Fuel in regional Australia
Petrol prices in regional locations are generally higher than those in the capital cities. They are also more stable, as there are only a few regional locations with petrol price cycles.
Movements in retail petrol prices in regional locations are largely driven by changes in international refined petrol prices and the AUD–USD exchange rate, just as they are in the five largest cities.
However, the extent to which petrol prices in each regional location are influenced by changes in international refined petrol prices varies between locations, depending on the specific characteristics of each regional location.
Petrol prices in regional Australia change more slowly than in the five largest cities—both up and down—because retailers in many regional areas tend to have lower stock turnover than city sites.
Regional prices tend to be more stable than prices in the five largest capital cities, which generally move in cycles.
Fuel prices are generally higher in regional Australia due to:
- lower population and demand resulting in fewer outlets, leading to less competition
- higher costs for transport and storage of fuel
- less demand for convenience sales like drinks, food and newspapers that can enable retailers to add to overall profits and keep fuel prices lower
- the location of outlets–whether or not they are on a highway and likely to get a high number of customers.
Regional fuel retailers don’t usually sell their fuel stocks as quickly as city retailers, so when there is any change in the international benchmark and wholesale prices of fuel it generally takes longer to impact on country retail prices.
While prices in regional areas might fall slowly they also tend to rise more slowly.
The ACCC monitors fuel prices in around 180 regional areas across Australia and receives enquiries and complaints from consumers and businesses. Due to the limited number of retail sites in many country towns, the ACCC also pays particular attention to potential changes in ownership to ensure that a sale will not result in a substantial decrease in competition.
When we identify a particular concern about petrol prices in a regional area we:
- review recent price movements and the structure of the local market
- may visit the town and talk to local retailers to determine whether there is a need for further investigation.
If we believe any retailers have broken competition and consumer laws, we will investigate the issue further and may take action.