The Australian Competition and Consumer Commission today issued its report on movements in the price of unleaded petrol, diesel and auto liquefied petroleum gas (LPG) in the first three months of the New Tax System.
The analysis showed that price movements from the week ended 30 June to the week ended 29 September for unleaded petrol, diesel and LPG were:
Unleaded Petrol
- the average unleaded petrol prices in the capitals increased in the range of 3.1 cents per litre for Hobart to 12.3 cpl for Melbourne (which was affected by the fuel blockade in late September), with the average increase being 8.3 cpl; and
- average unleaded petrol prices in country areas increases in the range of 7.7 cpl in Queensland to 9.5 cpl in Victoria, with the average increase across all country areas being 8.5 cpl.
Diesel
- average diesel prices in the capitals increased in the range of 12.7 cpl for Hobart to 18.1 cpl for Melbourne, with the average increase being 16.9 cpl
- average diesel prices in country areas in the range of 14.9 cpl for Tasmania to 17.3 cpl for Western Australia, with the average increase being 16.1 cpl.
LPG
- average LPG prices in the capitals increased in the range of 3.1 cpl for Perth and Canberra to 9.5 cpl for Melbourne, with the average increase being 5.3 cpl
- average LPG prices in country areas increased in the range of 4.5 cpl for South Australia to 5.7 cpl for the Northern Territory, with the average increase being 5.0 cpl.
The monitoring and analysis in this report focused on industry-wide price movements. Price movements for individual businesses may not be strictly in line with industry averages and no conclusions should be inferred about individual business prices.
"Most fuel prices have risen further since 30 September but these are not dealt with in the report," ACCC Chairman, Professor Allan Fels, said today. "A breakdown of prices by capital cities and by State is available in the report.
"As consumers will be well aware fuel prices are quite volatile. This means that price movements needed to be assessed over an extended period to determine the effect of the underlying factors on price movements. These factors include international rice movement, the Australian/US dollar exchange rate, Federal and State/Territory excise and taxes and discounting in the market.
"All of these factors have had an effect on fuel prices in the September quarter, especially rises in international prices together with the fall in the value of the Australian dollar.
"The local discount cycle has influenced prices, especially for unleaded prices in metropolitan areas. The New Tax System has also contributed to the extent that the excise rate has been reduced, the Goods and Services Tax introduced and local industry costs have been affected. As the GST is based on a percentage of the price, it has risen due to increases in international prices.
"The ACCC has assessed the cost savings that the oil companies could expect from the New Tax System and concluded that cost savings of up to 1.6cpl were possible but the timing of these savings is uncertain, largely due to the dollar's volatility.
"It is difficult to exactly break down the different components that have affected fuel prices in the review period. In the case of unleaded petrol and diesel, the ACCC has developed a retail import parity indicator against which actual price movements are assessed. This indicator takes account of the key underlying factors affecting unleaded petrol and diesel prices, including international prices, exchange rates and taxes.
"The ACCC concluded that over the September quarter:
actual unleaded petrol prices were below the retail import price indicator by 1.65 cpl for the five major metropolitan cities; and
actual diesel prices were below the retail import price indicator by 2.93 cpl for the five major metropolitan cities.
"In the case of LPG, such an indicator could not be used so the ACCC examined actual price movements against movements in the factors affecting LPG prices. It concluded that actual price increases in the capitals in the review period were lower than expected.
"The ACCC analysis suggests actual fuel prices have not risen as much as expected. There may be a number of reasons for this:
- anticipated cost savings arising from the New Tax System may have been reflected in prices allowing gross margins to fall
- competition may have restrained the extent to which companies have been able to raise prices
- consumer resistance to prices rising above $1.00/litre may have impacted on pricing decisions; and
- a lag in the adjustment of domestic prices to the rapid rise in international prices during the quarter may have also contributed to this result.
"The gap between city and country prices varied from one location to another and tended to narrow in the second half of the quarter. This gap will be kept under close scrutiny. The ACCC is continuing in-depth investigations of whether or not oil companies have passed on, or pocketed, some or all of the Fuel Sales Grant Scheme intended to benefit country motorists. The investigations involve in-depth examination of documentary material and examination of business witnesses. It is likely to continue for some time.
"The ACCC will continue to monitor and analyse movements in unleaded petrol, diesel and LPG prices across Australia".