Fuel prices have spiked across capital cities. Is Coles Express to blame for the latest price shock to shake Australia?
One industry commentator, FUELtrac’s Geoff Trotter, seems to think so, according to a report in The New Daily.
“We (FUELtrac) track price movements and almost inevitably, the price leader in every city are Coles Express stations,” he said.
“It all starts at Coles Express stations. The reason they are leading the prices is they’re making up for the loss in their refining margin.”
The “refining margin” refers to the gap between the price of unleaded fuel and the price of crude oil.
The cost of unleaded fuel has slipped from $118 a barrel around April 24 to $106 a barrel on Thursday last week. This is a 10 per cent drop within a fortnight.
Mr Trotter said: “With crude prices now around the same as the wholesale unleaded price (about $106), oil companies aren’t making that (refining) margin, and so they’re having to play catch-up.
“Whatever an oil company loses in refinery margin, they try to recoup in retail margin.”
Mr Trotter cites several examples of Coles stations raising prices that then ripple out through neighbouring stations.
One example is the north-eastern Brisbane suburb of Deagon last Thursday. Coles Express Deagon moved to 167.0 cents, which quickly spread to neighbouring stations, reaching 167.9 cents. Even the usually cheaper independent 7-Eleven outlets weren’t immune. One, the independent Pacific Petroleum, raised its unleaded price to 165.9 cents.
Of course, price-tracking apps such as Motormouth are designed to help consumers find the cheapest price. But Mr Trotter says they’re also helping competitors quickly detect and match price movements, with Coles allegedly leading the way.
Certainly, the Australian Competition and Consumer Commission (ACCC) has repeatedly confirmed Coles Express as the highest-priced fuel seller nationwide.
But it’s also worth remembering that Coles Express isn’t Coles. In fact, Viva Energy both supplies Coles Express’s petrol and sets its prices.
This knowledge will offer cold comfort to Australian motorists at the bowser, however.