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25c a litre for the Canberra petrol markup?

By johnboy 30 April 2013 49

petrol stations

The Canberra Times has a story on just how badly we’re being ripped off on petrol:

The price of petrol in Canberra was more than 25 cents higher than in Melbourne, and close to 25 cents higher than in Sydney over the past week, according to the latest fuel price update.

While price falls of 10 cents in Sydney to 130.8 cents a litre, and almost 6 cents in Melbourne to 128.1 cents contributed to another national slide of 3.6 cents to an average price of 137.9 cents, Canberra’s fuel remained steady, dropping just 0.2 cents to 154.0 cents per litre – the second most expensive capital city in the country.

CommSec Economist Savanth Sebastian said Canberra prices are most heavily influenced by competition and transportation considerations.

5 cents a litre I’ll give for transport.

The situation reminds me of the story about when John Dillinger was asked why he robbed banks:

“Because that’s where the money is”

I note the fuel economy of bicycles remains excellent.


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49 Responses to
25c a litre for the Canberra petrol markup?
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IrishPete 9:37 pm 01 May 13

WA has a very useful FuelWatch website. Why can’t we? The NRMA website is OK for Sydney, but NRMA ACT obviously isn’t interested.

IP

gooterz 7:40 pm 01 May 13

Could just get government run petrol stations,

Free land and just have a reasonable price. The other companies would either go out of business or drop their prices!

Basilbrush 4:48 pm 01 May 13

johnboy said :

Chief Minister Gallagher has blogged her exchanges with the ACCC on this matter.

If lack of competition is driving high prices one wonders what the ACCC is there for.

+1

Ian 4:01 pm 01 May 13

johnboy said :

Chief Minister Gallagher has blogged her exchanges with the ACCC on this matter.

If lack of competition is driving high prices one wonders what the ACCC is there for.

That was a waste of time. What would be more useful is Katy telling Wayne Swan and Penny Wong that they can easily make savings in useless activities like those of the ACCC Fuel Group and the Petrol Commissioner.

zorro29 11:12 am 01 May 13

since when is this new? we have seen NONE of the price drops for the last couple of years and all of the increases

petrol in all major cities (and most regional places near us) is much cheaper…total joke

and yes, 25-30c a L less in syd and melb…even more in bris thanks to fewer taxes on it

WhiteRabbit 10:31 am 01 May 13

is there a twitter hashtag for bestfuelprice in canberra or something?

HiddenDragon 10:39 pm 30 Apr 13

johnboy said :

Chief Minister Gallagher has blogged her exchanges with the ACCC on this matter.

If lack of competition is driving high prices one wonders what the ACCC is there for.

I’ve always thought that the ACCC has been like the three wise monkeys on this issue.

Frustrated 10:15 pm 30 Apr 13

Canberracanuck said :

Why shouldn’t the drivers of the ACT pay through the nose for their addiction? Prices are set at what the market will bear…the ACT was recently outed as having the highest automobile usage in the country, so why not use that fact to raise some much needed revenue? Much like cigarettes, the addict will pay whatever they must to get their fix. Sure, they’ll whinge, but they’ll pay. If you don’t like it, kick the habit.

That argument doesn’t wash either, taking into consideration the differences in populations in the capital cities.

We get ripped off, because of the Coles/Woolworths monopoly, and because our average income is in the mid $80k’s.

dpm 9:15 pm 30 Apr 13

johnboy said :

Chief Minister Gallagher has blogged her exchanges with the ACCC on this matter.

If lack of competition is driving high prices one wonders what the ACCC is there for.

Yep, they brushed her off with a standard form letter! Hahaha!

caf 8:59 pm 30 Apr 13

Dillinger denied ever saying that, it seems to have been made up by a journalist.

switch 8:15 pm 30 Apr 13

johnboy said :

If lack of competition is driving high prices one wonders what the ACCC is there for.

One has wondered that for a very long time now.

IrishPete 8:15 pm 30 Apr 13

bd84 said :

The lack of competition and transport costs are a load of bulls*** really. It’s 100% profiteering from all petrol companies simply because they can. There are a number of independent petrol sites around Canberra and Queanbeyan who have no interest in creating competition. Their prices are identical to the shell and caltex, as are the other companies such as 7eleven and BP.

If the shopping petrol dockets were inflating petrol prices, I don’t see any of the competition with a petrol price of 8c/L cheaper to reflect the margins. Banning them will do nothing for competition because the oil companies know that the can influence the price no matter what.

I think there are few suppliers, so the independents often get the petrol from the same source as the larger companies, who in fact ARE the suppliers (vertical integration is the term). The larger companies then “discount” the prices at their own stations, leaving the independents high and dry. Someone may know this situation more accurately than I do.

IP

Jivrashia 8:01 pm 30 Apr 13

johnboy said :

If lack of competition is driving high prices one wonders what the ACCC is there for.

I hate to be the party pooper here, but it just came to me… what is the cost of doing business here in Canberra?

Before I get flamed, let me say that I found it disturbing that I was able to fill up at 126.9c (118.9 after discount) in Liverpool, Sydney when I visited there last weekend.

But then how much does it cost to run a petrol station in Canberra.
For example, the McDonald in the Civic bus interchange is $250,000 p.a. to rent?
Not sure if that affects burger prices. (does it?)

So, without trying to side on the petroleum cartel (pfft, let’s not deny that it is a cartel), what is the comparative cost of selling petrol in Canberra?

FioBla 7:02 pm 30 Apr 13

Tetranitrate said :

Canberracanuck said :

Why shouldn’t the drivers of the ACT pay through the nose for their addiction? Prices are set at what the market will bear…the ACT was recently outed as having the highest automobile usage in the country, so why not use that fact to raise some much needed revenue? Much like cigarettes, the addict will pay whatever they must to get their fix. Sure, they’ll whinge, but they’ll pay. If you don’t like it, kick the habit.

That’s beyond retarded.

Higher use in a given region would tend toward lowing transport and storage costs per unit because of economies of scale, it would have exactly the opposite effect to what you claim.
That and with alcohol/tobacco it’s the government that gets all the yummy excise tax revenue, not you know… not so green multinational oil companies.

I do agree with one thing though – it would definitely be a positive move if the ACT government started slugging a 20 cent per liter excise on top of existing taxes on petrol sold within the ACT (not certain they could legally, but it’d be nice) since presumably companies are already charging as much as they reckon they can get away with, once it washed through the money would largely come from the monopoly rents. The fact that Queanbeyan is next door just makes it even better, because Qbn/Canberra prices would always have to be close-ish to parity – I reckon they’d actually have to absorb the bulk of such a tax.

i.e. higher demand = lower cost.

It follows that if each of us buys twice as much petrol as we do now, we could drop the prices even further. We could use the excess amounts to fertilise our lawns.

JimCharles 6:55 pm 30 Apr 13

johnboy said :

That would require you people to actually send us the data and a lot of work which wouldn’t make us any money.
So no.
Feel free to do it youselves though.

A bloke in the UK started a site, he did a deal with the fuel card companies and harvests their data each day.
1 million hits a month plus 7.5 million emails sent…must be making money somewhere.

Tetranitrate 6:22 pm 30 Apr 13

johnboy said :

Chief Minister Gallagher has blogged her exchanges with the ACCC on this matter.

If lack of competition is driving high prices one wonders what the ACCC is there for.

The ACCC is just worthless. Concentration of ownership has become a major problem all across the Australian economy over the course of the past decade and a half or so and nothing has been done.
Obvious examples include
-Big four banks (obviously)
-Centro/Westfield in shopping centers
-Woolworths/Westfarmers in both supermarkets, retail, petrol, ect.
There’s actually a really nasty effect in producer markets happening where the big players are able to get heavy discounts through their buying power, which is then made up for by producers by increasing their margins charged to everyone else. It’s exactly what happened in the USA with wallmart – which naturally makes the problem worse since 3rd party competitors then have it that much harder. If all the little IGA’s were actually able to pay the same or similar unit prices for goods that woolies/coles pay you’d probably find that they’re much leaner business – unfortunately it doesn’t matter how efficient you are when you’re heavily handicapped before you even start the race.

Same thing with tenants in shopping centers – the large anchor tenants pay much less rent per square meter than others, which means that smaller stores effectively cross-subsidize their larger competitors. Sh*t’s slowly starting to hit the fan with retail rents now though and the present situation won’t survive a recession – too little too late of course though.

Woolies/coles should never have been allowed to take over petrol retailing – those shop-a-dockets should have been stamped out the moment they started cropping up. Concentration of ownership in one sector has spread to others like some kind of cancer.
Now it’s too late and nothing less than legislative action by a determined government to forcibly break up these empires will make a difference.

bundah 6:14 pm 30 Apr 13

johnboy said :

Chief Minister Gallagher has blogged her exchanges with the ACCC on this matter.

If lack of competition is driving high prices one wonders what the ACCC is there for.

I recall that about two years ago the ACCC found no evidence of excessive profits in the Australian petrol industry.I also recall that price differences between Canberra and Sydney tended to fluctuate significantly with variations of 5 to 15 cents per litre,at times,so i’d say the petrol companies have bugger all to worry about.

johnboy 5:43 pm 30 Apr 13

Chief Minister Gallagher has blogged her exchanges with the ACCC on this matter.

If lack of competition is driving high prices one wonders what the ACCC is there for.

Tetranitrate 5:32 pm 30 Apr 13

PS: I’m not saying multinationals get excise tax revenue and know there’re existing taxes on petrol – but whereas with alcohol/ciggarettes there’s a pretty significant tax take, which has been ramped up over and over for some time, the excessive petrol prices in Canberra relative to elsewhere do not contribute to government revenue. It’s actually money being sucked right out of our region.

Tetranitrate 5:30 pm 30 Apr 13

Canberracanuck said :

Why shouldn’t the drivers of the ACT pay through the nose for their addiction? Prices are set at what the market will bear…the ACT was recently outed as having the highest automobile usage in the country, so why not use that fact to raise some much needed revenue? Much like cigarettes, the addict will pay whatever they must to get their fix. Sure, they’ll whinge, but they’ll pay. If you don’t like it, kick the habit.

That’s beyond retarded.

Higher use in a given region would tend toward lowing transport and storage costs per unit because of economies of scale, it would have exactly the opposite effect to what you claim.
That and with alcohol/tobacco it’s the government that gets all the yummy excise tax revenue, not you know… not so green multinational oil companies.

I do agree with one thing though – it would definitely be a positive move if the ACT government started slugging a 20 cent per liter excise on top of existing taxes on petrol sold within the ACT (not certain they could legally, but it’d be nice) since presumably companies are already charging as much as they reckon they can get away with, once it washed through the money would largely come from the monopoly rents. The fact that Queanbeyan is next door just makes it even better, because Qbn/Canberra prices would always have to be close-ish to parity – I reckon they’d actually have to absorb the bulk of such a tax.

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