Despite petrol prices dropping to a two-month low, Canberra’s average unleaded price has soared above Sydney and the national average just months after Chief Minister Andrew Barr gave petrol companies an ultimatum to lower prices.
Canberra’s average unleaded petrol price sat at 122.5 cents a litre as of 16 August, above the national average of 117.8 cents, and well above Sydney’s average of 110.9 cents.
The petrol price in Canberra only dropped a third of a cent in the last week, compared to an 8.4 cent drop in Sydney. Hobart and Brisbane were the only other capital cities with a higher average price than Canberra.
Peter Khoury from the NRMA said that while Canberra’s prices are well above Sydney, it is because the Harbour City is at the bottom of its price cycle – a cycle that does not happen in the nation’s capital.
“Sydney was more expensive two to three weeks ago when prices topped around the high 130s,” he told Region Media, noting that Sydney’s prices can fluctuate by more than 30 cents in a month.
At the start of May, unleaded petrol in the capital sat at around $1 a litre, and Canberrans could fill up for as little as 71 cents at some southern retailers. Caltex and Shell were selling Unleaded 91 at 127.1 cents a litre as of Monday afternoon (17 August) according to PetrolSpy, although Carltex dropped to 117 cents a litre closer to the airport and across the border in Queanbeyan.
“The price difference is because of local competition,” Mr Khoury said. “Queanbeyan has always had cheaper petrol than Canberra because there are cheaper retailers in the area, so bigger companies have to drop their prices.
“At a global level, oil demand is rising … and [producers] have also cut oil production, which is why the price has risen. Demand in Asia is back to pre-COVID levels, America is also going up but not quite to pre-COVID levels. Australia, with the exception of Victoria, has also seen demand continue to rise.”
Mr Barr previously told petrol companies that if prices in the ACT did not remain around the national average, he would intervene and set a maximum retail margin for the Territory.
The exorbitant fuel prices in the ACT were a clear indication of market failure, Mr Barr said. Companies that defy the order could face $40,000 fines and/or six months’ jail per offence.