How low will petrol prices go?

JimCharles said :

dungfungus said :

I went for a drive near the airport precinct yesterday and noted about 50 – 60 cars queued up at the Costco bowsers.
Seems to me to be false economy to drive a long way (which is almost anywhere in Canberra) to waste time to save for the sake of saving a few dollars when the real cost of running a car these days is about $1.00 per kilometre. It’s not rocket science.

It’s complete madness isn’t it? You’d think at the very least, they’d put it next to a massive superstore which they also own to act as a loss leader to drive and retain regular business.
Why hasn’t anybody thought of that eh !

You’d say its a loss leader if it weren’t for falling oil prices and similar pricing in Sydney. There is no doubt that we were being ripped off in Canberra, but we only have ourselves to blame, because everyone drives, the public transport system IMO isn’t convenient and too slow so I understand why everyone drives.

IMO you’d probably save more money though, buying cheaper to run cars rather than a large SUV for a family of 4. That said you still save a lot of money even if it takes an hour to drive to Majura to get your petrol. Many people though don’t value their time with a monetary value. That said its easy to combine a fuel run with a trip to the hardware store, groceries and Fyshwick and the city are not far away.
I’m encouraging people to do it, because the more that do, the more pressure will be on in the suburban stations to lower their price. I doubt they’d match it, but if petrol was say $1.10 at the local station, the savings of driving out to Majura are not there anymore. But while ever the difference is 20-30c it is cheaper for most vehicles to drive to Majura to get petrol.

I hope interested contributors of this thread have seen the latest price movements at majura.

Mysteryman said :

I think it’s important to make sure that these laws are strictly enforced especially for a product like petrol, which I would consider more closely related to other energy products like natural gas, electricity, or water, than to office supplies or stationery.

Simple fact is the government doesn’t regulate pertrol prices, unlike natural gas etc. So how you think of it is totally irrelevant.

dungfungus said :

I went for a drive near the airport precinct yesterday and noted about 50 – 60 cars queued up at the Costco bowsers.
Seems to me to be false economy to drive a long way (which is almost anywhere in Canberra) to waste time to save for the sake of saving a few dollars when the real cost of running a car these days is about $1.00 per kilometre. It’s not rocket science.

It’s complete madness isn’t it? You’d think at the very least, they’d put it next to a massive superstore which they also own to act as a loss leader to drive and retain regular business.
Why hasn’t anybody thought of that eh !

Holden Caulfield said :

Mysteryman said :

Now, did I say they were ripping us off *more* than any other retailer? I did not. So why you’re asking me to provide evidence of that, I don’t know. This thread is about the cost of fuel and that’s what I’m addressing.

You might consider ignoring a drop in the price of a commodity and continuing to charge the customers the inflated price to be ethical. I don’t. I consider that to be ripping people off.

I actually agree with you, for the most part.

I just don’t understand why a fuelco making whatever it is profit per litre outrages so many people when Officeworks or somesuch selling a pencil or an exercise book, whatever, with a 200% markup (or even more at times, I am guessing) goes through to the keeper?

What’s the acceptable amount of profit a fuelco can make per litre? When does it stop being an acceptable profit and when does it start to become a rip off? Are you suggesting, without saying it, that fuelco profits should be mandated by law?

How many pencils per kilometer does your transport method use? Petrol isn’t just a thing people buy for the heck of it. We NEED petrol to get from A to B, to work, school and shops. How about bringing a new bus service or taxi service into play and letting them change their fares on an hourly basis [not that taxis don’t already charge exorbitant fees after hours]. Aren’t they regulated as to how much they can charge? Taxi fares are regulated by the Independent Pricing and Regulatory Tribunal (IPART). ACTION fares appear to be under the A.C.T Government’s control. Why then is the only other transport alternative available not regulated by anybody but open to random pricing as the seller sees fit?
I’m over it, no point complaining because there is bugger all anybody can do about it anyway.
BTW, even in Tumut [reported recently as having the highest petrol price in N.S.W], the E10 is cheaper than anywhere in Belconnen. I did notice a 1c per liter drop today, woop-dee-doo!!

Bennop said :

dungfungus said :

Bennop said :

wildturkeycanoe said :

Bennop said :

wildturkeycanoe said :

I heard an interesting story about the cheap Costco fuel. The adjacent Woolworths servo drops its price to match Costco, but after the Costco shuts down for the night the Woolworths price goes back up to regular pricing again. Can anyone else verify this and if it is the case, how can it be legal to change your prices twice a day, simply because your competition is either open or closed? That, in my opinion, is a totally extortionist raping of Canberra drivers.

I can never figure out why people think things like this are offensive/illegal/extoriton. Isnt this exactly the compoetivive marketplace at work?

Would the same response apply if,
– Maccas raised their burger prices when KFC closed in the evening
– Kmart raised their prices after Target closed for the afternoon
– The late night chemist raised their cough medicine after 7PM
– The walk in clinic and E.D decided to charge you for after hours treatment because the rest of the surgeries were closed for the day

Competition is great, I encourage it. Monopolizing a market for certain hours of the day is not competition, it is a ridiculous grab for cash and is taking advantage. What other retail commodity do you buy where the price is displayed on an electronic billboard that can change at any time whatsoever [disregarding things like currency etc which isn’t something you buy over the counter]? How about the folks who are filling up whilst the price ticks over to the new figure or the poor guy behind who missed out by 30 seconds because the one in front took too long to fill up.

H.C. – “And as for the profit margins on fuel, why are petrol companies scrutinised and criticised so heavily when other brands so willing to exploit commercialism/capitalism, such as pretty much any fashion brand, seem to escape the ire of the public?”

How many fashion labels attract government taxes and surcharges in excess of 50%? The economics of petrol isn’t the same as any other product on the shelf. Obviously the government isn’t interested in the legalities here because it’s their own revenue source in question and they wouldn’t dare draw any more attention to the rip-off that it is.

Except, Woolies petrol is not monopolising the market. There are other petrol stations in Fyshwick, and Canberra that consumers can purchase from.

It may interest you to know that the (contract) law allows for the price of most normal retail items to be changed at any point during the day or night, without notification to the potential consumer (as long as no laws are borken eg discrimination, predatory pricing).

I don’t like the Woolies practise, but that is why I can vote/express my disastisfaction with my wallet.

I think your health care examples aren’t within the same scope as they are extremely regulated industries, that consumers purchase from when under duress, with limited options.

I think you will find airlines practice similar activities. When one airline lowers its prices/has a sale, the competitor does the same, until the prices change, and then they follow suit.

And I think it is worth considering that what has happened here is that one majura park petrol retailer used to have a monopoly. A competitor arrived, and now they have had to lower their prices when that competitor is open, to stay competitive. And we are framing this as a “bad” thing? I think thats a bit precious.

Well, it’s a bad thing because Costco is being predatory in just the way Woolworths has been.
The difference is that your super fund probably has invested in Woolworths and their price reductions to meet competition will be reflected in lower returns to your retirement fund.
Costco is one of those overseas based multinationals that pay little tax in Australia, the same as that flat pack place soon to open across the road from Costco.
You mentioned airlines. Do some research as to the future of Australian owned airlines because the same thing is happening there.

I can’t see how Cost-co is executing predatory pricing at Majura park, when the only people who can buy their petrol are members of the cost-co “club”. Two intersecting, but different target markets.

Not sure what you are talking about re airlines.

To get a 4c a litre discount at a Woolworths service station you have to have shopped at Woolworths. This is the same principle as having a Costco membership.
The target market is “us” – they all want our money.
Costco an Aldi are only scratching the surface in Australia – Walmart is soon to arrive.
Re what’s happening to the airline industry, read the story at this link:
http://www.smh.com.au/business/danger-in-throwing-open-door-to-foreign-airlines-20150112-12m9le.html

Holden Caulfield said :

Mysteryman said :

Now, did I say they were ripping us off *more* than any other retailer? I did not. So why you’re asking me to provide evidence of that, I don’t know. This thread is about the cost of fuel and that’s what I’m addressing.

You might consider ignoring a drop in the price of a commodity and continuing to charge the customers the inflated price to be ethical. I don’t. I consider that to be ripping people off.

I actually agree with you, for the most part.

I just don’t understand why a fuelco making whatever it is profit per litre outrages so many people when Officeworks or somesuch selling a pencil or an exercise book, whatever, with a 200% markup (or even more at times, I am guessing) goes through to the keeper?

What’s the acceptable amount of profit a fuelco can make per litre? When does it stop being an acceptable profit and when does it start to become a rip off? Are you suggesting, without saying it, that fuelco profits should be mandated by law?

I suggested no such thing. We have laws that prohibit certain profiteering practices as well as price fixing/collusion. I think it’s important to make sure that these laws are strictly enforced especially for a product like petrol, which I would consider more closely related to other energy products like natural gas, electricity, or water, than to office supplies or stationery.

dungfungus said :

rosscoact said :

dungfungus said :

rosscoact said :

dungfungus said :

Does your car levitate? (you didn’t mention the cost of tyres).
Of course the trip is justified if you have other business to attend to in the area but I think you are way off estimating the real cost of running a car.
Data published by the RACV shows annual running costs for a new medium-sized car that travels 15,000kms a year is $10,660 when you include petrol, servicing, insurance, interest payments, maintenance, registration, tax and lost resale value (depreciation). A large SUV comes in at an eye-watering $19,240 a year.
There were plenty of SUVs in the petrol line at Costco – they cost $1.28 per km to run.

However, the cost of registration and interest payments would be the same if the car was sitting in the garage, the cost of insurance and resale value is only marginally effected by the mileage. The latter is one of the biggest costs in total cost of ownership.

Therefore the actual cost of driving out there, as opposed to not, would be cost of fuel say $0.10 + say $0.02 for tyre wear ($200×4/40000), cost of servicing $0.02 ($350/15000) so $0.14 per k is pretty close to the incurred cost. Of course, your mileage may vary

Here we go again with another hair-splitting analysis which is so common on this blog.
So, let’s assume that the person that wants the cheap petrol at Costco leaves his car at home, in the garage and walks to Costco and back carrying 2 x 20L jerrycans. He has really hit the jackpot by avoiding those other costs, hasn’t he?.

Ah, I see. You can lead a horse to facts but you can’t make it think. I should have been plainer. You were completely wrong in what you said and I proved it.

Carry on.

” You can lead a horse to facts but you can’t make it think.”
Source?

😀

Mysteryman said :

Now, did I say they were ripping us off *more* than any other retailer? I did not. So why you’re asking me to provide evidence of that, I don’t know. This thread is about the cost of fuel and that’s what I’m addressing.

You might consider ignoring a drop in the price of a commodity and continuing to charge the customers the inflated price to be ethical. I don’t. I consider that to be ripping people off.

I actually agree with you, for the most part.

I just don’t understand why a fuelco making whatever it is profit per litre outrages so many people when Officeworks or somesuch selling a pencil or an exercise book, whatever, with a 200% markup (or even more at times, I am guessing) goes through to the keeper?

What’s the acceptable amount of profit a fuelco can make per litre? When does it stop being an acceptable profit and when does it start to become a rip off? Are you suggesting, without saying it, that fuelco profits should be mandated by law?

Mysteryman said :

Holden Caulfield said :

Mysteryman said :

I also don’t mind the 5 – 10 minute wait to get to a bowser. Ninety percent of the time I’d rather the wait than give my money to one of the other petrol station operators who I feel are blatantly ripping Canberrans off. Consider it a reasonably convenient form of protest.

What evidence do you have that petrol station operators are “blatantly ripping Canberrans off” any worse than any other retailer you deal with while paying the asking price for their products without giving it a second thought?

Point being, petrol station operators may well be ripping people off, or they could just be trying to maximise their profits; because capitalism.

Why are blind to so many other retailers who blatantly rip us off more than any fuelco would dare dream?!

What evidence do you want? Canberra typically sits slightly higher on the scale of per-litre fuel costs than other major cities. That’s common knowledge. Now, other cities, including those in rural and more remote areas are dropping their prices substantially and still making a profit, while in the ACT petrol prices have hardly moved. It’s been noticed by news publications, motoring bodies, and the average driver who traveled elsewhere over Christmas to discover that fuel in nearly every other town or city is markedly cheaper than here. I don’t need to provide links to graphs and charts to spell it out for you, do I?

Now, did I say they were ripping us off *more* than any other retailer? I did not. So why you’re asking me to provide evidence of that, I don’t know. This thread is about the cost of fuel and that’s what I’m addressing.

You might consider ignoring a drop in the price of a commodity and continuing to charge the customers the inflated price to be ethical. I don’t. I consider that to be ripping people off.

Except, your statements are incorrect it has moved. I will provide the graphs

http://www.aip.com.au/pricing/retail/ulp/index.htm

Bennop said :

And I think it is worth considering that what has happened here is that one majura park petrol retailer used to have a monopoly. A competitor arrived, and now they have had to lower their prices when that competitor is open, to stay competitive. And we are framing this as a “bad” thing? I think thats a bit precious.

Don’t you know, capitalism is only good when businesses can rip people off. Not when consumers vote with their wallets. Giving power to the little people is bad, bad bad… At least according to the people in this thread.

Holden Caulfield said :

Mysteryman said :

I also don’t mind the 5 – 10 minute wait to get to a bowser. Ninety percent of the time I’d rather the wait than give my money to one of the other petrol station operators who I feel are blatantly ripping Canberrans off. Consider it a reasonably convenient form of protest.

What evidence do you have that petrol station operators are “blatantly ripping Canberrans off” any worse than any other retailer you deal with while paying the asking price for their products without giving it a second thought?

Point being, petrol station operators may well be ripping people off, or they could just be trying to maximise their profits; because capitalism.

Why are blind to so many other retailers who blatantly rip us off more than any fuelco would dare dream?!

What evidence do you want? Canberra typically sits slightly higher on the scale of per-litre fuel costs than other major cities. That’s common knowledge. Now, other cities, including those in rural and more remote areas are dropping their prices substantially and still making a profit, while in the ACT petrol prices have hardly moved. It’s been noticed by news publications, motoring bodies, and the average driver who traveled elsewhere over Christmas to discover that fuel in nearly every other town or city is markedly cheaper than here. I don’t need to provide links to graphs and charts to spell it out for you, do I?

Now, did I say they were ripping us off *more* than any other retailer? I did not. So why you’re asking me to provide evidence of that, I don’t know. This thread is about the cost of fuel and that’s what I’m addressing.

You might consider ignoring a drop in the price of a commodity and continuing to charge the customers the inflated price to be ethical. I don’t. I consider that to be ripping people off.

rosscoact said :

dungfungus said :

rosscoact said :

dungfungus said :

Does your car levitate? (you didn’t mention the cost of tyres).
Of course the trip is justified if you have other business to attend to in the area but I think you are way off estimating the real cost of running a car.
Data published by the RACV shows annual running costs for a new medium-sized car that travels 15,000kms a year is $10,660 when you include petrol, servicing, insurance, interest payments, maintenance, registration, tax and lost resale value (depreciation). A large SUV comes in at an eye-watering $19,240 a year.
There were plenty of SUVs in the petrol line at Costco – they cost $1.28 per km to run.

However, the cost of registration and interest payments would be the same if the car was sitting in the garage, the cost of insurance and resale value is only marginally effected by the mileage. The latter is one of the biggest costs in total cost of ownership.

Therefore the actual cost of driving out there, as opposed to not, would be cost of fuel say $0.10 + say $0.02 for tyre wear ($200×4/40000), cost of servicing $0.02 ($350/15000) so $0.14 per k is pretty close to the incurred cost. Of course, your mileage may vary

Here we go again with another hair-splitting analysis which is so common on this blog.
So, let’s assume that the person that wants the cheap petrol at Costco leaves his car at home, in the garage and walks to Costco and back carrying 2 x 20L jerrycans. He has really hit the jackpot by avoiding those other costs, hasn’t he?.

Ah, I see. You can lead a horse to facts but you can’t make it think. I should have been plainer. You were completely wrong in what you said and I proved it.

Carry on.

” You can lead a horse to facts but you can’t make it think.”
Source?

dungfungus said :

Bennop said :

wildturkeycanoe said :

Bennop said :

wildturkeycanoe said :

I heard an interesting story about the cheap Costco fuel. The adjacent Woolworths servo drops its price to match Costco, but after the Costco shuts down for the night the Woolworths price goes back up to regular pricing again. Can anyone else verify this and if it is the case, how can it be legal to change your prices twice a day, simply because your competition is either open or closed? That, in my opinion, is a totally extortionist raping of Canberra drivers.

I can never figure out why people think things like this are offensive/illegal/extoriton. Isnt this exactly the compoetivive marketplace at work?

Would the same response apply if,
– Maccas raised their burger prices when KFC closed in the evening
– Kmart raised their prices after Target closed for the afternoon
– The late night chemist raised their cough medicine after 7PM
– The walk in clinic and E.D decided to charge you for after hours treatment because the rest of the surgeries were closed for the day

Competition is great, I encourage it. Monopolizing a market for certain hours of the day is not competition, it is a ridiculous grab for cash and is taking advantage. What other retail commodity do you buy where the price is displayed on an electronic billboard that can change at any time whatsoever [disregarding things like currency etc which isn’t something you buy over the counter]? How about the folks who are filling up whilst the price ticks over to the new figure or the poor guy behind who missed out by 30 seconds because the one in front took too long to fill up.

H.C. – “And as for the profit margins on fuel, why are petrol companies scrutinised and criticised so heavily when other brands so willing to exploit commercialism/capitalism, such as pretty much any fashion brand, seem to escape the ire of the public?”

How many fashion labels attract government taxes and surcharges in excess of 50%? The economics of petrol isn’t the same as any other product on the shelf. Obviously the government isn’t interested in the legalities here because it’s their own revenue source in question and they wouldn’t dare draw any more attention to the rip-off that it is.

Except, Woolies petrol is not monopolising the market. There are other petrol stations in Fyshwick, and Canberra that consumers can purchase from.

It may interest you to know that the (contract) law allows for the price of most normal retail items to be changed at any point during the day or night, without notification to the potential consumer (as long as no laws are borken eg discrimination, predatory pricing).

I don’t like the Woolies practise, but that is why I can vote/express my disastisfaction with my wallet.

I think your health care examples aren’t within the same scope as they are extremely regulated industries, that consumers purchase from when under duress, with limited options.

I think you will find airlines practice similar activities. When one airline lowers its prices/has a sale, the competitor does the same, until the prices change, and then they follow suit.

And I think it is worth considering that what has happened here is that one majura park petrol retailer used to have a monopoly. A competitor arrived, and now they have had to lower their prices when that competitor is open, to stay competitive. And we are framing this as a “bad” thing? I think thats a bit precious.

Well, it’s a bad thing because Costco is being predatory in just the way Woolworths has been.
The difference is that your super fund probably has invested in Woolworths and their price reductions to meet competition will be reflected in lower returns to your retirement fund.
Costco is one of those overseas based multinationals that pay little tax in Australia, the same as that flat pack place soon to open across the road from Costco.
You mentioned airlines. Do some research as to the future of Australian owned airlines because the same thing is happening there.

I can’t see how Cost-co is executing predatory pricing at Majura park, when the only people who can buy their petrol are members of the cost-co “club”. Two intersecting, but different target markets.

Not sure what you are talking about re airlines.

Bennop said :

wildturkeycanoe said :

Bennop said :

wildturkeycanoe said :

I heard an interesting story about the cheap Costco fuel. The adjacent Woolworths servo drops its price to match Costco, but after the Costco shuts down for the night the Woolworths price goes back up to regular pricing again. Can anyone else verify this and if it is the case, how can it be legal to change your prices twice a day, simply because your competition is either open or closed? That, in my opinion, is a totally extortionist raping of Canberra drivers.

I can never figure out why people think things like this are offensive/illegal/extoriton. Isnt this exactly the compoetivive marketplace at work?

Would the same response apply if,
– Maccas raised their burger prices when KFC closed in the evening
– Kmart raised their prices after Target closed for the afternoon
– The late night chemist raised their cough medicine after 7PM
– The walk in clinic and E.D decided to charge you for after hours treatment because the rest of the surgeries were closed for the day

Competition is great, I encourage it. Monopolizing a market for certain hours of the day is not competition, it is a ridiculous grab for cash and is taking advantage. What other retail commodity do you buy where the price is displayed on an electronic billboard that can change at any time whatsoever [disregarding things like currency etc which isn’t something you buy over the counter]? How about the folks who are filling up whilst the price ticks over to the new figure or the poor guy behind who missed out by 30 seconds because the one in front took too long to fill up.

H.C. – “And as for the profit margins on fuel, why are petrol companies scrutinised and criticised so heavily when other brands so willing to exploit commercialism/capitalism, such as pretty much any fashion brand, seem to escape the ire of the public?”

How many fashion labels attract government taxes and surcharges in excess of 50%? The economics of petrol isn’t the same as any other product on the shelf. Obviously the government isn’t interested in the legalities here because it’s their own revenue source in question and they wouldn’t dare draw any more attention to the rip-off that it is.

Except, Woolies petrol is not monopolising the market. There are other petrol stations in Fyshwick, and Canberra that consumers can purchase from.

It may interest you to know that the (contract) law allows for the price of most normal retail items to be changed at any point during the day or night, without notification to the potential consumer (as long as no laws are borken eg discrimination, predatory pricing).

I don’t like the Woolies practise, but that is why I can vote/express my disastisfaction with my wallet.

I think your health care examples aren’t within the same scope as they are extremely regulated industries, that consumers purchase from when under duress, with limited options.

I think you will find airlines practice similar activities. When one airline lowers its prices/has a sale, the competitor does the same, until the prices change, and then they follow suit.

And I think it is worth considering that what has happened here is that one majura park petrol retailer used to have a monopoly. A competitor arrived, and now they have had to lower their prices when that competitor is open, to stay competitive. And we are framing this as a “bad” thing? I think thats a bit precious.

Well, it’s a bad thing because Costco is being predatory in just the way Woolworths has been.
The difference is that your super fund probably has invested in Woolworths and their price reductions to meet competition will be reflected in lower returns to your retirement fund.
Costco is one of those overseas based multinationals that pay little tax in Australia, the same as that flat pack place soon to open across the road from Costco.
You mentioned airlines. Do some research as to the future of Australian owned airlines because the same thing is happening there.

wildturkeycanoe said :

Bennop said :

wildturkeycanoe said :

I heard an interesting story about the cheap Costco fuel. The adjacent Woolworths servo drops its price to match Costco, but after the Costco shuts down for the night the Woolworths price goes back up to regular pricing again. Can anyone else verify this and if it is the case, how can it be legal to change your prices twice a day, simply because your competition is either open or closed? That, in my opinion, is a totally extortionist raping of Canberra drivers.

I can never figure out why people think things like this are offensive/illegal/extoriton. Isnt this exactly the compoetivive marketplace at work?

Would the same response apply if,
– Maccas raised their burger prices when KFC closed in the evening
– Kmart raised their prices after Target closed for the afternoon
– The late night chemist raised their cough medicine after 7PM
– The walk in clinic and E.D decided to charge you for after hours treatment because the rest of the surgeries were closed for the day

Competition is great, I encourage it. Monopolizing a market for certain hours of the day is not competition, it is a ridiculous grab for cash and is taking advantage. What other retail commodity do you buy where the price is displayed on an electronic billboard that can change at any time whatsoever [disregarding things like currency etc which isn’t something you buy over the counter]? How about the folks who are filling up whilst the price ticks over to the new figure or the poor guy behind who missed out by 30 seconds because the one in front took too long to fill up.

H.C. – “And as for the profit margins on fuel, why are petrol companies scrutinised and criticised so heavily when other brands so willing to exploit commercialism/capitalism, such as pretty much any fashion brand, seem to escape the ire of the public?”

How many fashion labels attract government taxes and surcharges in excess of 50%? The economics of petrol isn’t the same as any other product on the shelf. Obviously the government isn’t interested in the legalities here because it’s their own revenue source in question and they wouldn’t dare draw any more attention to the rip-off that it is.

Except, Woolies petrol is not monopolising the market. There are other petrol stations in Fyshwick, and Canberra that consumers can purchase from.

It may interest you to know that the (contract) law allows for the price of most normal retail items to be changed at any point during the day or night, without notification to the potential consumer (as long as no laws are borken eg discrimination, predatory pricing).

I don’t like the Woolies practise, but that is why I can vote/express my disastisfaction with my wallet.

I think your health care examples aren’t within the same scope as they are extremely regulated industries, that consumers purchase from when under duress, with limited options.

I think you will find airlines practice similar activities. When one airline lowers its prices/has a sale, the competitor does the same, until the prices change, and then they follow suit.

And I think it is worth considering that what has happened here is that one majura park petrol retailer used to have a monopoly. A competitor arrived, and now they have had to lower their prices when that competitor is open, to stay competitive. And we are framing this as a “bad” thing? I think thats a bit precious.

Bennop said :

wildturkeycanoe said :

I heard an interesting story about the cheap Costco fuel. The adjacent Woolworths servo drops its price to match Costco, but after the Costco shuts down for the night the Woolworths price goes back up to regular pricing again. Can anyone else verify this and if it is the case, how can it be legal to change your prices twice a day, simply because your competition is either open or closed? That, in my opinion, is a totally extortionist raping of Canberra drivers.

I can never figure out why people think things like this are offensive/illegal/extoriton. Isnt this exactly the compoetivive marketplace at work?

Would the same response apply if,
– Maccas raised their burger prices when KFC closed in the evening
– Kmart raised their prices after Target closed for the afternoon
– The late night chemist raised their cough medicine after 7PM
– The walk in clinic and E.D decided to charge you for after hours treatment because the rest of the surgeries were closed for the day

Competition is great, I encourage it. Monopolizing a market for certain hours of the day is not competition, it is a ridiculous grab for cash and is taking advantage. What other retail commodity do you buy where the price is displayed on an electronic billboard that can change at any time whatsoever [disregarding things like currency etc which isn’t something you buy over the counter]? How about the folks who are filling up whilst the price ticks over to the new figure or the poor guy behind who missed out by 30 seconds because the one in front took too long to fill up.

H.C. – “And as for the profit margins on fuel, why are petrol companies scrutinised and criticised so heavily when other brands so willing to exploit commercialism/capitalism, such as pretty much any fashion brand, seem to escape the ire of the public?”

How many fashion labels attract government taxes and surcharges in excess of 50%? The economics of petrol isn’t the same as any other product on the shelf. Obviously the government isn’t interested in the legalities here because it’s their own revenue source in question and they wouldn’t dare draw any more attention to the rip-off that it is.

dungfungus said :

rosscoact said :

dungfungus said :

Does your car levitate? (you didn’t mention the cost of tyres).
Of course the trip is justified if you have other business to attend to in the area but I think you are way off estimating the real cost of running a car.
Data published by the RACV shows annual running costs for a new medium-sized car that travels 15,000kms a year is $10,660 when you include petrol, servicing, insurance, interest payments, maintenance, registration, tax and lost resale value (depreciation). A large SUV comes in at an eye-watering $19,240 a year.
There were plenty of SUVs in the petrol line at Costco – they cost $1.28 per km to run.

However, the cost of registration and interest payments would be the same if the car was sitting in the garage, the cost of insurance and resale value is only marginally effected by the mileage. The latter is one of the biggest costs in total cost of ownership.

Therefore the actual cost of driving out there, as opposed to not, would be cost of fuel say $0.10 + say $0.02 for tyre wear ($200×4/40000), cost of servicing $0.02 ($350/15000) so $0.14 per k is pretty close to the incurred cost. Of course, your mileage may vary

Here we go again with another hair-splitting analysis which is so common on this blog.
So, let’s assume that the person that wants the cheap petrol at Costco leaves his car at home, in the garage and walks to Costco and back carrying 2 x 20L jerrycans. He has really hit the jackpot by avoiding those other costs, hasn’t he?.

Ah, I see. You can lead a horse to facts but you can’t make it think. I should have been plainer. You were completely wrong in what you said and I proved it.

Carry on.

Mysteryman said :

I also don’t mind the 5 – 10 minute wait to get to a bowser. Ninety percent of the time I’d rather the wait than give my money to one of the other petrol station operators who I feel are blatantly ripping Canberrans off. Consider it a reasonably convenient form of protest.

What evidence do you have that petrol station operators are “blatantly ripping Canberrans off” any worse than any other retailer you deal with while paying the asking price for their products without giving it a second thought?

Point being, petrol station operators may well be ripping people off, or they could just be trying to maximise their profits; because capitalism.

Why are blind to so many other retailers who blatantly rip us off more than any fuelco would dare dream?!

rosscoact said :

dungfungus said :

Does your car levitate? (you didn’t mention the cost of tyres).
Of course the trip is justified if you have other business to attend to in the area but I think you are way off estimating the real cost of running a car.
Data published by the RACV shows annual running costs for a new medium-sized car that travels 15,000kms a year is $10,660 when you include petrol, servicing, insurance, interest payments, maintenance, registration, tax and lost resale value (depreciation). A large SUV comes in at an eye-watering $19,240 a year.
There were plenty of SUVs in the petrol line at Costco – they cost $1.28 per km to run.

However, the cost of registration and interest payments would be the same if the car was sitting in the garage, the cost of insurance and resale value is only marginally effected by the mileage. The latter is one of the biggest costs in total cost of ownership.

Therefore the actual cost of driving out there, as opposed to not, would be cost of fuel say $0.10 + say $0.02 for tyre wear ($200×4/40000), cost of servicing $0.02 ($350/15000) so $0.14 per k is pretty close to the incurred cost. Of course, your mileage may vary

Here we go again with another hair-splitting analysis which is so common on this blog.
So, let’s assume that the person that wants the cheap petrol at Costco leaves his car at home, in the garage and walks to Costco and back carrying 2 x 20L jerrycans. He has really hit the jackpot by avoiding those other costs, hasn’t he?.

dungfungus said :

Does your car levitate? (you didn’t mention the cost of tyres).
Of course the trip is justified if you have other business to attend to in the area but I think you are way off estimating the real cost of running a car.
Data published by the RACV shows annual running costs for a new medium-sized car that travels 15,000kms a year is $10,660 when you include petrol, servicing, insurance, interest payments, maintenance, registration, tax and lost resale value (depreciation). A large SUV comes in at an eye-watering $19,240 a year.
There were plenty of SUVs in the petrol line at Costco – they cost $1.28 per km to run.

However, the cost of registration and interest payments would be the same if the car was sitting in the garage, the cost of insurance and resale value is only marginally effected by the mileage. The latter is one of the biggest costs in total cost of ownership.

Therefore the actual cost of driving out there, as opposed to not, would be cost of fuel say $0.10 + say $0.02 for tyre wear ($200×4/40000), cost of servicing $0.02 ($350/15000) so $0.14 per k is pretty close to the incurred cost. Of course, your mileage may vary

Mysteryman said :

dungfungus said :

I went for a drive near the airport precinct yesterday and noted about 50 – 60 cars queued up at the Costco bowsers.
Seems to me to be false economy to drive a long way (which is almost anywhere in Canberra) to waste time to save for the sake of saving a few dollars when the real cost of running a car these days is about $1.00 per kilometre. It’s not rocket science.
Of concern was the number of once colouful nursery associated businesses in Pialligo that have closed. The ones that are still there were not attracting many customers either.
I feel for the retailers that are going to be displaced by IKEA. This is not my idea of a “vibrant” city.

My actual cost per km for fuel is roughly $0.14. So the trip out to Majura from my house would cost me about $2.30 in petrol, and the same to get home. But of course I would do other things on that trip, like shopping, which has to be done anyway. The rest of your “$1 per km” figure is debatable, considering my registration costs are fixed per year regardless of the distance travelled, and my servicing costs are low since I service the car myself.

For the nearly $18 saving per tank of fuel, it’s well worth the trip since I regularly find myself within 10km or less from Majura, and use the excursion to take care of other business that needs doing.

I also don’t mind the 5 – 10 minute wait to get to a bowser. Ninety percent of the time I’d rather the wait than give my money to one of the other petrol station operators who I feel are blatantly ripping Canberrans off. Consider it a reasonably convenient form of protest.

Does your car levitate? (you didn’t mention the cost of tyres).
Of course the trip is justified if you have other business to attend to in the area but I think you are way off estimating the real cost of running a car.
Data published by the RACV shows annual running costs for a new medium-sized car that travels 15,000kms a year is $10,660 when you include petrol, servicing, insurance, interest payments, maintenance, registration, tax and lost resale value (depreciation). A large SUV comes in at an eye-watering $19,240 a year.
There were plenty of SUVs in the petrol line at Costco – they cost $1.28 per km to run.

shirty_bear said :

watto23 said :

I’ve taken fuel prices and parking fees into my own hands and got my motorcycle license.

Fuel prices, parking fees, and your life in your hands.
I used to get around this town on a motorbike. No more. Seen one too many riders get smashed doing nothing wrong, and had one too many close calls of my own.

Yes I agree, the average Canberra driver does not pay attention to anything else other than themselves. That said if you ride properly you can reduce the danger to yourself. I used to ride in the wet, but decided its just too dangerous the way many drivers in Canberra drive in the wet.

dungfungus said :

I went for a drive near the airport precinct yesterday and noted about 50 – 60 cars queued up at the Costco bowsers.
Seems to me to be false economy to drive a long way (which is almost anywhere in Canberra) to waste time to save for the sake of saving a few dollars when the real cost of running a car these days is about $1.00 per kilometre. It’s not rocket science.
Of concern was the number of once colouful nursery associated businesses in Pialligo that have closed. The ones that are still there were not attracting many customers either.
I feel for the retailers that are going to be displaced by IKEA. This is not my idea of a “vibrant” city.

My actual cost per km for fuel is roughly $0.14. So the trip out to Majura from my house would cost me about $2.30 in petrol, and the same to get home. But of course I would do other things on that trip, like shopping, which has to be done anyway. The rest of your “$1 per km” figure is debatable, considering my registration costs are fixed per year regardless of the distance travelled, and my servicing costs are low since I service the car myself.

For the nearly $18 saving per tank of fuel, it’s well worth the trip since I regularly find myself within 10km or less from Majura, and use the excursion to take care of other business that needs doing.

I also don’t mind the 5 – 10 minute wait to get to a bowser. Ninety percent of the time I’d rather the wait than give my money to one of the other petrol station operators who I feel are blatantly ripping Canberrans off. Consider it a reasonably convenient form of protest.

I went for a drive near the airport precinct yesterday and noted about 50 – 60 cars queued up at the Costco bowsers.
Seems to me to be false economy to drive a long way (which is almost anywhere in Canberra) to waste time to save for the sake of saving a few dollars when the real cost of running a car these days is about $1.00 per kilometre. It’s not rocket science.
Of concern was the number of once colouful nursery associated businesses in Pialligo that have closed. The ones that are still there were not attracting many customers either.
I feel for the retailers that are going to be displaced by IKEA. This is not my idea of a “vibrant” city.

wildturkeycanoe said :

I heard an interesting story about the cheap Costco fuel. The adjacent Woolworths servo drops its price to match Costco, but after the Costco shuts down for the night the Woolworths price goes back up to regular pricing again. Can anyone else verify this and if it is the case, how can it be legal to change your prices twice a day, simply because your competition is either open or closed? That, in my opinion, is a totally extortionist raping of Canberra drivers.

I like to pay fuel cheaply just as much as the next person, but the rhetoric around fuel pricing can be amusing sometimes.

Why would it ever be illegal for a petrol retailer to change its pricing during the day?

If Harvey Norman had a sale and JB Hi-Fi with extended hours puts its products on sale only to up them again after Harvey Norman closed would that be illegal too?

I’m not saying it’s not “dodgy” of the Woollies to be so brazen about its fuel pricing adjustments, but illegal? Really?

And as for the profit margins on fuel, why are petrol companies scrutinised and criticised so heavily when other brands so willing to exploit commercialism/capitalism, such as pretty much any fashion brand, seem to escape the ire of the public?

Supply. Demand. Isn’t it just pretty basic economics?

wildturkeycanoe said :

I heard an interesting story about the cheap Costco fuel. The adjacent Woolworths servo drops its price to match Costco, but after the Costco shuts down for the night the Woolworths price goes back up to regular pricing again. Can anyone else verify this and if it is the case, how can it be legal to change your prices twice a day, simply because your competition is either open or closed? That, in my opinion, is a totally extortionist raping of Canberra drivers.

I can never figure out why people think things like this are offensive/illegal/extoriton. Isnt this exactly the compoetivive marketplace at work?

wildturkeycanoe said :

I heard an interesting story about the cheap Costco fuel. The adjacent Woolworths servo drops its price to match Costco, but after the Costco shuts down for the night the Woolworths price goes back up to regular pricing again. Can anyone else verify this and if it is the case, how can it be legal to change your prices twice a day, simply because your competition is either open or closed? That, in my opinion, is a totally extortionist raping of Canberra drivers.

That’s been well covered in the Canberra Times if you google.
There’s a place in Dickson that has changed prices 4 times in a day previously. To and from work, then a holiday weekend?

I’ve seen Unleaded at 107 up on the Central Coast this week, but the really interesting thing is that the cheapest diesel I’ve seen has been 133.9 and the most expensive at 151.9
That’s not much different to Canberra….so why is unleaded so much cheaper up there not diesel?
Or alternatively, why is Canberra diesel seemingly good value but petrol an absolute rip off ?

I heard an interesting story about the cheap Costco fuel. The adjacent Woolworths servo drops its price to match Costco, but after the Costco shuts down for the night the Woolworths price goes back up to regular pricing again. Can anyone else verify this and if it is the case, how can it be legal to change your prices twice a day, simply because your competition is either open or closed? That, in my opinion, is a totally extortionist raping of Canberra drivers.

dungfungus said :

MERC600 said :

switch said :

dungfungus said :

Is the cheap price in the USA the result of them becoming independent on supplying their own energy now?

Don’t we also have vast reserves of oil rich shale…

Shale oil used to be mined at Joadja, a very little joint near Mittagong. It was mined from around 1870 till 1911. The shale was used to manufacture kerosene , but the kero manufacture became cheaper by other methods and it folded. I still have somewhere a video of the place, made for sale at a reunion held by former descendants.

Also mined years ago at Newnes Junction near Lithgow. There are great stories about the rise and fall of these ventures. That video sound great – is it available on-line somewhere?
The current glut of oil could create another financial crisis as the new shale oil mines in the USA, that were created with trillions of dollars of debt, start to fold.
What happened to the doomsday peak-oilers?

The video I have is ‘JOADJA CREEK.. The shale oil town & its people 1870’s – 1990’s.’

Copyright Greg & Leonie Knapman. 59 Regent St Mittagong 2575

MERC600 said :

Shale oil used to be mined at Joadja, a very little joint near Mittagong. It was mined from around 1870 till 1911. The shale was used to manufacture kerosene , but the kero manufacture became cheaper by other methods and it folded. I still have somewhere a video of the place, made for sale at a reunion held by former descendants.

I wasn’t thinking of Joadja, or Newnes or Glen Davis or Hartley Vale or Torbane etc (see, I have read the Eardley book), whose combined output over all the years they operated would now meet Australia’s oil thirst for maybe a month. I was thinking of:

Oil shale deposits, varying by age and origin, are located in Queensland, New South Wales, South Australia, Victoria and Tasmania. As of 2012 the total amount of the demonstrated resource is estimated at 58 billion tonnes. Of this about 25 billion barrels (4.0×10^9 m3) is recoverable, equating to the world’s 8th largest resource.

– from the wikipedia article, “Oil shale in Australia” http://en.wikipedia.org/wiki/Oil_shale_in_Australia

MERC600 said :

switch said :

dungfungus said :

Is the cheap price in the USA the result of them becoming independent on supplying their own energy now?

Don’t we also have vast reserves of oil rich shale…

Shale oil used to be mined at Joadja, a very little joint near Mittagong. It was mined from around 1870 till 1911. The shale was used to manufacture kerosene , but the kero manufacture became cheaper by other methods and it folded. I still have somewhere a video of the place, made for sale at a reunion held by former descendants.

Also mined years ago at Newnes Junction near Lithgow. There are great stories about the rise and fall of these ventures. That video sound great – is it available on-line somewhere?
The current glut of oil could create another financial crisis as the new shale oil mines in the USA, that were created with trillions of dollars of debt, start to fold.
What happened to the doomsday peak-oilers?

watto23 said :

I’ve taken fuel prices and parking fees into my own hands and got my motorcycle license.

Fuel prices, parking fees, and your life in your hands.
I used to get around this town on a motorbike. No more. Seen one too many riders get smashed doing nothing wrong, and had one too many close calls of my own.

ftr, I’m fine with schlepping out to CostCo for cheap fuel. But this whole malarkey does make it clear just how hard we’ve been screwed by the oil companies for as long as anyone can remember; I have no doubt they’re still making money at $1.17/L … anyone charging $1.35 (or $1.50) is having a laugh.

JC said :

watto23 said :

Which to me looks like competition is there but the prices were not coming down. We don’t even have a cycle (which would make sense if prices high on pay day and low a few days before).
Its been shown that people seem to drive to Majura to get cheap petrol (probably because its really cheap). I did notice I paid $1.37 last week which is at least 10-15c less than normal in Tuggeranong.

I’m not sure why prices are high in Canberra, but I suspect everyone knows if they lower prices every other servo will do the same so they won’t gain much more business except in the short term, so why bother, keep rolling in the profits of the higher price in Canberra.

Wait and see as maybe the costco servo has started to drop prices around Canberra a little bit, due to the fact people have worked out they if they go to costco once a week to save 20c a litre is actually saving them a lot of money. Even the cost of fuel to get there is offset easily, and easy enough to combine a visit to the hardware store or do groceries or even when you visit say the bus depot market/ fyshwick markets, its not that much further to Costco for the cheap fuel.

We’ll see, I won’t be surprised if this is short term only.

What it shows is there is a variety in branding and ownership in Canberra that reflects prety much the national market. There is still a lack of competition, but it is not between the brands, rather, it is, as I said in one of my first posts a geographical issue that many of the stations are off main roads and few located together, so each is a virtual monopoly.

Your hope that Costco will drive prices down is to be admired but reality is most people in Canberra fill up when they need to, except for a few hard cores they won’t drive to the airport to save a few bucks. Indeed just look at the supermarket market to see that whilst there are many going to Costoc, there is still no shortage of customers in the other supermarkets and the prices have not changed due to Costco.

Your right its hopeful and even any ACCC enquiry will be short term pressure on lower prices. I’ve taken fuel prices and parking fees into my own hands and got my motorcycle license. The other day it cost me $9 to fill up for a weeks worth of commuting!

switch said :

dungfungus said :

Is the cheap price in the USA the result of them becoming independent on supplying their own energy now?

Don’t we also have vast reserves of oil rich shale…

Shale oil used to be mined at Joadja, a very little joint near Mittagong. It was mined from around 1870 till 1911. The shale was used to manufacture kerosene , but the kero manufacture became cheaper by other methods and it folded. I still have somewhere a video of the place, made for sale at a reunion held by former descendants.

watto23 said :

Which to me looks like competition is there but the prices were not coming down. We don’t even have a cycle (which would make sense if prices high on pay day and low a few days before).
Its been shown that people seem to drive to Majura to get cheap petrol (probably because its really cheap). I did notice I paid $1.37 last week which is at least 10-15c less than normal in Tuggeranong.

I’m not sure why prices are high in Canberra, but I suspect everyone knows if they lower prices every other servo will do the same so they won’t gain much more business except in the short term, so why bother, keep rolling in the profits of the higher price in Canberra.

Wait and see as maybe the costco servo has started to drop prices around Canberra a little bit, due to the fact people have worked out they if they go to costco once a week to save 20c a litre is actually saving them a lot of money. Even the cost of fuel to get there is offset easily, and easy enough to combine a visit to the hardware store or do groceries or even when you visit say the bus depot market/ fyshwick markets, its not that much further to Costco for the cheap fuel.

We’ll see, I won’t be surprised if this is short term only.

What it shows is there is a variety in branding and ownership in Canberra that reflects prety much the national market. There is still a lack of competition, but it is not between the brands, rather, it is, as I said in one of my first posts a geographical issue that many of the stations are off main roads and few located together, so each is a virtual monopoly.

Your hope that Costco will drive prices down is to be admired but reality is most people in Canberra fill up when they need to, except for a few hard cores they won’t drive to the airport to save a few bucks. Indeed just look at the supermarket market to see that whilst there are many going to Costoc, there is still no shortage of customers in the other supermarkets and the prices have not changed due to Costco.

JC said :

7Eleven:

So my count is northside 28 servo’s of which 13 are Shell/Coles or Caltex/Wollworths and 15 are not aligned to the Evil supermarket brands.

Southside 25 servos’s of which 15 are Shell/Coles or Caltex/Wollworths and 10 are not aligned to the Evil supermarket brands.

So 53 ACT wide, 28 are either Shell/Coles or Caltex/Woolworths and 25 are others.

Which to me looks like competition is there but the prices were not coming down. We don’t even have a cycle (which would make sense if prices high on pay day and low a few days before).
Its been shown that people seem to drive to Majura to get cheap petrol (probably because its really cheap). I did notice I paid $1.37 last week which is at least 10-15c less than normal in Tuggeranong.

I’m not sure why prices are high in Canberra, but I suspect everyone knows if they lower prices every other servo will do the same so they won’t gain much more business except in the short term, so why bother, keep rolling in the profits of the higher price in Canberra.

Wait and see as maybe the costco servo has started to drop prices around Canberra a little bit, due to the fact people have worked out they if they go to costco once a week to save 20c a litre is actually saving them a lot of money. Even the cost of fuel to get there is offset easily, and easy enough to combine a visit to the hardware store or do groceries or even when you visit say the bus depot market/ fyshwick markets, its not that much further to Costco for the cheap fuel.

We’ll see, I won’t be surprised if this is short term only.

7Eleven:

Northside:
Kippax
Melba
Spence
Casey
Braddon
Giralang (6 in total)

Southside

Fyshwick
Erindale
Mawson (3 in total)

Caltex (non Woolworths)

Kaleen
Gold Creek
Airport
Braddon
Mitchell (5 in total)

Southside

Kambah
Hughes
Fyshwick (3 in total, though really 2 as Fyshwick isn’t a traditional station)

BP

Macquarie
Watson
Braddon (3 in total)

Southside

Phillip
Kingston
Chisolm
Fyshwick (4 in total)

Shell/Coles
Hawker
Belconnen x2
Charnwood
Gungahlin
Dickson
Braddon (7 in total)

Southside

Deakin
Manuka
Fyshwick x2
Curtin
Phillip
Tuggernaong
Wanniassa (8 in total)

Caltex/Woolworths

Gungahlin
Kippax
Belconnen
Dickson
EPIC
Majura Park (6 in total)

Southside

Mawson
Kambah
Tuggernaong
Hume
Calwell
Conder
Weston Creek (7 in total)

Others
United Amaroo (1 in total)

So my count is northside 28 servo’s of which 13 are Shell/Coles or Caltex/Wollworths and 15 are not aligned to the Evil supermarket brands.

Southside 25 servos’s of which 15 are Shell/Coles or Caltex/Wollworths and 10 are not aligned to the Evil supermarket brands.

So 53 ACT wide, 28 are either Shell/Coles or Caltex/Woolworths and 25 are others.

watto23 said :

I know many people who will go to neither and blame Coles and Woolies for high prices. Either way the non woolies/coles servos haven’t exactly dropped their prices either. They know Canberrans love to drive, have a high average wage and will pay for fuel. We will whinge about it, but still pay for fuel over catching a bus, cycling or buy smaller cars/motorbikes..

Perception is everything of course, but reality is different. The core barrier to competition in Canberra is location of service stations and the population they serve.

The real down fall started about 25 years ago when Shell put up barriers that allowed private service stations to brand as shell. If I recall they set a minimum buy which basically excluded many of the local suburban servo’s in Canberra. In the area where I live, in Kippax this saw Shell Holt close, Shell Macgregor went to BP, then later got rid of fuel sales all together and now is just a repair shop. Shell at Higgins if I recall had the volume but didn’t last too long before it too closed.

Shell also introduced multisite franchising which saw many established franchisees out of business. Two ladies run the Shell at Charnwood and were replaced by a multisite franchisee. This change saw many workshops close down as the multisite francisees were interested in fuel only. Multisite franchises also tend to set the same price across the sites they own, so no real competition even within the same brand. Again all well before the supermarkets started co-branding.

Other brands did the same but to a lesser extent. Caltex for example has more independent owned stations using their branding, and of course about 25 years ago saw the disappearance of Esso as a brand. Fortunately in Canberra only a few servo’s closed (the one where Waves Carwash in Braddon was being one), the rest became Mobil, though not sure if at the same time or latter the servo at Kaleen became Caltex, and around the same time Ampol also dissipaered with many re-branding as Caltex and again some closing (Braddon again comes to mind).

So lack of competition is nothing new and certainly nothing to do with the supermarkets, who’s contrary to what many beleive don’t set the price on fuel, the oil company owners and franchisees do.

JC said :

watto23 said :

Further to this, where there is say a 7Eleven (previously Mobil) and a Woolies in Erindale, Why would 7Eleven lower their prices, they’ll get plenty of traffic from those not wanting to support the duopoly, and they passively sit there looking innocent with no need to lower their prices. Costco have done it, because it will drive up membership. I’m thinking for $60 per year I’ll save that in petrol alone. I’ll just fill up when I’m out that way. Of course I’ve found the best way to save petrol is to not drive a big SUV 🙂 Canberrans a re very indulgent and come up with all sorts of reasons to have what they have!

There is no duopoly in the fuel market, the Woolworths/Caltex branded stations have 24% of the market Coles/Shell 24% of the market with the remaining 52% shared between BP owned sites, 7Elelven/Mobil ownd sites and the independant’s (incuding those that use brands). So yeah two might be slightly dominate but in a market where there are 4 brands plus indpendants, 24% share is not excessive. Certainly not to duopoly status, unlike supermarkets where the big two have almost 75% market share combined with the rest sharing the remaining 25%.

In NSW/ACT there share may well be a slight skew towards Shell and Caltex which is not surprising when you consider that Shell and Caltex were the refinary operators here. Compared to say Victoria that had Mobil and Shell refinaries, SA had if I recall Mobil and Caltex, with a skew towards Mobil and QLD that had a BP refinary. Many of the refinaries are now closed of course but each state seemed to skew towards brands that had refinaries in their state, just in NSW they were the two brands that have alligned themselves with the ‘evil’ supermarkets.

By duopoly i’m referring to coles and woolworths with regards to supermarkets. So while with petrol its not a dominant duopoly like supermarkets, the perception is it is. I’m not sure what the market breakdown is in Canberra. In Tuggers i can think of Chisholm BP, Erindale 7Eleven and the Caltex on Drakeford drive. Then there are woolies at Erindale, Calwell, Conder, Tuggeranong, Kambah and Coles at Tuggeranong and Wanniassa (its a shell not sure if its Coles as well?) so thats 70% to the duopoly in Tuggeranong.

I know many people who will go to neither and blame Coles and Woolies for high prices. Either way the non woolies/coles servos haven’t exactly dropped their prices either. They know Canberrans love to drive, have a high average wage and will pay for fuel. We will whinge about it, but still pay for fuel over catching a bus, cycling or buy smaller cars/motorbikes..

I have been a Costco member since they first opened in Sydney. My partner is loves her groceries and reads junk mail every week. We discovered that Costco is only good value for maybe half its products, so we shop at both Coles and Costco.

While I love the fact that Costco petrol is so cheap, I still wonder about the business strategy behind them. Is it to get more people to sign up? Or to get existing members to visit the store more often?

rommeldog56 said :

Masquara said :

These drops in petrol prices are dwarfed by an expected doubling in natural gas prices in the next three years … thanks to a “need” to match export prices domestically …

Yep – I heard recently claimed that australia is the only large natural exporting nation that doesn’t have a “Domestic Reservation” policy – in fact, I think Allen Jones on 2GB bangs on about it.

As i heard, in the US (and other countries) gas exporters are required by law to meet domestic gas requirements at a substantially reduced rate price. It is that cheap natural gas that has helped power back the US industrial sector out of their recession. That now doubt increases the US exporters price for their gas on the international market – but protects their local industry and jobs and citizens can even morte easily afford to keep warm !

Such a policy makes logical sense – which is probably why successive Commonealth Govt’s in Australia have rejected that concept. The Lib’s Minister Ian McFarlane again rejected such a policy a few months ago.

And yes – the projected price rises for natural gas in Australia over the next few years are astounding.

I think Australia will be using their coal fired power stations for a long time yet.

Masquara said :

These drops in petrol prices are dwarfed by an expected doubling in natural gas prices in the next three years … thanks to a “need” to match export prices domestically …

Yep – I heard recently claimed that australia is the only large natural exporting nation that doesn’t have a “Domestic Reservation” policy – in fact, I think Allen Jones on 2GB bangs on about it.

As i heard, in the US (and other countries) gas exporters are required by law to meet domestic gas requirements at a substantially reduced rate price. It is that cheap natural gas that has helped power back the US industrial sector out of their recession. That now doubt increases the US exporters price for their gas on the international market – but protects their local industry and jobs and citizens can even morte easily afford to keep warm !

Such a policy makes logical sense – which is probably why successive Commonealth Govt’s in Australia have rejected that concept. The Lib’s Minister Ian McFarlane again rejected such a policy a few months ago.

And yes – the projected price rises for natural gas in Australia over the next few years are astounding.

These drops in petrol prices are dwarfed by an expected doubling in natural gas prices in the next three years … thanks to a “need” to match export prices domestically …

Still no change in the western burbs, $130.9 for E10, $133.9 for 91 unleaded…I didn’t dare look at 98 octane. Sad considering the news broadcast Sydney as having $1.09/L yesterday and expecting to drop to $1 flat shortly. Wish I could ride a motorcycle again….

91RON was 110.9¢/litre at the BP near Sydney airport yesterday. Even the 98RON I buy was only 128.9¢/litre.

watto23 said :

Further to this, where there is say a 7Eleven (previously Mobil) and a Woolies in Erindale, Why would 7Eleven lower their prices, they’ll get plenty of traffic from those not wanting to support the duopoly, and they passively sit there looking innocent with no need to lower their prices. Costco have done it, because it will drive up membership. I’m thinking for $60 per year I’ll save that in petrol alone. I’ll just fill up when I’m out that way. Of course I’ve found the best way to save petrol is to not drive a big SUV 🙂 Canberrans a re very indulgent and come up with all sorts of reasons to have what they have!

There is no duopoly in the fuel market, the Woolworths/Caltex branded stations have 24% of the market Coles/Shell 24% of the market with the remaining 52% shared between BP owned sites, 7Elelven/Mobil ownd sites and the independant’s (incuding those that use brands). So yeah two might be slightly dominate but in a market where there are 4 brands plus indpendants, 24% share is not excessive. Certainly not to duopoly status, unlike supermarkets where the big two have almost 75% market share combined with the rest sharing the remaining 25%.

In NSW/ACT there share may well be a slight skew towards Shell and Caltex which is not surprising when you consider that Shell and Caltex were the refinary operators here. Compared to say Victoria that had Mobil and Shell refinaries, SA had if I recall Mobil and Caltex, with a skew towards Mobil and QLD that had a BP refinary. Many of the refinaries are now closed of course but each state seemed to skew towards brands that had refinaries in their state, just in NSW they were the two brands that have alligned themselves with the ‘evil’ supermarkets.

taninaus said :

I haven’t had the chance to head out to the airport to take advantage of these prices – is it just ULP that is well priced or does premium follow the trend as well?.

Not sure about the Woolies but I’ve paid around $1.33 per litre for 98 at Costco twice since its been opened, most recently earlier this week. That’s compared to around $1.65 at 7 Eleven for the majority of 2014.

taninaus said :

I haven’t had the chance to head out to the airport to take advantage of these prices – is it just ULP that is well priced or does premium follow the trend as well? given it is already 10-15c more than ULP, any price drop is welcome.

yes we are getting well and truly sc#%^^@@!! with petrol locally – but like the banks just watch how quickly the prices go up when the international price of oil rises, even if they haven’t had a supplier delivery in the mean time.

Yes, 98 RON is commensurately lower.

The only winners are our major capital city residents.

Much poorer country people and communities are subsidising big city fuel prices. Not only that the Major cities also take most of the fuel tax paid leaving country people with 3rd world road system.

JC said :

rommeldog56 said :

When a service station site is auctioned in Canberra, my perception is that Wollies/Coles or their affiliated petrol brands seem to have much deeper pockets to buy the site, hence strangling competition, hence higher prices.

Now, wouldn’t it be nice if for all future petrol station site auctions, Wollies/Coles and the affiliated petrol brands were excluded ? But that would no doubt mean a bit less revenue for the ACT Gov’t.

True that competition is the real issue here, but also much of what you say is not the case at all.

Firstly the sites that are co-branded (except some Woolies sites) are owned by the oil companies with the supermarket entering into naming rights agreements for the shops. Only about 10% of Woolworths/Caltex branded sites are owned by Woolworths.

As for new sites, of the new stations that have opened in recent years in Canberra the only one that I can think of that has gone to the ‘evil’ Woolworths/Caltex Coles/Shell lot is the one at Majura Park, and even then being airport land I doubt it went to any tender anyway.

Other sites that have opened are the new 7Eleven at Casey, which opened in the past few weeks. So one break of your theory.

The Caltex at Gold Creek, a few years ago now of course, which is a privately owned sited which entered into a supply and branding deal with Caltex. (hence no Woolworths branding). So again a break in your theory.

There is of course the ‘newish’ Woolworths owned site at EPIC, but this was done through the purchase of an existing site, so again not open market.

The Caltex at the airport, again a privatley owned site with Caltex branding, so again a break of the theory.

Canberra also still has a lot of privatley owned stations in the suburbs. Ones that are branded just as Caltex are the easiest ones to spot, if they have no Woolworths branding, chances are they are private. There are also a number of 7 Elevens (Melba and Spence come to mind) that are privately owned.

So really ownership of the sites is not the issue.

But trace back through history and what many say causes the lack of competition is the structure of Canberra whereby we put things like servo’s etc in group centres and in the past suburban shopping centres and the like. So each group centre has 1 maybe 2 servo’s and that is it for miles around. Except in places like Braddon and in the past but no longer Dickson, it is hard to shop around so hence the servo’s price accordingly.

Further to this, where there is say a 7Eleven (previously Mobil) and a Woolies in Erindale, Why would 7Eleven lower their prices, they’ll get plenty of traffic from those not wanting to support the duopoly, and they passively sit there looking innocent with no need to lower their prices. Costco have done it, because it will drive up membership. I’m thinking for $60 per year I’ll save that in petrol alone. I’ll just fill up when I’m out that way. Of course I’ve found the best way to save petrol is to not drive a big SUV 🙂 Canberrans a re very indulgent and come up with all sorts of reasons to have what they have!

I haven’t had the chance to head out to the airport to take advantage of these prices – is it just ULP that is well priced or does premium follow the trend as well? given it is already 10-15c more than ULP, any price drop is welcome.

yes we are getting well and truly sc#%^^@@!! with petrol locally – but like the banks just watch how quickly the prices go up when the international price of oil rises, even if they haven’t had a supplier delivery in the mean time.

JC said :

dungfungus said :

Is the cheap price in the USA the result of them becoming independent on supplying their own energy now?

Taxes as well.

Just expanding on this. It not fuel independence per se, rather that the US has legislation that their oil producers cannot sell on the world market, thus reducing the base cost. It also reduces export earnings for the US.

Of course the other reason as previously stated, the US has decided to forego the tax that other countries earn on fuel for domestic policy reasons.

dungfungus said :

VYBerlinaV8_is_back said :

Just for the sake of comparison, I just got back from filling my rental car at the local servo here in Florida and it cost a smidge under 70 cents Australian per litre, or US $2.18 per gallon. 54 litres burned up by my Dodge Challenger sitting at 135km/h on the freeway and it cost 30 bucks US.

Makes ours seem pricey by comparison, even though in world terms it’s pretty cheap.

Is the cheap price in the USA the result of them becoming independent on supplying their own energy now?

Yep.

dungfungus said :

Is the cheap price in the USA the result of them becoming independent on supplying their own energy now?

Taxes as well.

rommeldog56 said :

When a service station site is auctioned in Canberra, my perception is that Wollies/Coles or their affiliated petrol brands seem to have much deeper pockets to buy the site, hence strangling competition, hence higher prices.

Now, wouldn’t it be nice if for all future petrol station site auctions, Wollies/Coles and the affiliated petrol brands were excluded ? But that would no doubt mean a bit less revenue for the ACT Gov’t.

True that competition is the real issue here, but also much of what you say is not the case at all.

Firstly the sites that are co-branded (except some Woolies sites) are owned by the oil companies with the supermarket entering into naming rights agreements for the shops. Only about 10% of Woolworths/Caltex branded sites are owned by Woolworths.

As for new sites, of the new stations that have opened in recent years in Canberra the only one that I can think of that has gone to the ‘evil’ Woolworths/Caltex Coles/Shell lot is the one at Majura Park, and even then being airport land I doubt it went to any tender anyway.

Other sites that have opened are the new 7Eleven at Casey, which opened in the past few weeks. So one break of your theory.

The Caltex at Gold Creek, a few years ago now of course, which is a privately owned sited which entered into a supply and branding deal with Caltex. (hence no Woolworths branding). So again a break in your theory.

There is of course the ‘newish’ Woolworths owned site at EPIC, but this was done through the purchase of an existing site, so again not open market.

The Caltex at the airport, again a privatley owned site with Caltex branding, so again a break of the theory.

Canberra also still has a lot of privatley owned stations in the suburbs. Ones that are branded just as Caltex are the easiest ones to spot, if they have no Woolworths branding, chances are they are private. There are also a number of 7 Elevens (Melba and Spence come to mind) that are privately owned.

So really ownership of the sites is not the issue.

But trace back through history and what many say causes the lack of competition is the structure of Canberra whereby we put things like servo’s etc in group centres and in the past suburban shopping centres and the like. So each group centre has 1 maybe 2 servo’s and that is it for miles around. Except in places like Braddon and in the past but no longer Dickson, it is hard to shop around so hence the servo’s price accordingly.

dungfungus said :

Is the cheap price in the USA the result of them becoming independent on supplying their own energy now?

Don’t we also have vast reserves of oil rich shale…

VYBerlinaV8_is_back said :

Just for the sake of comparison, I just got back from filling my rental car at the local servo here in Florida and it cost a smidge under 70 cents Australian per litre, or US $2.18 per gallon. 54 litres burned up by my Dodge Challenger sitting at 135km/h on the freeway and it cost 30 bucks US.

Makes ours seem pricey by comparison, even though in world terms it’s pretty cheap.

Is the cheap price in the USA the result of them becoming independent on supplying their own energy now?

What gets me is how the petrol price for a litre go as far as showing a percentage of one cent. I mean the one cent piece went the way of the dodo yonks ago. But we still have this on petrol advertising. It annoys me.

Damm. A new years resolution was not to get annoyed. I only lasted till 4.38pm on the first day.

wildturkeycanoe said :

Why hasn’t petrol in the outer suburbs dropped at all? We are still paying well over $1.35/L in west Belconnen and over Christmas it was still around $1.40+ from here to across the border. I haven’t seen any drop in prices except for maybe 5c/L since before the holidays began.
That being said, I could drive all the way out to Majura at a cost of around $3.50 in fuel, to save around $13 for a full tank. So, I’d have to have a nearly empty tank and waste an hour to make almost $10. Unless there’s any other reason to go there, I’ll just keep paying premium prices for living on the fringe.

I heard yesterday that the prices are starting to come down in Fyshwick – presumably because drivers near Fyshwick are starting to drive to Majura to fill up. Hopefully this domino effect will keep spreading through Canberra.

The big question though is, if and when fuel prices come down around Canberra, how many drivers will keep going out to Costco and continue to punish the cartels for their historical overpricing or reward them for their past practices and simply switch back to their normal servos once the prices start to come down.

The bigger question is what will happen when petrol prices return to normal?
The current situation is being caused by Saudi Arabia deliberately maintaining overproduction to squeeze other producers out of business.
You can bet that big business will use the return to normal prices as an excuse to hike prices and this will probably be concurrent with price increases on imported goods (that’s almost everything we need with a double whammy on petrol) as the effect of our falling dollar takes hold.
Hello, inflation!
This will be a phenomenon that many Canberrans have never had to live with. It will be interesting.

Just for the sake of comparison, I just got back from filling my rental car at the local servo here in Florida and it cost a smidge under 70 cents Australian per litre, or US $2.18 per gallon. 54 litres burned up by my Dodge Challenger sitting at 135km/h on the freeway and it cost 30 bucks US.

Makes ours seem pricey by comparison, even though in world terms it’s pretty cheap.

Earlier in the week I saw ULP at 133.9/134.99 in those thriving metropolises with highly competitive petrol markets, namely Bermagui, Tathra and Merimbula.

wildturkeycanoe said :

Why hasn’t petrol in the outer suburbs dropped at all? We are still paying well over $1.35/L in west Belconnen and over Christmas it was still around $1.40+ from here to across the border. I haven’t seen any drop in prices except for maybe 5c/L since before the holidays began.
That being said, I could drive all the way out to Majura at a cost of around $3.50 in fuel, to save around $13 for a full tank. So, I’d have to have a nearly empty tank and waste an hour to make almost $10. Unless there’s any other reason to go there, I’ll just keep paying premium prices for living on the fringe.

A very good question. It’s called a rip off/price manipulation by the stations/oil companies. Petrol is also much cheaper in many small country towns than it is in Canberra (even though the price here has dropped – in most places anyway). You have to wonder where the petrol pricing commissioner is in all this – the “evdence” is right in front of their nose – in full public view !

I think that a big part of the problem here is a lack of real competition too. When a service station site is auctioned in Canberra, my perception is that Wollies/Coles or their affiliated petrol brands seem to have much deeper pockets to buy the site, hence strangelling competition, hence higher prices. Now, wouldn’t it be nice if for all future petrol station site auctions, Wollies/Coles and the affiliated petrol brands were excluded ? But that would no doubt mean a bit less revenue for the ACT Gov’t.

Why hasn’t petrol in the outer suburbs dropped at all? We are still paying well over $1.35/L in west Belconnen and over Christmas it was still around $1.40+ from here to across the border. I haven’t seen any drop in prices except for maybe 5c/L since before the holidays began.
That being said, I could drive all the way out to Majura at a cost of around $3.50 in fuel, to save around $13 for a full tank. So, I’d have to have a nearly empty tank and waste an hour to make almost $10. Unless there’s any other reason to go there, I’ll just keep paying premium prices for living on the fringe.

Further to JC’s final question, I didn’t see 91RON petrol above 113.5 for the 9 days I just spent in Adelaide.

Whilst Costco might have forced the Woolworths/Caltex servo next door to drop prices, the price drops are not as a result of Costco opening, rather the drop in global fuel prices.

I was in Sydney the weekend before Christmas and got ULP for $1.16 0(no discount voucher) at the servo on the M4. No Costco anywhere to be seen. Prices elsewhere from what I saw were all mostly sub $1.20. I filled up before leaving Canberra and payed $1.47.

So the real question is why are we paying 20c/l more than Sydney.