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How low will petrol prices go?

By Lisa Martin 31 December 2014 77

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Canberra motorists have been treated to a drastic reduction in the price of fuel since the opening of Costco’s petrol station in early December.

On a trip to the Majura Park precinct just before Christmas, I was surprised to see unleaded fuel down to $1.17 a litre at both the Costco and the nearby Woolworths petrol station. I don’t remember the last time I saw petrol that cheap.

This was surprisingly even lower than the price of $1.29 I saw in the Canberra Times on the day the Costco petrol station opened. I didn’t really need to fill up but the offer was too good to drive past seeing as I was there. I don’t have a Costco membership (I simply don’t have room to store bulk quantities in my house so don’t see a need to shop there) so I instead took advantage of Woolworths’ lower prices.

Both outlets had a steady stream of traffic coming through with queues at least three cars deep at each bowser when I was there.

Saving more than 30 cents a litre on usual prices (I usually pay around $1.50 a litre) is a particularly good saving and certainly adds up. But I have to wonder if Woolworths can adjust their prices that dramatically – the mark up on fuel must be substantial.

At the opening of the Costco service station, the NRMA was reported as saying said this was the lowest petrol had been in Canberra in five years. It will be interesting to see if Costco can maintain the low prices in the long term – and if Woolworths will continue to be just as competitive to get the motorist dollar.

Also, as Sydney petrol prices started to fall dramatically recently – with prices touted to go possibly as low as a dollar – it will be interesting to see if the price drop will make it south to Canberra and if the Majura Park outlets will continue to offer substantial savings compared to other outlets.

I’m curious if this has been successful in getting new customers for Costco – or if Woolworths customers (who don’t need a membership but just a free rewards card to get the lowest price) are the real winners.

I’ve become accustomed to paying around the usual $1.40-$1.50 a litre and haven’t previously shopped around. Even using the Woolworths or Coles vouchers only saves you a dollar or two and it doesn’t seem worth it to drive especially to use my voucher. If a Woolworths or Coles service station is located where I’m driving and I need to fill up, then I fill up.

The Majura Park precinct is about a 10 minute drive from my house and I go there every now and then to do grocery shipping. It’s not my closest supermarket but I like it because it’s quieter than Dickson and easier to get a park. Certainly if the price continues to be substantially cheaper than the outlets I usually frequent, I would consider especially making the drive out if I was sitting near empty and getting groceries at the same time.

At least in the short term, the introduction of the Costco petrol station sounds like it is a win for Canberra motorists who frequent the Majura Park precinct, and will likely attract more customers to the centre.

No doubt the highly anticipated opening of Ikea – opening late 2015 according to their website – will also attract more Canberrans to Majura Park.

Do you shop around to get the best fuel price?


What’s Your opinion?


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77 Responses to
How low will petrol prices go?
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Jon 12:02 pm 15 Jan 15

m_ratt said :

Jon said :

Currently E91 is …

E91?

Do you mean E10 ULP (10% ethanol, usuall RON 94-95), E85 (85% ethanol, RON 105) or ULP91 (no ethanol, RON 91)?

Sorry, I meant unleaded 91.

Interesting thing is, when I posted the first comment this morning, Gunghalin unleaded 91 was showing 130.9. It’s currently now 124.9 so it’s changed 6 cents in just two and a half hours.

Caltex Canberra Airport are now 103.7 for unleaded 91 (so that’s dropped a few cents too).

m_ratt 11:42 am 15 Jan 15

Jon said :

Currently E91 is …

E91?

Do you mean E10 ULP (10% ethanol, usuall RON 94-95), E85 (85% ethanol, RON 105) or ULP91 (no ethanol, RON 91)?

Jon 9:27 am 15 Jan 15

If you’re after the price of fuel at Caltex, download the Woolworth Fuel app and it will tell you the current price of fuel at each of the nearby outlets. It doesn’t show non-Woolies stations obviously, but you can get a general idea of what the stations in your area are currently paying.

Currently E91 is 106.7 at Caltex Canberra Airport (before 4c discount), so CostCo should be around 102.7 (or very close to it).

The only thing to remember is that the main screen shows your personal “discounted price” and not the board standard price (although you can see what that is if you go into individual outlet’s page). If you do shop at Woolies and have a savings voucher attached to your everyday rewards card the price shown will reflect that discount.

Regardless of whether you use Woolworth fuel stations or not, this is a fantastic little app, especially if you’re travelling as you can find out the real time price of Woolworth fuel anywhere in Australia.

dungfungus 11:33 am 14 Jan 15

Bennop said :

dungfungus said :

Bennop said :

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

Where do we get this info without driving out there?

A couple of places:

https://motormouth.com.au/pricesearch.aspx?Region=Canberra

or

http://canberratimes.com.au/act-news/costco-drops-petrol-below-1-a-litre-in-canberra-20150113-12nc06.html

Thanks for links.
Prices are down to about $1.04 per litre at Airport precinct which is about $0.20 cheaper than anywhere else in Canberra.

Reprobate 11:32 am 14 Jan 15

dungfungus said :

.
You mention “cheaper to run cars”.
My grandson just bought his first car from another family member. Something 12 years old, 220,000KM but in good condition. The price was $2,500. That was the cheap part.
It then cost him $80 for an approved inspection station slip and new light bulb (mandatory for transferring registration on any vehicle 6 year old), about $ $140.00 for ACT Government rego transfer and $700 for comprehensive insurance. The rego will be due in a few months time so this will be another $960 and it will need a new set of tyres within 12 months which will cost $600.
He made the comment that now he knows why so many young people drive cars with a few months current rego that cost a few hundred dollars and then dump them and do the same thing over again. They don’t transfer the rego or insure them.
The ACT Government really soaks car owners and motorists don’t they?

Well, firstly the ACT Government doesn’t compel anyone to take out comprehensive insurance. Secondly, while personal CTP is included in ACT registration fees (from a range of insurers) and you buy it seperately in NSW, the overall annual cost between us and them is pretty similar. Also remember that rego inspections are an annual requirement (cost) for cars over 5yo in NSW, whereas here after the transfer there are no further inspections required (unless the car is defected).

I’m not sure that i’d be stumping up for comprehensive insurance on a $2,500 car as a p-plater – with most insurers loading big excesses on top of the annual premium, on a minor bingle leading to a claim would cost $700 for 12 months insurance + $700 under 25 excess + $700 inexperienced driver excess – that’s just about the market value of the car gone! He might end up with a cheque with enough mioney to buy a (cheap ) tankful of petrol in his replacement car though… Third party fire and theft is a better option in these cases I think.

Anyhoo… on the subject of petrol prices, when I last filled up at Costco in early January my $81 tankful of premium 98 would have cost over $100 anywhere else at the time. So 3 fills a year at Costco and I break even on the membership fee, everything after is a saving based on the current price differential.

Bennop 11:21 am 14 Jan 15

dungfungus said :

Bennop said :

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

Where do we get this info without driving out there?

A couple of places:

https://motormouth.com.au/pricesearch.aspx?Region=Canberra

or

http://canberratimes.com.au/act-news/costco-drops-petrol-below-1-a-litre-in-canberra-20150113-12nc06.html

dungfungus 11:06 am 14 Jan 15

Bennop said :

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

Where do we get this info without driving out there?

dungfungus 10:02 am 14 Jan 15

watto23 said :

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.

You mention “cheaper to run cars”.
My grandson just bought his first car from another family member. Something 12 years old, 220,000KM but in good condition. The price was $2,500. That was the cheap part.
It then cost him $80 for an approved inspection station slip and new light bulb (mandatory for transferring registration on any vehicle 6 year old), about $ $140.00 for ACT Government rego transfer and $700 for comprehensive insurance. The rego will be due in a few months time so this will be another $960 and it will need a new set of tyres within 12 months which will cost $600.
He made the comment that now he knows why so many young people drive cars with a few months current rego that cost a few hundred dollars and then dump them and do the same thing over again. They don’t transfer the rego or insure them.
The ACT Government really soaks car owners and motorists don’t they?

Mysteryman 9:52 am 14 Jan 15

JC said :

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.

I said nothing of petrol being regulated. Read my WHOLE post instead of cherry picking parts to reply nonsensically to, and you’ll see I was quite plainly talking about existing laws related to price fixing.

I think petrol, unlike many other products, is more closely related to other energy products due to the nature of its use. The reason I made that point was because someone else was comparing it to entirely unrelated products like office supplies, which I think was a poor comparison.

watto23 9:30 am 14 Jan 15

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.

Bennop 9:21 am 14 Jan 15

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

JC 11:21 pm 13 Jan 15

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.

JimCharles 9:35 pm 13 Jan 15

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 !

wildturkeycanoe 5:49 pm 13 Jan 15

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!!

dungfungus 4:57 pm 13 Jan 15

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

Mysteryman 12:59 pm 13 Jan 15

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.

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