A report by the Australian Competition and Consumer Commission (ACCC) has found that a more competitive fuel market in Launceston could save motorists 4¢-5¢ per litre on a sustainable basis.
The ACCC’s analysis found that the main factors leading to higher prices in Launceston were higher transport and operating costs, and higher retail margins and profits. The report outlined that since the Royal Automobile Club of Tasmania (RACT) and United struck a discount deal in March 2016, the difference in petrol prices between Launceston and Australia’s five largest cities has decreased.
Between 2012 and 2015, Launceston drivers paid on average 12cpl more than those in the five major cities. Following the introduction of the RACT/United deal, Coles Express and Woolworths launched their own shopper docket discount schemes. This led to fuel prices in Launceston being 2cpl cheaper between March and April 2016, while the prices across the five major cities rose 6cpl.
“The downward pressure on retail petrol prices, particularly due to this discounting agreement, is a clear indicator that competition is the best way to create lower prices for motorists,” ACCC Chairman Rod Sims said. “The RACT and United offer has brought about a response from other fuel retailers, resulting in increased competition and lower prices for consumers. Discounting initiatives combined with greater price transparency can lead to direct benefits for consumers.”
The report is part of a program launched by the federal Government in December 2014 for the ACCC to monitor the prices, costs and profits of unleaded petroleum products in Australia for a period of three years for all capital cities and more than 190 regional locations across Australia.