollars, and prices and taxes , nothing ever tells you why , only what?

So what about the Singapore parity thing , don't ask me to explain that? Because I have no idea what it means. 

Another thing  not to ask me to describe is why on one given day that the pertol drops down to a lower level, haven't seen an oil tanker there for a week, so how's that work? Or it goes up. Well it works because prices are manipulated through some market and government taxes get a boost or a hit which ever the manipulation figures dictate. 

I have seen petrol go from 3 to 5 to 10 to 17 cents in a day, so take the 10 cent rise , for a 60 litre tank that $6 dollars addition to what you would have paid the day before?

It can be nothing but manipulation of prices, I don't believe it has anything in reality, to do with the market in the manner they say, market is a T.A.B. anyway.   What it feels like is insider trading?

Now we run the economy on profit and sales and industry that's our system, but petrol is becoming theivery ?

It gives every business the chance to up the prices because of transport costs, every one suffers . BUT the prices rarely drop back when the petrol price does.

Hits the pocket if you are someone where driving to work is a long distance. 

I believe people should be forced by law to carry at least one to three passengers and share the costs, if you "have" to drive to work

I would rather have a set price that never changes, so that even if its only a handful of dollars more or less at least you can budget for it. 

Public transport needs to be lifted in standard to near guaranteed perfect, lots of it and people who drive a  vehicle  to work alone must pay a weekly fee to drive on the roads with no sharers?

No governments  seem to have the courage in this country to enforce public transport useit is a waste. 

In WA on the train to the football a free service , the trains to the ground are chocka block there and back FREE. 

That should be happening every working day, but with a fee charged, wonder why that doesn't happen. 

It's because some people are making a killing out of petrol , thats ok . But  a manipulated gross over kill is not ok!

7 comments