Petrol prices sky rocket

Australians all around the country are feeling the pinch at the pump this week due to the largest, weekly petrol price increase since September 2005. The average national price rose 6.3 cents to 144.9 cents a litre and has been attributed to fuel retailers recovering loses incurred in the discount cycle over the Christmas and New Year break.

The largest price increases were felt in capital cities around the country with Adelaide, Sydney, Brisbane and Melbourne prices increasing more than 9 cents per litre. Regional prices had been higher on average for the previous week which resulted in only a small price hike.

According to CBA economist Savanth Sebastian, the daily pump price over the last couple of weeks was actually below cost price and the retailers are now trying to claw back losses over the period.

Read more from The Age.

Either way, you pay

The retail sector in Australia has become very competitive over the last decade. You are likely to find two coffee shops within 50 metres of each other and one supermarket practically next door to another. Competition of this kind generally results in a win for consumers and these examples often result in more affordable priced coffee and select items on special in each supermarket which isn’t available in the other. Of course both of these sectors would closely study the prices of each other, but they are not hung up on matching the exact price point being offered.

The petroleum industry is a whole different story. Visit your local service station today and look at the prices. Now, drive five minutes down the road and the prices will be almost identical. Repeating this process a few days later will return similar results except the prices will have increased or decreased by a few cents.

It’s time for the Australian Competition and Consumer Commission (ACCC) to scrutinise and investigate the petroleum industry for its price matching and manipulation of price fluctuations. Consumers want consistency in the market which matches up against the price retailers are paying for the natural resource, not some fake ‘price cycle’ which the industry has created.

What do you think? Does the ACCC need to investigate the industry?