ACCC ISSUES 'PLEASE EXPLAIN' TO FUEL RETAILERS
Written on the 15 February 2016 by Nick Nichols
THE consumer watchdog has put the petroleum industry on notice after revealing low global crude oil prices were not being fully reflected at the bowsers.
The Australian Competition and Consumer Commission says it has written to major petrol retailers this month to explain what it says have been 'unreasonably high' retail petrol prices for motorists in the latter half of 2015.
"I expect to receive their responses shortly," says ACCC chairman Rod Sims.
According to the latest quarterly report by the ACCC into the Australian petroleum industry, while average prices in the December quarter were lower than previous quarters, motorists are still paying more than historical evidence suggests they should.
The average price of petrol in Australia's five largest cities was 124.4c per litre in the quarter, down 8.8c per litre from the September quarter and 11.4c lower than the June quarter.
The report notes that Brisbane petrol prices were among the highest of these top five markets.
"This decrease in prices over the quarter was welcome news for motorists," says Sims.
"However, retail petrol prices were not as low as might have been expected given the level of crude oil prices."
Brent crude oil prices in December 2015 slumped to their lowest level in more than a decade.
Sims says the higher prices are the result of both high refiner margins and strong global demand for refined petrol. The ACCC report has found that the average annual difference between crude oil prices and refined petrol prices in 2015 was $US16 a barrel, or double the 20-year average of $8 per barrel.
"While international refined petrol prices are strongly influenced by the price of crude oil, they are also determined by their own global supply and demand conditions," says Sims.
"As global demand for petrol was relatively strong in 2015, prices remained high relative to crude oil prices. These high refiner margins are outside Australian control."
However, the ACCC is pushing for greater transparency in retail margins after securing agreement from BP, Caltex, Woolworths and 7-Eleven to make real-time petrol price information available to motorists.
The agreement followed Federal Court proceedings issued by the ACCC against the petrol retailers.
"The settlement of these proceedings was a big win for motorists," says Sims, adding that it will help push prices lower.
"Making this pricing information constantly available to consumers will improve price transparency.
"It will allow them to make better informed purchasing decisions and therefore create greater competition in petrol pricing."
Author: Nick Nichols