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Petrol price gouging in Canberra set to continue

By Roger Allnutt - 14 December 2016 15

Petrol pricing Canberra

With OPEC announcing that they would stabilise production so as to increase the price of oil and with the Christmas holiday season just around the corner you can be sure that the already inflated price Canberrans pay for fuel is set to rise.

For years Canberrans have been slugged inflated prices for fuel compared to other capital cities and even in surrounding country towns.  When the price of crude goes up retailers often immediately raise their prices (usually to identical levels on the same day) despite the fact that the increased price on crude from Singapore takes some time to flow through.  Conversely, if and when prices should go down (eg when glut occurs or AUD rises), the price at the pump seems to take an inordinate amount of time to shift.

There are many reasons given for fluctuations in the pump price and although some are believable many are not.  Canberrans are always told that there is a price cycle – years ago it could be best to fill up early in the week and/or definitely before public service payday.  Nowadays prices stick at the same level for weeks.

Retailer margins are also a factor.  Canberra apparently has some of the highest in the country.

Another excuse is the level of competition in Canberra.  In a recent Canberra Times article Caltex spokesman Sam Collyer said Canberra ‘was a small market and petrol retailers were bound by different pressures to counterparts in other city locations’.  Cost of transport was also thrown in as a factor.

Interestingly, on a recent trip to Grenfell and Cowra, both with a small number of petrol stations, the price of unleaded petrol was around 114.9c/l compared to 129.9c/l at most Canberra outlets.  Apparently at the moment garages there can survive selling petrol at considerably lower prices.  Perhaps they are going broke.

At one time Canberra had a highly paid Petrol Price Commissioner who was supposedly there to monitor and regulate (if possible) petrol prices in the city.  I cannot find any current reference to that position which from memory was ineffective.  Perhaps being a public service city where the rest of the Australian population believe the bureaucrats are grossly overpaid, it has been seen as OK for petrol companies to charge inflated prices here.

Whatever the reasons Canberra motorists can expect to be slugged higher prices (the word ‘gouging’ comes to mind) in coming months.

Why do we put up with this situation?

What’s Your opinion?


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15 Responses to
Petrol price gouging in Canberra set to continue
Suzanne Kiraly 11:09 am 30 Dec 16

I noticed a huge queue at the Costco pumps yesterday – there’s a good reason for that! On the other hand, when I filled up at Hawker I was surprised to see the prices weren’t inflated. Perhaps that’s proof that Canberrans now expect higher prices at Christmas time – not good!

Holden Caulfield 1:46 pm 19 Dec 16

WiseMonkey said :

Having just relocated from Adelaide…

You’ll have to reset your parameters mate:

1. Canberra drivers are the worst!
and
2. Petrol prices in Canberra are the worst!

dungfungus 8:58 pm 17 Dec 16

WiseMonkey said :

Having just relocated from Adelaide,I have to say that the fuel prices here , it would seem, are very comparable to SA.

Thank goodness electricity prices aren’t the same, then (yet).

WiseMonkey 9:42 am 16 Dec 16

Having just relocated from Adelaide,I have to say that the fuel prices here , it would seem, are very comparable to SA.

TrevaQ 4:10 pm 15 Dec 16

SidneyReilly said :

Ok, I’ve heard all the hubris surrounding fuel prices in the ACT. Can anyone explain why small rural towns have cheaper fuel? Harden has fuels usually 10c cheaper than Costco and it has further to be transported.

I was just about to comment on Harden. Whenever I am going out to Young, I make sure I do it with only enough fuel to get to Harden and well secured jerrycan or two. The little independent on the way out of town (north) is usually about 20c cheaper per L than here in Canberra.

SidneyReilly 1:33 pm 15 Dec 16

Ok, I’ve heard all the hubris surrounding fuel prices in the ACT. Can anyone explain why small rural towns have cheaper fuel? Harden has fuels usually 10c cheaper than Costco and it has further to be transported.

dungfungus 9:32 pm 14 Dec 16

Masquara said :

Forget petrol – what about the plans to increase Canberra’s electricity bills by 10 per cent next year?

And the year after.

JC 4:58 pm 14 Dec 16

gazket said :

The ACT gov let Woolies and Coles rip us off.They set the price in Canberra. Simple solution and its called Costco . Your paying at minimum 20 cents a litre extra for premium fuel any where else in Canberra. You will have you $60 back in 2 months. It’s not rocket science.

Actually Coles and Wollies don’t control the service stations. Well Woolies do control some that they own (about 20% of all ‘Woolworths” servos), but most are just co-brand with actual ownership and price setting being done by Shell and Caltex. And when it comes to the market some of their (Shell and Caltex) decisions have resulted in the closure of some service stations.

The main factor there was their decision about 15-20 years ago to go for a multisite franchise type arrangement and cancel branding and supply arrangements with smaller private site owners. That resulted in the closure of a number of privately owned, but company branded sites (read many established suburban servos) and the squeezing out of the market of company owned by individual franchise sites.

And BTW the ACT government has no say what so ever in the petrol market. All they can do is release and zone sites for petrol stations, which they have done which has resulted in new sites going to companies other than Shell or Caltex. The core issue here is one of competition laws which is very much a federal issue.

Masquara 4:51 pm 14 Dec 16

Forget petrol – what about the plans to increase Canberra’s electricity bills by 10 per cent next year?

gazket 3:28 pm 14 Dec 16

gazket said :

The ACT gov let Woolies and Coles rip us off.They set the price in Canberra. Simple solution and its called Costco . Your paying at minimum 20 cents a litre extra for premium fuel any where else in Canberra. You will have you $60 back in 2 months. It’s not rocket science.

I haven’t been to a Belconnen service station for petrol in 5 months now and my money goes the the USA or where ever, who cares not me anymore .

gazket 3:17 pm 14 Dec 16

The ACT gov let Woolies and Coles rip us off.They set the price in Canberra. Simple solution and its called Costco . Your paying at minimum 20 cents a litre extra for premium fuel any where else in Canberra. You will have you $60 back in 2 months. It’s not rocket science.

JC 3:14 pm 14 Dec 16

crackerpants said :

Interesting you mention Cowra – I go back to visit my folks occasionally. I can think of 4 or 5 service stations off the top of my head, for a town of 10,000ish, shire of 13,000ish.

One service station for Weston Creek, 24,000ish people.

I know it’s apples and oranges, but it did give me pause for thought the other day. It used to always be the case that my parents would be sure to fill up on leaving Canberra. They don’t bother now.

A town on a highway of course that is frequented by those avoiding the Hume and Pacific Highways and places in between.

crackerpants 12:44 pm 14 Dec 16

Interesting you mention Cowra – I go back to visit my folks occasionally. I can think of 4 or 5 service stations off the top of my head, for a town of 10,000ish, shire of 13,000ish.

One service station for Weston Creek, 24,000ish people.

I know it’s apples and oranges, but it did give me pause for thought the other day. It used to always be the case that my parents would be sure to fill up on leaving Canberra. They don’t bother now.

devils_advocate 12:15 pm 14 Dec 16

“Perhaps being a public service city where the rest of the Australian population believe the bureaucrats are grossly overpaid, it has been seen as OK for petrol companies to charge inflated prices here.”

It’s not so much that it’s seen as being ok, but having a wealthier population, combined with the cited lack of competition, does cause supply to intersect with the demand curve at a different point. If people are not very price sensitive (and demand for petrol is not very responsive to price to begin with) then that will be reflected in higher prices.

I do find that for all my road-tuned cars, though, Costco petrol is well-priced and reliable quality.

Holden Caulfield 10:19 am 14 Dec 16

I was in Sydney last weekend and filled up in Randwick up before I drove home.

As I drove past the BP on Isa Street in Fyshwick on my way back into town, I noticed their pricing was 6¢/litre cheaper than I paid in Sydney.

Moreover, I noticed that most servos in Sydney last weekend were at least on parity or more expensive than petrol has been in Canberra in recent weeks. So what are we complaining about?

Irrespective of pricing in other cities, I think pricing in Canberra, of late, has been pretty steady and cheap enough. It’s still a lot cheaper than it has been in recent years.

And, in relative terms, the cost of filling up, is a minor part of running a car and I think people get way too caught up in the price they pay for petrol in comparison to other consumer goods.

Why, for example, do we get so outraged if a retailer nabs a few extra cents off us, but then we’ll go and pay a bucket load for stuff we don’t need at Christmas, most of which would have profit margins petrol retailers and franchisees could only dream of. I’m in no way defending big oil, just that I find it amusing that we accept some exorbitant profit margins and complain mercilessly at others.

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