March quarter petrol prices at 17-year lows

The Australian Competition and Consumer Commission’s sixth quarterly report on the Australian petroleum industry shows that petrol prices decreased significantly in the March quarter of 2016.

The average petrol price in the five largest cities (Sydney, Melbourne, Brisbane, Adelaide and Perth) in the March quarter of 2016 was 111.0 cents per litre (cpl), which was 13.4cpl lower than in the previous quarter and 22.2cpl lower than in the September quarter, 2015.

The ACCC said these were the lowest quarterly petrol prices in inflation-adjusted terms since 1999.

“The low petrol prices were due to two main influences,” ACCC Chairman Rod Sims said. “Firstly, crude oil prices and international refined petrol prices in inflation-adjusted terms fell to lows not seen since 2002 and 2008, respectively. Secondly, gross retail margins decreased in the quarter.

“The ACCC believed that retail margins were unreasonably high in the second half of 2015 and wrote to the major petrol retailers in early February 2016 seeking an explanation for the high retail margins.”

The companies stated that issues including lags in the supply chain and higher operating and regulatory costs faced by the companies led to the high retail margins, with the ACCC to further analyse these issues in the coming months.

The report also noted that a number of petrol-price apps, such as GasBuddy, MotorMouth and the 7-Eleven Fuel App, were helping consumers seek out cheaper fuel.

“The release of these mobile apps, and more apps to come, will allow consumers to make better informed purchasing decisions and reward retailers who discount prices, therefore promoting greater price competition in petrol markets,” Mr Sims said. “This should also lead to downward pressure on retail margins.”

Prices in Brisbane remained high compared with the four other largest cities (4.8cpl above average), while Darwin’s price difference has decreased substantially compared with the previous year, from 21.3cpl above average to 9.6cpl above average.

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