How low will petrol prices go?

Lisa Martin 2 January 2015 77
P1080582

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?


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77 Responses to How low will petrol prices go?
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rosscoact rosscoact 12:39 pm 13 Jan 15

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?

😀

Holden Caulfield Holden Caulfield 12:30 pm 13 Jan 15

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?

Bennop Bennop 12:01 pm 13 Jan 15

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

Mysteryman Mysteryman 11:05 am 13 Jan 15

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.

Mysteryman Mysteryman 11:02 am 13 Jan 15

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.

dungfungus dungfungus 11:01 am 13 Jan 15

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?

Bennop Bennop 10:59 am 13 Jan 15

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.

dungfungus dungfungus 10:34 am 13 Jan 15

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.

Bennop Bennop 9:48 am 13 Jan 15

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.

wildturkeycanoe wildturkeycanoe 6:45 pm 12 Jan 15

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.

rosscoact rosscoact 3:53 pm 12 Jan 15

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.

Holden Caulfield Holden Caulfield 2:21 pm 12 Jan 15

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?!

dungfungus dungfungus 1:40 pm 12 Jan 15

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?.

rosscoact rosscoact 1:07 pm 12 Jan 15

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

dungfungus dungfungus 12:30 pm 12 Jan 15

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.

watto23 watto23 11:08 am 12 Jan 15

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.

Mysteryman Mysteryman 10:41 am 12 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.
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.

dungfungus dungfungus 10:18 am 12 Jan 15

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.

Holden Caulfield Holden Caulfield 9:04 am 12 Jan 15

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?

Bennop Bennop 8:59 am 12 Jan 15

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?

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