Petrol retailers blink after Barr ultimatum

Dominic Giannini 4 May 2020 39
Petrol prices

A range of petrol prices around Canberra on Monday, 4 May. Photo: Michelle Kroll.

Petrol prices across Canberra have started to come down to around $1 a litre after Chief Minister Andrew Barr issued an ultimatum to large retailers who were not passing on savings to consumers.

Mr Barr threatened to legislate a maximum retail margin for retailers in the territory after many refused to drop the price of petrol in the ACT despite a drop in global oil prices.

Most pumps in the ACT now have E10 sitting between 99 to 102 cents a litre as of 12:00 midday today (4 May) according to PetrolSpy Australia; however, motorists can fill up for as little as 71 cents a litre at the 7-Eleven in Mawson.

In comparison, the majority of retailers just over in the border in Queanbeyan and Jerrabomberra have prices sitting around 110 cents a litre.

Mr Barr said that there is still room for prices to fall but conceded that large retailers had come to the table after significantly dropping prices in the last two weeks.

“I think there is room for [prices] to fall further. I will get a report on the national market, what the wholesale prices are, what the terminal gate prices are, we will then set a new target for retailers across the ACT,” he told ABC Radio this morning.

“From where we were two weeks ago was $1.20 a litre, and where we are now is about $1 a litre. It has worked.

“I think the petrol retailers, particularly the majors, have responded well to the position I put to them over the last two weeks, and Canberra has seen the greatest fall in petrol prices of any city in Australia over that time period.”

Petrol prices

What a difference a week makes. Petrol prices in the ACT on 29 April. Photo: Michelle Kroll, Region Media.

Petrol prices across Canberra will have to remain around the same price as the national average – which takes into consideration prices from the cheapest discount fuel to rural stations – to keep the government from intervening in the market, Mr Barr said.

“The challenge now, though, is to sustain this effort. What I have put to the major fuel retailers is that the benchmark price for the Canberra market that would not see the government intervene is the Australian average price for fuel across the nation,” he said.

“No one is saying petrol retailers cannot make a profit. The issue here is the size of that profit and what we have seen over the last two weeks is that with this sort of government intervention we can bring those profit margins down to a sort of Australian industry standard.

“That is exactly what we have done, but we need to keep this up now.”

According to Mr Barr, the ACT Government will not look to track every station down to a decimal point, but he expects the Canberra market to be around the national average price.

Operation and transport costs are a contributing factor to more expensive fuels in the capital as opposed to other major cities, a point Mr Barr has conceded can add six to seven cents a litre to the price of fuel. But he said this was no excuse for the exorbitant prices charged a fortnight ago.

Competition in the sector is a concern for the ACT Government. Last week Mr Barr said he had written to half a dozen retailers inviting them to open service stations in Canberra to help drive downward pressure on prices through increased competition.

In the immediate term, competition will fall. Costco Wholesale, consistently the cheapest fuel outlet in the ACT for its members, announced it was closing its pumps from 14 May until mid-June to expand its services, further weakening competition in the market for a few weeks.


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39 Responses to Petrol retailers blink after Barr ultimatum
teddy bear teddy bear 8:11 pm 07 May 20

Barr has done nothing about petrol price gouging in Canberra for decades. The community and media should have pushed him much harder to do something like this.

Hamish Sinclair Hamish Sinclair 7:23 pm 06 May 20

add the 4 cents for real price and its a clear two fingered salute to the chief minister!

Michael Woodhead Michael Woodhead 6:17 pm 05 May 20

The NRMA really backed Barr's actions.

Paul Chubb Paul Chubb 3:57 pm 05 May 20

It is not the retailers. They just add about 2c per litre to the price they pay. It is the wholesalers that decide the market price.

bilba bilba 9:58 am 05 May 20

If you are a Caltex service station in Canberra that is independently owned your current buying price for E10 is 95.01 cents per litre. Transport costs are 4.5 cents per litre. Which one of you would be happy to run a business where the government can tell you that you are now only allowed to make 0.5 cents per litre because its an election year. All that is going to happen from this is the major companies will buy the remaining independent Canberra owned fuel stations and the price will go back up and stay up. What happens when Andrew Barr gets a leaky tap at home and he isn’t happy with the call out cost for the plumber?

    JC JC 11:35 am 05 May 20

    That’s always the problem isn’t it? In a free market it is near impossible to regulate prices, someone wins someone looses. Though I guess the bigger issue for the independents is the same as the motorist which is price gouging by the petrol supply companies. If the gate price for company owned sites is X that should be the gate price for independents who they supply.

    Out of interest the Canberra times article says there are 9 genuine independent service station sites in Canberra but didn’t name them. Can you name them so that people who care can actually support them?

    Reading comments here and elsewhere I don’t think many people actually understand what an independent service station really is.

    I don’t think most understand that true independents mostly carry oil company branding and service stations calling themselves independent (Metro/United) are not really as independent as they portray themselves.

    bilba bilba 4:45 pm 05 May 20

    Not sure exactly, I know the Fyshwick BP and Fyshwick Caltex are independent. The new BP at Nicholls is independent as well.

Tim Welch Tim Welch 8:44 am 05 May 20

We’re still paying $1.19.9 here in Tasmania with only one rogue servo selling at $1.05.9! It’s a ripoff! 🤬

    Graeme Jacobson Graeme Jacobson 8:58 am 05 May 20

    Tim Welch I paid 109.9 in Westbury last week, Launceston, Elizabeth Town, Sassafrass, Devonport and Ulverstone were averaging 125.9cpl.

    Deb Johnston Deb Johnston 1:59 pm 05 May 20

    agree Tim Welch - we're averaging 124.9 here in Burnie

Mat Kenna Mat Kenna 8:34 am 05 May 20

Diesel hasn't shifted and I dare say the Premiums haven't either

Ollie Raymond Ollie Raymond 8:25 am 05 May 20

It's well under 90c everywhere on the NSW Central Coast ...

    Richard Jones Richard Jones 7:13 pm 05 May 20

    Ollie Raymond that’s because the coast in awesome lol

Scott Malpass Scott Malpass 7:45 am 05 May 20

With Costco shutting their fuel bowsers from mid May to Mid June for upgrades. You need to keep monitoring the others!! Price gouging

Ricky Toms Ricky Toms 6:56 am 05 May 20

Yet diesel is still high

Alex Troy Elsworth Adkins Alex Troy Elsworth Adkins 6:13 am 05 May 20

Did it work? From what I gather the price of diesil has stayed high for no apparent reason and most places are still selling U91 over $1... still waiting for the Cheif Minister to put his money where his moth is and take action!

Gabriel Spacca Gabriel Spacca 12:16 am 05 May 20

Can we attempt to make this a permanent situation rather than a one-off sabre rattling exercise. There’s no logical reason why we should be able to fill up in Goulburn for 10c per litre less than in Canberra.

    Leigh Brady Leigh Brady 7:09 am 05 May 20

    He has indicated that it is a permanent threat. You must have missed that bit when reading the article.

    Ashley Wright Ashley Wright 7:27 am 05 May 20

    Gabriel Spacca I say this every time someone makes a claim that Goulburn (or any other NSW rural town) is cheaper than Canberra. Yes you have a couple of servos in Goulburn that are dirty cheap, same as in Canberra actually.

    You also have two service stations quite close to the highway that are often very expensive too, just like some in Canberra.

    But a quick look at price comparison websites shows that the bulk of the servos in Goulburn sell for much the same price as the bulk of the sites in Canberra.

    So a tad hard to make a blanket statement Goulburn is 10c cheaper.

    Is Canberra paying too much? Yes. Is Goulburn paying too much? Yes.

    Karen Feng Karen Feng 9:15 am 05 May 20

    Gabriel Spacca I cant believe i use to whine about 70 cents per litre. than 80 cents and than 90 cents

    Gabriel Spacca Gabriel Spacca 12:04 pm 05 May 20

    Leigh Brady Yes. And successive governments have said the same in previous times. But to date the threat has never been carried through. Remember that app that was meant to advise us of the cheapest price in Canberra? I stand by my first statement. Let’s make sure this continues when oil prices rise again, and we keep within an acceptable level of the other major centres.

    Ashley Wright Ashley Wright 8:13 pm 05 May 20

    Gabriel Spacca there are plenty of apps that can tell you the price. Why does it need to be a government app?

    And Goulburn as a whole is never 10x cheaper. Just like QBN isn’t either.

Tina Newsome Tina Newsome 11:41 pm 04 May 20

Still much cheaper at Costco for 91.

    Tina Newsome Tina Newsome 11:42 pm 04 May 20

    Also watch our prices go back up again when Costco closes for expansion

    Ashley Wright Ashley Wright 7:17 am 05 May 20

    Tina Newsome has a lot to do with the fact that Costco basically sells its petrol at cost and has little staffing costs at the station. The bulk of their profit is from membership sales.

Robyn Holder Robyn Holder 11:30 pm 04 May 20

It took till today to go down to around $1. It should be 90c.

Deb Meuronen Deb Meuronen 11:03 pm 04 May 20

It won’t last long -as soon as people start moving around more in their cars up she goes 🚗💨💸💸⛽️

Andrew Turnbull Andrew Turnbull 10:52 pm 04 May 20

89.9 in Melbourne, around 80.9 for E10

Steven Lloyd Steven Lloyd 10:42 pm 04 May 20

Still not enough

Kerrie Buitendam Kerrie Buitendam 10:31 pm 04 May 20

Is certainly hasn’t come down very much in the south 😡

Tod Davis Tod Davis 10:23 pm 04 May 20

Pity about diesel

    Karl Hock Karl Hock 7:15 am 05 May 20

    Tod Davis BP yass road and BP Fyshwick seem to have it the cheapest, 104 yesterday. Im guessing costco would be about the same

Ozi Cavusoglu-Rucinski Ozi Cavusoglu-Rucinski 10:19 pm 04 May 20

Aidan Hempstead can you hoard petrol?

    Aidan Hempstead Aidan Hempstead 10:19 pm 04 May 20

    Ozi Cavusoglu-Rucinski sure why not

    Geoff Richardson Geoff Richardson 10:36 pm 04 May 20

    Ozi Cavusoglu-Rucinski no it goes off, is loses it's potency after a while!

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