ACCC to keep an eye on petrol companies after gross retail margins hit their highest level.
Australia’s competition regulator is planning to scrutinise petrol companies for evidence of price gouging after gross retail margins hit a record level.
The Australian Competition and Consumer Commission’s (ACCC) latest report on petrol prices for 2015 found that consumers paid an average of 11.8 cents per litre more than the wholesale price in the September quarter.
Gross retail margins are the difference between prices at the bowser and wholesale prices, and the ACCC says the latest figure is the highest since monitoring began in 2002.
Petrol companies in Sydney and Brisbane were the main culprits, with the report showing both states had the highest margins of around 14 cents per litre.
“Gross retail margins in Sydney and Brisbane were 6 cents per litre higher than in Melbourne,” ACCC chairman Rod Sims says.
“In fact, margins in Brisbane have been consistently higher than in other major cities in recent years. We will be closely monitoring gross retail margins in the coming months, because high retail margins likely indicate increased profits of the petrol companies at the expense of motorists.”
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The report says the difference in prices between retail and wholesale for the September quarter is an increase of 1.3 cents per litre from the previous period and came at a time when the average price of fuel dipped.
The average price across Sydney, Melbourne, Brisbane, Adelaide and Perth was 133.2 cents per litre, the ACCC says, a 2.6 cents per litre fall from the June quarter.
“Retail prices did not fall by as much as international prices, in part due to a weaker Australian dollar,” Sims says.
“The exchange rate can have a huge impact on prices at the pump. For instance, if the AUD-USD exchange rate was at the same level as it was in January 2013 (USD 1.05), retail petrol prices in September 2015 would have been around 20 cents per litre lower.”
The difference between prices in regional locations and Australia’s cities increased significantly from less than 1 cent per litre in the June quarter to 5.3 cents per litre during the September quarter. Despite this, the rise is still lower than the peak differential of 17.6 cents per litre recorded in January.
“The very high differential we saw in late 2014 and early 2015 was a result of regional prices being slow to fall following large decreases in international prices,” Sims says.
“In contrast, the very low differential in June 2015 was due to prices in regional locations being slow to rise following a large rebound in international prices. We are now seeing the differential return to a point more in line with historical levels.”