ACT News

Wholesale petrol prices drop to lowest level in 18 months as fuel excise kicks in

Canberra motorists paid an average 17c more a litre than Sydney-siders last week.

Petrol prices in Canberra remained among the most expensive in Australia last week, despite the national wholesale price falling to its lowest level in 18 months and the fuel excise taking effect on Monday.  

Canberran motorists paid an average of 151.2¢ a litre at the bowser last week, which was 17¢ more expensive than the average price in Sydney and 22¢ more expensive than prices in Adelaide. 

According to the Australian Institute of Petroleum, the national average price of unleaded petrol fell by 3.4¢ a litre to 140.5¢, while the average metropolitan price fell by 4.6¢ to 136.8 a litre. 

Commsec economist Savanth Sebastian said the national average wholesale price of unleaded petrol fell to an 18-month low of 129.3¢ a litre, with the terminal gate price falling by more than 10¢ a litre in the past month. 

Mr Sebastian said prices had dropped sharply as expected and would continue to fall in coming weeks. 

"We expect prices to fall a few cents further in most capital cities, although prices are close to bottoming," he said.


Finance Minister Mathias Cormann has responded to industry concerns by saying the fuel excise would have minimal impact on communities across Australia and build a "stronger, more prosperous economy".

"A typical household using about 50 litres of fuel a week will pay an extra 40¢ a week for their petrol by the end of this financial year," he said.

There was little sign of a price hike on Monday morning in Canberra, with three petrol stations in Fyshwick (Coles Express, United, 7 Eleven) all charging 149.5¢ a litre and another in Braddon charging 151.5¢ a litre.

Dr Paul Burke, an economics fellow at the Australian National University, said the excise was "a pretty sensible change" despite industry concerns and most Canberrans would not notice a difference.

"The change makes sense, as a good source of revenue would otherwise continue to erode away over time," he said. 

"It's a very small increase and it will be even smaller for those of us who drive less, but the price will go up a tiny bit and we should expect consumers to respond accordingly."

Mr Cormann's assurances have not satisfied some motoring associations who have described the tax as "pure revenue raising".

NRMA ACT director Alan Evans has said the excise would only add to the already high cost of petrol in Canberra, which he attributed to a lack of competition.

"There are only two to three independent petrol stations in Canberra and they alone are not going to impact the average cost of petrol prices in Canberra," he said.

"The owners of petrol chains in Canberra are very willing to compete on grocery prices but leave their fuel prices as almost identical, which means the motorists suffer."

NRMA president Kyle Loades said the fuel excise would add to financial pressures on motorists who already contribute more than $15 billion of revenue through existing taxes.

"Petrol prices in Australia are already the most volatile and unpredictable of all the essential commodities families rely on every day - on this, motorists look to their government to make things better - not worse," he said.

Dr Burke said the fuel excise could have an impact on the fuel economy of Australian cars, given our relatively low petrol costs.

"We have the lowest petrol price in the OECD outside North America, principally because our petrol tax is low compared to European countries and Japan," he said. 

Canberra MP Gai Brodtmann said ACT residents would be worse off.

"I know many Canberrans who are already struggling to make ends meet with the cost of living – many are concerned about public service job cuts – the last thing they need is to pay more tax every time they fill up the car with petrol," she said. 

Adelaide continued to have the cheapest petrol last week at 129.1¢ a litre, while motorists in Sydney and Melbourne paid 134.2¢ and 135.9¢ at the bowser respectively.

Hobart and Darwin are the only two cities to have more expensive petrol than Canberra, at 153.2¢ and 155.9¢ a litre respectively.