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PETROLEUM INDUSTRY NEWS PETROL PRICES SLIGHTLY DOWN AS DEMAND REBOUNDS Petrol prices in Australia’s five largest cities stabilised at the end of 2020 after an unpredictable year and petrol sales volumes continued to recover from their earlier pandemic-driven slump. T he average retail price for petrol in the December quarter 2020 across Sydney, Melbourne, Brisbane, Adelaide and Perth was 121.4 cents per litre (cpl), a decrease of only 0.7cpl from the previous quarter, according to the ACCC’s latest petrol monitoring report. Of the five capital cities, Adelaide had the largest decrease in the average retail price (7cpl) in the December quarter, and Sydney had the largest increase (3.4cpl). Petrol sales volumes across Australia picked up in the December quarter and were on average six per cent lower than average sale volumes in 2019, compared with 28 per cent lower in the June quarter and 17 per cent lower in the September quarter. “Restrictions on travel and economic activity from the pandemic have had an enormous effect on petrol volumes and prices in Australia,” ACCC Chair Rod Sims said. “All motorists would have liked to see petrol prices remain at the record lows of April last year, but average prices in the December quarter were still about 30cpl below the 15-year inflation adjusted average.” Average gross retail margins in the five largest cities fell slightly in the December quarter, after hitting record highs in the September quarter, but remained well above historical levels. Gross indicative retail differences (GIRDs) are the difference between retail prices and terminal gate prices and are a broad indicator of gross retail margins. As GIRDs don’t account for retail operating costs, they shouldn’t be interpreted as actual retail profits. Average GIRDs in 2020, in inflation adjusted terms, across the five largest cities were 17.1cpl, an increase of 4.4cpl from calendar year 2019. This is the highest level on record in both nominal and inflation adjusted terms. The level of prices, costs and profits vary significantly between retail operations, and not all retail petrol sites will be achieving these gross margins. “Lower demand for petrol during the pandemic is likely to be a factor in the very high GIRDs we saw last year, as retailers may have increased their gross margins to offset the lower sales volumes,” Mr Sims said. “Given that sales volumes are almost back to pre-pandemic levels, we can expect GIRDs to fall this year as more normal conditions return. We’ll be watching very closely to see how petrol retailers respond.” Taxes higher than cost of fuel The December quarter 2020 was the third successive quarter in which taxes accounted for a larger proportion of the total price of petrol than the refined petrol itself. Mogas 95, which is the benchmark for refined regular unleaded petrol in the Asia Pacific region, and taxes together made up 78 per cent of the average price of petrol in the December quarter. 62 CONVENIENCE WORLD MAR/APR, 2021