Quarterly petrol prices fall to lowest level in 17 years: ACCC
The competition regulator says petrol prices slid to their lowest quarterly level since 1999 during the first three months of this year.
- Low crude oil prices and decreasing gross retail margins contributed to fall in petrol prices
- ACCC will examine reasons for previously high petrol prices
- New apps allow consumers to compare petrol prices and find a bargain
The Australian Competition and Consumer Commission’s sixth quarterly report on the country’s petroleum industry shows the average price in the five largest cities (Sydney, Melbourne, Brisbane, Adelaide and Perth) was 111 cents per litre.
That was 13.4 cents per litre lower than in the December quarter of 2015, and 22.2 cents per litre cheaper than in the September quarter last year.
ACCC chairman Rod Sims said the low prices had been a boon for drivers.
“Motorists benefited from the lowest quarterly petrol prices in inflation-adjusted terms since 1999,” he said.
Mr Sims said the low petrol prices were due to two main influences.
“Crude oil prices and international refined petrol prices in inflation-adjusted terms fell to lows not seen since 2002 and 2008 respectively,” he said.
“Secondly, gross retail margins decreased in the quarter.
“The ACCC believed that retail margins were unreasonably high in the second half of 2015 and wrote to the major petrol retailers in early February 2016, seeking an explanation for the high retail margins,” Mr Sims continued.
The ACCC said the companies identified three main reasons for increased margins.
Firstly, there were time lags in the supply chain, when wholesale prices were falling.
Secondly, some retailers had expectations that wholesale prices would increase following a period of low prices, which limited discounting.
Thirdly, retailers faced higher operating and regulatory costs, which meant they required higher margins to operate a sustainable business.
The ACCC said it would analyse those issues in more depth in the months ahead.
Petrol price apps help drivers find cheapest prices
The report also noted that several petrol price apps were released during the March quarter, providing more information to consumers and helping them to find lower prices.
7-Eleven introduced its new mobile app in March, allowing customers to see their closest five 7-Eleven fuel retail sites, find the cheapest price, and lock that price in to redeem at any 7-Eleven petrol station in the country within seven days.
The GasBuddy mobile app, which also launched in Australia in March, is a crowd-sourcing app that allows motorists to report fuel prices and find the cheapest petrol in their area.
Mr Sims said those apps, as well as more that are set to launch this year, would help to better inform motorists.
“This will allow consumers to make better informed purchasing decisions and reward retailers who discount prices, therefore promoting greater price competition in petrol markets,” he said.
“This should also lead to downward pressure on retail margins.”