Brisbane’s motorists have been ripped off $50 million a year by greedy petrol companies maximising their profits while world oil production is low, Australia’s consumer watchdog has proven.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Motorists in Brisbane have been paying higher prices for petrol than other capital cities for eight years, the Australian Competition and Consumer Commission has revealed in a review.
The report - the first that measured the profit margin on petrol - was ordered by federal Treasurer Scott Morrison in December. Reports on petrol profit margins will be released quarterly.
Petrol companies put bigger price margins on petrol in Brisbane between September and December 2017 than in anywhere else in Australia, the latest report shows.
Between those months Brisbane motorists paid 4.3 cents a litre more for premium unleaded petrol.
“The cost to motorists in Brisbane of higher petrol prices has been significant, at around $50 million per annum,” the report found.
“The report also found that retail pricing is less competitive in Brisbane, with retailers setting prices higher at the top and bottom of the price cycle than retailers in Sydney.”
What else the ACCC report found:
“In the December quarter 2017 average retail prices in Brisbane were 138.5 cents per litre, which was 4.3 cents per litre higher than the average across the other four largest cities; Sydney, Melbourne, Adelaide and Perth,” it summarised.
The ACCC study found the increase between Brisbane’s petrol prices and the petrol price in other capital cities was the highest in eight years.
Part of the problem was only half the number of retail chain stores sold petrol in Brisbane than in Sydney and Melbourne, it found.
“Furthermore, Brisbane has fewer retail chains which price competitively and aggressively.
“Brisbane has only four retailers in this category: 7-Eleven, Woolworths, Puma Energy and United; while Sydney has seven: Speedway, Metro, Budget, Westside, United, 7-Eleven and Woolworths.”
Queensland Energy Minister Anthony Lynham met with RACQ head of public policy Rebecca Michael on Monday before the extent of the price discrepancy was known to Queensland motorists.
“We both agreed that the south-east Queensland market needs more competition,” Dr Lynham said.
The RACQ agreed to provide the Queensland government with its petrol price data and analysis.
“The next step will be discussion with fuel retailers, including our independent fuel retailers,” Dr Lynham said.
The Queensland government is cautiously looking at supporting a cross-industry fuel-watch app, which is in place in most other states and run by private companies in Queensland.
“Our bottom line is that we don’t want to create any red tape that will unintentionally drive up costs for motorists,” Dr Lynham said.
The Australian Competition and Consumer Commission report says fuel watch apps can work.
“Readily available information about current retail petrol prices enables motorists to shop around and purchase petrol at relatively lower-priced retail sites,” it says.
“Not only do motorists benefit from those lower prices, but the availability of petrol price data may promote competitive market behaviour.”
At this stage, the Organisation of Petroleum Exporting Countries (OPEC) has restricted world oil production until December 2018.
The price of a barrel of oil was $44.82 cents on June 26, 2017, and had risen to $66.39 on February 22, 2018.
However the ACCC’s chairman Rod Sims did not accept that the rising price of oil was the main reason for high petrol price margins.
“The ACCC accepts that some of the increase in gross retails margins has been due to these increased costs,” Mr Sims said.
“The information we have, however, indicates that this contribution does not explain the bulk of the increase,” he said.
