A new report has found petrol prices have dropped in the ACT but Chief Minister Andrew Barr has vowed to keep the pressure on major petrol retailers to keep petrol prices in check.
The average monthly retail petrol price in the ACT has reduced to be almost in-line with Sydney, the Independent Competition and Regulatory Commission (ICRC) report has revealed.
The report showed that petrol prices in the ACT have been consistently higher than in Sydney over the past seven years, with Canberra’s monthly average price around 8.4 cents per litre higher.
The difference between Sydney prices and Canberra prices in 2018-19 was 11.8 cents per litre but since the ICRC commenced its investigations in February, the petrol prices in Canberra and Sydney have started to align, with the difference in May 2019 being only 0.6 cents per litre.
Last year, Canberra’s monthly average petrol prices were consistently higher than the five largest capital cities – Sydney, Melbourne, Brisbane, Perth and Adelaide – but the price gaps narrowed during the first three months of this year.
The report also examined retail petrol prices in regional towns around Canberra, including Batemans Bay, Nowra, Goulburn, Yass, Cooma and Wagga Wagga, finding Canberra’s petrol prices averaged around 1.7 cents per litre higher since 2012-13.
The average monthly price difference between Canberra and surrounding towns widened in the last six months of 2018 but has narrowed over 2019 to be 0.4 cents per litre in May.
Chief Minister Andrew Barr said the report shows that most Canberrans are “getting ripped-off at the bowser”.
“The analysis showed Canberra petrol stations were making much larger profits than petrol stations in Sydney and regional NSW,” Mr Barr said.
“The evidence and information from the ICRC’s investigations show the market is not serving our community, and service stations are charging motorists higher prices than in other cities and the surrounding region.
“Canberra service stations are making nearly twice the profit of petrol stations in nearby regional locations.”
The report said that the ACT’s concentrated retail petrol market and a low number of independent retailers with a “business strategy to aggressively discount” are two of the factors behind Canberra’s higher average monthly petrol prices.
The report said it also reflects the “relatively poor visibility” of many petrol stations in Canberra (in that they are difficult to locate), making it difficult for consumers to compare competing retailers’ prices.
Mr Barr has advised the Legislative Assembly to consider the merits of a standing enquiry into petrol prices in the ACT, with the same powers as the ICRC to compel financial documents from companies, before releasing its final report and recommendations later this year.
Mr Barr said the report confirmed that proposals such as fuel watch schemes that lock in daily prices, as seen in other jurisdictions, will be unlikely to lead to lower prices and can reduce market competition.
“It appears the scrutiny of the ICRC and the extraordinary powers it holds to compel companies to hand over financial records has made a difference to the prices being charged to Canberra motorists,” he said.
“We need to ensure this continues and providers don’t unjustifiably hike their prices.”
However, Opposition leader Alistair Coe said the Chief Minister’s suggestion for the Legislative Assembly to initiate a standing enquiry was a “cop-out”.
“It is fair to say that there is no silver bullet when it comes to reducing petrol prices within the ACT,” Mr Coe said. “To think that an Assembly committee will be the answer, I think is a bit of a cop-out.
“There are some very practical things the ACT Government can do, such as making sure there is real-time price publishing. It is complex and there needs to be a range of solutions or initiatives to put downward pressure on prices.
“It simply does not stack up that places like Bowral have considerably cheaper petrol than Belconnen. Unfortunately, I wasn’t surprised by the price differences because the gauge has been happening for so many years.
“Canberrans have become accustomed to it and for a lot of people, it is just another blow to the cost of living in the ACT.”