Average petrol prices for the quarter up to the end of December 2015 were lower than previous quarters, but not as low as might have been expected given lower crude oil prices, according to the Australian Competition and Consumer Commission (ACCC).
The ACCC’s fifth quarterly report into the Australian petroleum industry found that the quarterly average price in the five largest cities was 124.4 cents per litre (cpl), which was 8.8 cpl lower than the previous quarter and 11.4 cpl lower than in the June quarter 2015.
“This decrease in prices over the quarter was welcome news for motorists,” ACCC Chairman Rod Sims said.
“However, retail petrol prices were not as low as might have been expected given the level of crude oil prices. There are two reasons for this. Firstly, there were high refiner margins during the quarter.”
Brent crude oil prices in December 2015 were at their lowest level in more than 11 years, and were significantly below their long-term average. The annual average difference between crude oil and international refined petrol in 2015 was around 16 US dollars a barrel, compared with an annual average of around eight US dollars a barrel over the past 20 years.
“The second factor was the high gross retail margins in Australia in the quarter,” Mr Sims said.
Gross indicative retail differences (GIRDs) are indicative of the margins achieved by retailers on the sale of fuel, and may reflect overall retail profits. The ACCC’s September quarter 2015 report had noted that quarterly average petrol GIRDs in the five largest cities (11.8 cpl) were at their highest level since the ACCC began monitoring in 2002. In the December quarter they increased further, by 0.6 cpl to 12.4 cpl.
“The ACCC believes that retail prices have been unreasonably high in the second half of 2015 and in early February 2016 wrote to the major petrol retailers seeking an explanation for the high retail margins,” Mr Sims said. “I expect to receive their responses shortly.”
In December 2015 the ACCC’s Federal Court proceedings against Informed Sources and five petrol retailers (7-Eleven, BP, Caltex, Coles, and Woolworths) were resolved by way of court-enforceable undertakings.
As part of the resolution, from May 20, 2016 Informed Sources will make price information available to consumers for free on a near real-time basis at the same time as it is received by retailers. The pricing information exchanged between petrol retailers will also be made available to third parties, including app developers and motoring and consumer organisations.