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Petrol rip-off continues….

By Mr Gillespie 23 June 2012 38

Is it just me or has anyone else noticed that Sydney is enjoying falling petrol prices while Canberrans continue to be slugged 30¢/litre extra? How is it that they pay just $1.20 a litre while we still have to pay $1.50 every time we have to fill up?

If anyone else has noticed this rather large difference, why isn’t anyone rising up in protest against this disgrace?

Has anyone ever asked the petrol station attendant or store manager why they have to pay this much while Sydneysiders enjoy their weeks in the sun in lower fuel prices? If so, please report to us how they explain to you the price difference in Canberra compared to Sydney.

What’s Your opinion?


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Petrol rip-off continues….
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jayskette 12:23 pm 24 Jul 12

Well, the actual price difference isn’t all that great considering Canberra still sell normal unleaded petrol and NSW has outlawed that ages ago. You will find the prices for unleaded here is just slightly higher to E10 in Sydney.

So I tend to not fill up too much in Canberra but rather wait until I go to Sydney to fill up with 98 Octane which is the same price as unleaded here… but that’s besides the point

Holden Caulfield 11:53 am 24 Jul 12

Petrol has been pretty cheap (relatively speaking) lately. Up to 20¢ per litre less for 98RON than I was paying around the time this thread was started,

gazket 8:23 pm 11 Jul 12

cheapest fuel in Sydney today Caltex/Woolworths Blakehurst $117.9.

The big wanker that is the petrol commissioner is really earning his money. What does this prick do besides sitting on his fat arse in his luxury office. More Labour waste

Tetranitrate 5:54 pm 11 Jul 12

devils_advocate said :

Jivrashia said :

devils_advocate said :

More available cash = greater demand.

No, the demand is steady.

In the short run, it is true that demand for petrol is relatively inelastic (i.e. unresponsive to price). But it is still downward sloping. There is some demand side response – ie more people catching the bus when petrol prices get really high.

In the long run, demand is much more elastic. In terms of petrol, people can migrate to smaller and/or more fuel efficient cars (or indeed, different types of fuel, hybrid, or abandon fuels altogether – electric cars). There are indications that this is happening.

But in canberra, people have relatively high incomes and their demand is less sensitive. Also we presume petrol is a normal good – i.e. as income rises, consumption rises. So, while the demand may be “steady” within the ACT, it will be relatively higher compared to other areas with less income that are more price sensitive.

While we’re regurgitating economic theory, I might as well point out that the demand is utterly irrelevant if the market is competitive, since supernormal profits will attract new entrants.

Unless there’s an explanation for the whole differential based on costs (which I doubt), it’s reasonable to conclude that we’re being ripped off.

Jivrashia 4:52 pm 11 Jul 12

devils_advocate said :

But in canberra, people have relatively high incomes and their demand is less sensitive. Also we presume petrol is a normal good – i.e. as income rises, consumption rises. So, while the demand may be “steady” within the ACT, it will be relatively higher compared to other areas with less income that are more price sensitive.

In a nutshell what you’re saying is
The big corporations will charge the maximum of what people can afford. And Canberran can afford more than Sydney or Melbourne people.

This is going to turn into a moral debate so I’m just going to stop right here.
But the title of this thread is ACCURATE. We are being ripped-off.

devils_advocate 4:09 pm 11 Jul 12

Jivrashia said :

devils_advocate said :

More available cash = greater demand.

No, the demand is steady.

In the short run, it is true that demand for petrol is relatively inelastic (i.e. unresponsive to price). But it is still downward sloping. There is some demand side response – ie more people catching the bus when petrol prices get really high.

In the long run, demand is much more elastic. In terms of petrol, people can migrate to smaller and/or more fuel efficient cars (or indeed, different types of fuel, hybrid, or abandon fuels altogether – electric cars). There are indications that this is happening.

But in canberra, people have relatively high incomes and their demand is less sensitive. Also we presume petrol is a normal good – i.e. as income rises, consumption rises. So, while the demand may be “steady” within the ACT, it will be relatively higher compared to other areas with less income that are more price sensitive.

VYBerlinaV8_is_back 3:53 pm 11 Jul 12

Compared with the costs of depreciation, servicing, insurance, rego and tyres (and for some the cost of finance) a few bucks here or there for petrol isn’t a big deal.

I only fill up every couple of weeks anyway.

wildturkeycanoe said :

I got ripped off yesterday. Pressed the $20 limit on the bowser, sat back and waited for it to finish. It went over by 11 cents!!! I tried to explain I only wanted $20 and the machine stuffed up, he wouldn’t listen. What would have happened if it went $5 over, or $30 over? I’m glad I had 10c in my back pocket or I’d have had to walk 30km home to get some change.

You would not have to walk home. You could leave your licence with them and come back.

As I understand it, if you fill your car up with petrol and leave without paying, you can not be charged with theft, rather you have to be charged with breach of contract, as by allowing you to fill up your car prior to paying, the petrol station is effectively extending you credit and your refusal to pay is then not meeting the implied terms of your contract.

Deref 2:13 pm 11 Jul 12

Jivrashia said :

devils_advocate said :

More available cash = greater demand.

No, the demand is steady. Unless a significant portion of the population suddenly change their daily habit there is no change in the demand.

In anyone’s language what the petroleum companies are doing is price gouging. They are exploiting the population’s weekly behaviour.

But other retailers do the same thing? No. Paying stupid amount of money for something at the airport or at a 24/7 convenient store is a consumer’s choice. Petroleum companies, on the other hand, are simply striking working families where it hurts.

And why isn’t the government doing something about it? Well, they punish the population in the same way as the petroleum companies. Ever notice how the ticket price on Sydney’s state rail differs between peak and off-peak?

Australia is a third world country when it comes to price of commodity. Retailers are always screw the Australian consumers. (although internet shopping has levelled the playing field to a certain degree)

All true.

If only we could buy petrol online.

Jivrashia 2:07 pm 11 Jul 12

devils_advocate said :

More available cash = greater demand.

No, the demand is steady. Unless a significant portion of the population suddenly change their daily habit there is no change in the demand.

In anyone’s language what the petroleum companies are doing is price gouging. They are exploiting the population’s weekly behaviour.

But other retailers do the same thing? No. Paying stupid amount of money for something at the airport or at a 24/7 convenient store is a consumer’s choice. Petroleum companies, on the other hand, are simply striking working families where it hurts.

And why isn’t the government doing something about it? Well, they punish the population in the same way as the petroleum companies. Ever notice how the ticket price on Sydney’s state rail differs between peak and off-peak?

Australia is a third world country when it comes to price of commodity. Retailers are always screw the Australian consumers. (although internet shopping has levelled the playing field to a certain degree)

devils_advocate 1:34 pm 11 Jul 12

Jivrashia said :

devils_advocate said :

The prices more closely track supply and demand conditions

I could have sworn the price reflects the availability of cash amongst Canberra’s APS.

If you don’t believe me observe the price on every second Thursday. The price gap between the morning and the afternoon is as bad as Zimbabwe’s inflation.

More available cash = greater demand.

JessP 11:59 am 11 Jul 12

Slumlord said :

As a bit of a side comment, Canberra has to be the most apathetic town in the world.

We put up with every project being undertaken by the ACT government turning into a complete fark up while barely raising an eyebrow. And we put up with this petrol rort. What is it with people in this place? As Mark Gasnier once put it – FIRE UP!

+1

Jivrashia 11:41 am 11 Jul 12

devils_advocate said :

The prices more closely track supply and demand conditions

I could have sworn the price reflects the availability of cash amongst Canberra’s APS.

If you don’t believe me observe the price on every second Thursday. The price gap between the morning and the afternoon is as bad as Zimbabwe’s inflation.

devils_advocate 10:02 am 11 Jul 12

Pork Hunt said :

Further to Mr Gillespie’s excellent question, why is petrol the only consumer (?) product sold the way that it is?
The price of piss at the grog shop doesn’t wax and wane (specials aside).
The price of Kleenex date rolls doesn’t swing wildly?
Moo juice is the same price day in day out.
Pedigree (in case there are pensioners reading this), was the same price last week as it is this week and will be next week.

WTF is it with petrol?

All those prices move to a degree. The price volatility is just less (although booze prices do move a lot).

Some answers:

-Petrol is a homogenous commodity, for the most part. The fact that diesel, premium, e10 and unleaded are more or less the same from one servo to the next means that really, they are only competing on price. Other products can charge more of a margin because they might be in a differentiated product market and be able to exert some market power.
-Petrol is turned over very quickly. The prices more closely track supply and demand conditions, which impact on price. Whereas, to use your booze example, a bottle of scotch is more likely to represent a long run average of various costs in the supply chain, over at least 12 years.
– Moo juice (I presume you mean milk, I don’t know if there is a brand called this) does fluctuate. Have a look at the shenanigans over the $1 per litre milk recently.
– Petrol is probably more seasonal in terms of demand (globally), also it is largely dependant on the Singapore price, and therefore influenced by swings in the exchange rate, and also movements in the commodities futures markets.

So all those tend to contribute to price volatility.

pirate_taco 9:15 am 11 Jul 12

The Antichrist said :

WTF is going on here ? Why is this place so apathetic towards such massive price-gouging in the ACT at the moment in petrol costs ???

Its an absolute joke that nothing is being done to address the massive disparity in fuel costs between here and Sydney. We just bend over and cop it sweet here in good old Canberra……..pissweak it is.

How do you propose that we not “bend over and cop it sweet”? Drive to Sydney to fill up?
Petrol demand is inelastic past the fluctuations in the weekly cycle and events such as long weekends, and driving to Sydney to get your fuel cheaper isn’t practical.

A scheme such as the WA Fuel Watch may be a good idea to improve competition.
Any WA-ers here able to comment on the scheme’s effectiveness?

The Antichrist 9:40 pm 10 Jul 12

well the rip-off continues its merry way.

111.5 cents per litre tonight in Sydney. Average price around the ACT varies between 134 and 138 cents.

WTF is going on here ? Why is this place so apathetic towards such massive price-gouging in the ACT at the moment in petrol costs ???

Its an absolute joke that nothing is being done to address the massive disparity in fuel costs between here and Sydney. We just bend over and cop it sweet here in good old Canberra……..pissweak it is.

Sandman 6:38 pm 25 Jun 12

Woody Mann-Caruso said :

Meanwhile, at Big Oil:

– Let’s collude! We’ll agree on an artificially high price! We’ll make out like bandits!
– Excellent idea. Where should we do it?
– Canberra. It has…*pinky*…almost 360,000 people.
– God, man, that’s tremendous!
– Yes, I can’t think of anywhere else we should be colluding! Certainly not a massive coastal metropolis!
– Oh yes, mustn’t do anything funny with the price in a place with millions of people, where we’d only have to make small changes and collude on a much smaller scale to get the same result, drastically reducing our chance of being caught. Much better to do it where regulators live and work, and to price gouge by a truly massive amount in a tiny market that requires 100 per cent collusion!
– Then we’re agreed! We’ll set the price 30c higher!
– Or, or, stay with me, now – we just set it 15c higher, and have everybody think it’s 30c higher?
– Come now, who’d be stupid enough to stuff up simple arithmetic like that?
– Gillespie lives in Canberra, you know.
….
– BWAAAHHAAAHAAA!

Damn you Woody. I was reading through the thread all prepared to make some smartarse comment about this massive hole in the collusion conspiracy theory only to get beaten to the punch. Well written though. Wonder how a Clarke/Dawes style satirical street performance would go in Civic with a series of skits related to current events.

Chop71 9:01 am 25 Jun 12

The gumbymint tries to influence what supermarkets can open where and when yet they don’t seem to do much re petrol stations. Watch both sides of politics jump over this as an election issue with lots of talk and mnimal action.

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