The Australian Competition and Consumer Commission today issued a discussion paper on reducing fuel price variability.
"Many consumers are annoyed and frustrated at petrol price fluctuations", ACCC Chairman, Professor Allan Fels, said. "This paper canvasses a range of options for limiting them. The ACCC invites comments on those options as well as views on the causes and implications of petrol price fluctuations".
In early March 2001, the Government requested the ACCC to examine the feasibility of placing limitations on petrol and diesel retail price fluctuations throughout Australia. Since receiving that request, the ACCC has held preliminary discussions on this issue with a range of industry participants and other interested parties. Following those consultations, the discussion paper was prepared.
"One of the options available to limit petrol price fluctuations is to only allow prices to be changed once a day. This is already in place in Western Australia, as part of a comprehensive petrol pricing package, parts of which are still being introduced.
"The ACCC is aware that some of the industry participants in Western Australia - and particularly independent operators - have concerns about these arrangements. The Western Australian Chamber of Commerce and Industry has also been critical recently of the Western Australian package.
"It is too early to assess the implications of the Western Australian arrangements on petrol prices. However, the paper shows that while average weekly petrol prices in Perth were lower than those in Sydney and Melbourne immediately after the 24 hour rule was introduced, by May 2001 Perth's prices were higher than those in Sydney and Melbourne".
The paper notes that retail petrol price volatility is generally confined to the major capital cities and some strategically located rural towns on major highways. Retail diesel prices in metropolitan areas do not display short-term price volatility.
In the period January to April 2001, the average petrol price increase between the trough of the price cycle and the peak of the price cycle in Sydney was 5.0 cents per litre. In Melbourne it was 6.5 cpl.
A comparison of the 2001 data with data for same period in 1998 shows that the average petrol price increase between the trough of the price cycle and the peak of the price cycle in both Sydney and Melbourne was higher in 2001 than in 1998. In 1998 in Sydney the average increase was 1.6 cpl and in Melbourne the average increase was 4.0 cpl.