"Fair Go" – ACCC to petrol retailers

Petrol retailers need to immediately bring petrol prices in line with movements in their own proclaimed international benchmark of Singapore Mogas 95 unleaded petrol, Australian Competition and Consumer Commission Chairman, Mr Graeme Samuel, said today.

Mr Samuel today called on petrol retailers to give motorists a fair go.

"In January this year I indicated that the ACCC would not generally comment if petrol prices move in line with the international benchmark. But if there is a marked disparity, allowing for the usual time lag of around seven and 10 days between movements in Singapore prices and Australian average retail prices, the ACCC will comment publicly," Mr Samuel said.

"Towards the end of May the Singapore benchmark price significantly declined. While there has been a decline in Australian terminal gate prices (ie. wholesale prices), the average retail price at the bowser across the major capital cities has continued to increase. This indicates that while the lower international prices are being reflected at the wholesale level, they are not being passed on to Australian motorists by retailers."

In light of the recent movements in the Singapore benchmark price, and allowing for the lags involved, Australian retail prices should be declining.

It is consistently maintained that retail prices for petrol in Australia are governed generally by the Singapore Mogas 95 Unleaded international benchmark.

"I call on the petrol retailers to immediately give Australian motorists a fair go and drop their pump prices in line with recent international price movements."

"If petrol retailers are genuine about their commitment to keep petrol prices in Australia in line with the international benchmark, they need to pass on the wholesale price savings as soon as possible to motorists who are preparing for a long weekend."

Background

The ACCC monitors average retail petrol prices in Australia and compares them with movements in the Singapore Mogas 95 Unleaded price, which is the international benchmark price for the region.

There is usually a time lag of between seven and 10 days between movements in the Singapore petrol price and Australian retail petrol prices.

In making its comparisons with the Singapore international benchmark, the ACCC averages prices over a seven-day period to take account of the regular price cycles.

The ACCC publishes information on its website about petrol price cycles and encourages consumers to learn how to take advantage of them.

Regular price cycles occur predominantly in the five major metropolitan markets – Sydney, Brisbane, Adelaide, Melbourne and Perth – overwhelmingly tending to peak on Thursdays and trough on Tuesdays. Some cycles occur in Canberra, but are not regular. Regular price cycles do not generally occur in Darwin, Hobart and in country areas.

The ACCC is aware that the difference in petrol prices between city and country areas is a concern for many motorists in regional and rural Australia. Country prices are generally higher than city prices because of locally specific factors. Movements in country prices also tend to lag behind that of the cities. There is less competition in country areas; fuel stocks are replenished less frequently and sales are lower.