PASS on the full cut!
It’s practically become a mantra in Australia. The question now is, will Malcolm Turnbull summon the CEOs of Coles and Woolies to appear before parliament for failing to “pass on the full cut” of lower petrol prices?
According to the consumer watchdog, service stations are gouging record margins from motorists despite petrol prices in Australia sitting at their lowest level in 14 years.
The Australian Competition and Consumer Commission’s latest report on the petroleum industry has found average petrol prices in 2015-16 were at their lowest levels since 2002.
At the same time, gross retail margins increased to their highest levels ever, indicating the full benefits of lower international oil prices are not being passed on to consumers.
In 2015-16, the average price for petrol in the five largest cities was 121.7 cents per litre, while gross retail margins averaged 11.2 cents per litre in the same period — the highest since the ACCC began monitoring prices in 2002.
“We remain concerned about the petroleum industry’s high gross retail margins, which indicate motorists are not reaping the full benefits of lower international crude oil and refined petrol prices,” ACCC chairman Rod Sims said in a statement.
“Bowser prices for motorists last year were the lowest they’ve been on average for 14 years, but this report suggests that in order for there to be more competitive pressure on retailers, consumers need to shop around and reward those offering the best-priced fuel.”
Mr Sims said increased transparency through real-time petrol price monitoring apps such as MotorMouth, which launched in May, put pressure on retailers to offer competitive prices.
“Some motorists have been quick to take advantage of these petrol price apps and are already using them to ensure they are getting the best price when they fill up,” he said.
“We encourage people who are concerned about petrol prices to take advantage of these apps. Motorists have the ability to drive competition in the fuel sector literally in their hands.”
NRMA spokesman Peter Khoury said the report showed prices “could have and should have been lower” in 2015-16, but the “hidden message” of the report was the gap between the independents and the majors.
“What the numbers don’t tell you is yes, retail margins are the highest on record, but those profits aren’t equally shared,” he said.
“Coles- and Woolworths-aligned retailers are consistently the most expensive, their profit margins are exorbitantly high, whereas by contrast the independents are the cheapest and their margins are much narrower.”
Mr Khoury said the major petrol retailers were “less concerned about competing” and more concerned about volume, whereas the independents “have the only option available which is to compete on price”.
“With every price cycle in the capital cities it’s consistently the independents who fall first and fall the hardest and are the last to put their prices back up,” he said.
2015-16 AVERAGE PETROL PRICES PER LITRE
• Sydney 120.8c
• Melbourne 120.8c
• Brisbane 124.7c
• Adelaide 120.3c
• Perth 122.0c
• Canberra 126.9c
• Hobart 130.2c
• Darwin 124.4c
Source: ACCC and Online