Costco fuels petrol demand with more pumps at Majura Park

Michael Weaver 8 May 2020 26

The ACT Government is closely monitoring Canberra’s petrol prices to ensure consumers benefit from competition in the sector. Photo: File.

With petrol in Canberra currently down to its lowest price in many years, one of the cheapest service stations in the ACT says it is adding more pumps to meet increased demand.

Costco at Majura Park has long been one of the go-to service stations for the cheapest fuel in Canberra. It will temporarily close its existing pumps for about one month so it can install six new pumps.

Canberra Airport and Majura Park head of property Richard Snow said the fuel station upgrade reflects the demand of people in the ACT to find the best value petrol.

“Majura Park is known for having the most affordable petrol in Canberra and this expansion will help us continue that legacy,” said Mr Snow.

“We’re excited to see this upgrade completed and welcome even more people to Majura Park to enjoy all that the precinct has to offer for fuel and groceries, retail stores, and more.”

This week, ACT Chief Minister Andrew Barr threatened to legislate a maximum retail margin for retailers in the territory after many refused to drop the price of petrol in the ACT despite a drop in global oil prices.

According to PetrolSpy Australia, most pumps in the ACT have been selling E10 between 99 cents and 102 cents a litre. On 8 May, Costco at Majura Park was selling Canberra’s cheapest fuel at 86.9 cents for a litre of E10, while the most expensive was 102.6 cents per litre at the Caltex service station in Hume.

In comparison, the majority of retailers across the border in Queanbeyan and Jerrabomberra have prices sitting between 107 and 110 cents a litre.

While petrol prices have begun falling, a lack of competition in the sector is a concern for the ACT Government.

Last week, Chief Minister Barr said he had written to half a dozen retailers inviting them to open service stations in Canberra to help drive downward pressure on prices through increased competition. He said there is a lot more room for prices to fall.

“What I have put to the major fuel retailers is that the benchmark price for the Canberra market that would not see the government intervene is the Australian average price for fuel across the nation,” said Mr Barr.

“No-one is saying petrol retailers cannot make a profit. The issue here is the size of that profit and what we have seen during the past two weeks is that with this sort of government intervention we can bring those profit margins down to a sort of Australian industry standard.”

Former opposition leader and Belco Party candidate in the coming ACT election, Bill Stefaniak, cited the loss of the ACT’s fuel storage capacity as a missed opportunity for the Barr Government and the Liberal opposition to keep fuel prices down in Canberra.

Years ago, fuel trains came in from Sydney every day,” said Mr Stefaniak. “Dozens of tankers. The fuel was stored along the tracks at Fyshwick in vast fuel yards run by Mobil, Shell and BP. The fuel was trucked locally about Canberra and the region. Hundreds of local people had local jobs as a result.

“Canberra could once again be a regional storage hub for fuel, thus creating local jobs, giving us fuel security and some price security as well.”

Managing director of Costco, Patrick Noone, said demand for Costco’s fuel was so great they had no choice but to add more fuel pumps.

“The installation of six more pumps will ease congestion from large numbers of people who take advantage of Majura Park’s value petrol prices,” said Mr Noone.

“We’ve seen a great increase in demand for our fuel station offerings. We’re expanding our Costco Canberra fuel station so we can better serve our members and save them time, every time they fill up at Costco.”

Construction will temporarily close the existing pumps from Monday, 11 May until mid-June. Caltex at Majura Park and Canberra Airport will remain open to accommodate Costco members.

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26 Responses to Costco fuels petrol demand with more pumps at Majura Park
Zed Zulu Zed Zulu 5:04 pm 22 Jun 21

Myself and a few friends have recently experienced 100 km less per tank full on Costco’s fuel. I confronted the attendant and apparently approximately 2 months ago they changed their supplier from Mobile to another?
Has anyone else experienced the same affect?

grim123 grim123 5:56 pm 11 May 20

Would really love to know how diesel (the cheapest to refine, and most produced by volume fuel) was more expensive than premium unleaded today at Kippax 7/11. Was $1.25/L and premium98 was $1.15.

Blatant price gouging continues.

    Capital Retro Capital Retro 9:43 pm 11 May 20

    The diesel supplied to Canberra and the southern tablelands/Snowy region is a special anti-freezing blend so it costs more.

    JC JC 7:54 am 12 May 20

    Diesel Sold in Australia is no longer the cheapest to refine as to meet more modern envision standards it requires far more refining than it did in the past.

    In addition to that the bulk (60%) of our fuel is now imported in a refined state making easier for refiners to sell the dirty, cheaper diesel in other markets.

Leo Menssen Leo Menssen 3:26 pm 11 May 20

If you care about your car avoid E10 unless the manufacturer recommends it.

Matthew Soall Matthew Soall 1:30 pm 10 May 20

After hours at the fyshwick Mertro is 85c for e10

Chris Olsen Chris Olsen 9:46 pm 09 May 20

Prices will go up while they closed despite rock bottom oil prices.

    Ashley Wright Ashley Wright 10:55 pm 09 May 20

    Chris Olsen prices in Sydney have gone up this week even without a Costco service station closure. Most places selling 91 for between $1.15 and $1.30.

    In actual fact we whinge about the price here in Canberra compared to Sydney but no one ever notices the wide swings Sydney has. One week $0.85 next week $1.25. When you average Sydney out over a month or so the stable prices here are no where near as bad as made out.

    Chris Olsen Chris Olsen 7:51 am 10 May 20

    Yes Sydney swings in prices and tends to be much cheaper in somewhere like Campbeltown compared to the north shore but doesn’t change the fact we normally pay considerably more than Sydney overall.

    The only reason our prices are as cheap as they are here is because of Costco and without that competition rival stations will have no incentive to keep prices down.

    Justin Watson Justin Watson 11:31 am 10 May 20

    Chris Olsen The same reason fuel is more expensive in the North Shore is the same reason it is more expensive in Canberra. We complain about petrol prices, but very few people will make a change to their lifestyle and fuel purchasing habits, because they earn enough and are too lazy/unmotivated to do so. Areas of higher average income typically can be charged more because people won't change their habits. Same goes for banking, insurance etc etc. They rely on people not wanting to spend the time to save money.

    Chris Olsen Chris Olsen 11:56 am 10 May 20

    Justin Watson Geez way to over think things. I made a basic comment about fuel prices in Canberra, which has apparently turned into a discussion about people’s life styles and spending habits in Sydney.

Capital Retro Capital Retro 9:42 pm 09 May 20

For a lot of people in Canberra it’s a 40 km return trip to Costco so with total costs of running a car being about $1.00 a kilometre, who among those people is going to drive there to save $5.00?

It’s the same mentality as the guy who asked the grocer how much eggs were and when the grocer replied $5.00 a dozen or $3.00 a dozen if they a cracked the guy said “crack me a dozen”.

Alex Rea Alex Rea 9:35 pm 09 May 20

Petrol has been 20 C plus cheaper in mogo and Moruya for months. ATM 90c l.

Rainer Busacker Rainer Busacker 9:21 pm 09 May 20

If Costco can do it, why can't other servos do it. Greed?

    Chris Olsen Chris Olsen 9:47 pm 09 May 20

    Rainer Busacker Yep straight up greed, huge retail margins. With oil prices where they are, they should be all under 80c a litre.

    Ashley Wright Ashley Wright 10:51 pm 09 May 20

    Rainer Busacker Costco doesn’t make profit from petrol and they don’t make much profit from the stores either. Then I’ll of their profit from is from membership sales.

    Plus their operating costs are lower as they don’t have a service station shop to man etc.

    Janet Mulgrue Janet Mulgrue 8:43 am 10 May 20

    Ashley Wright but the $50 per year membership is cheap when you consider the savings on petrol

    Rainer Busacker Rainer Busacker 9:46 am 10 May 20

    Only problem is that the savings go to pay for the extra distance one has to travel to buy fuel 🤣🤣🤣🤣

    Ashley Wright Ashley Wright 9:47 am 10 May 20

    Janet Mulgrue wont disagree, though isn’t it $60?

    But the question was how does Costco sell so cheap and others don’t (to paraphrase).

    The answer is they sell more or less at cost. They don’t need to make a profit as they make a profit from memberships. And the other difference I didn’t mention above is they have high volume so again don’t need to make much on top of cost price.

    Rainer Busacker Rainer Busacker 9:52 am 10 May 20

    Ashley Wright I agree. But I don't think that membership is near enough to cover petrol discounts. Some of their in-store prices are not always comparative. Just like the big supermarkets, they have sacrificial sales and catch you on other products. So, why can't Coles Express and Woolies Plus step up and lover their prices.=== Greed

    Janet Mulgrue Janet Mulgrue 10:00 am 10 May 20

    Ashley Wright I have a business membership so $50. I think perhaps the reason for there lower prices is perhaps because of the quantity of products they sell and their relatively low overheads. The servo for instance has a huge turnover and one or two staff as its all self service. They are also located in a more out of the way location so again rent or land prices are less as are other overheads. People are prepared to travel because they get a good price.

    Ashley Wright Ashley Wright 10:11 am 10 May 20

    Rainer Busacker you are missing the point. The memberships are not covering the discounts, Costco is selling slightly above cost (I read about .25c /l) so there is nothing to cover. Eg they are not selling fuel at a loss nor are they making any significant profit. So memberships and sales in the main store end up being the profit. Though store profits are not that high either. Don’t believe me google Costco profits and you will see.

    And you mention Coles and Woolworths. You do realise that those two supermarkets no longer have anything to do with fuel sales?

    Woolworths branded stations were sold to an English company called EG well over a year ago and are slowly being rebranded. The only involvement Woolworths has with them now apart from the disappearing brand is EG accepts Woolworths vouchers (so too does Caltex) and Woolworths supplies their shops with food stuff.

    And Coles has nothing to do with the fuel side of things at Shell/Coles Express servos under a new agreement that started about 6 months ago. Viva who own the shell brand here (think they are owned by Shell) are the ones who set the fuel price, they then pay Coles a fixed fee per l to run the service station. Since The new agreement started Coles servos are a lot more competitive compares to when Coles sold the fuel themselves.

    Ashley Wright Ashley Wright 10:14 am 10 May 20

    Janet Mulgrue yep there are many reasons they are lower and normal servos higher. I didn’t mention quality as that is subjective but as you did Costco base fuel is the same as other servos, in NSW there are only a couple of suppliers of imported fuel anyway. The difference between the brands is the additives which are added as the base fuel is loaded into the tanker. But as mentioned the quality of that is subjective.

    Janet Mulgrue Janet Mulgrue 10:44 am 10 May 20

    Ashley Wright I bought my car new and have always used Costco 98 petrol and have been very happy with it

    Ashley Wright Ashley Wright 4:17 pm 10 May 20

    Janet Mulgrue As I said it’s all subjective. I’ve no doubt you will find some say the fuel is crap and they would never use it.

    Me personally I’ve never had an issue, but usually I fill up with 95 from 7Eleven using a litre quirk of the price lock function of their app which gives a great price.

Malcolm Roxburgh Malcolm Roxburgh 5:13 pm 09 May 20

I believe that COSTCO do not sell E10, the 86.9 cents per litre would be for normal unleaded fuel. That makes it even a bigger saving.

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