Petrol stations pump the unleaded price up to over $1.70 a litre just in-time for Christmas and school holidays?
How is this allowed?
Shouldn’t the ACCC be doing something?
Someone in the community want to explain how this is allow?
Petrol Prices a Disgrace?
Trying2SaveABuck on 15/12/2019 - 19:25
Last edited 16/12/2019 - 11:20 by 1 other user
Last edited 16/12/2019 - 11:20 by 1 other user
Comments
We can produce our own biodiesel and bioethanol. We just don't want to.
But you can choose whether to drive or use alternative means of transport or even to not go anywhere if the prices do not meet your expectation.
No one owes you fuel for the price you expect. Same way as no one owes you any other good.
No one owes me fuel but the availability of fuel can be withheld from me.
You can chose not to use mains water but you do because there are regulations in place that prohibit pumping water from a river even if it flows through your property.
Don't forget to factor in people that live outside the metropolitan area. They're people too. Kinda.
In Australia, we call it 'petrol' :)
Gasoline is more environmentally friendly ;)
petty
You can produce your own solar to charge an electric vehicle.
I'm flattered you think I'm the sun.
Raise some dinosaurs and get them to die in a way so they leave high amounts of energy behind. Then wait a few 100 million years. Then harvest the fossilised fuel. Problem solved…. next
But I need it NOW!
Talk about delayed gratification! 100m years. The ultimate tease.
Or 10,000 years.
Um, yes you can
Petrol has inelastic demand. Currently there aren't viable alternatives.
Autogas was 59.9c/L when I filled up the other day. And has been for most of the year. Much of the time I can also get 4c+4c a litre off.
its a pity Holden and Ford stopped making dedicated LPG vehicles because no one bought them and instead bought guzzling SUVs. i'll continue to drive mine until the pumps completely disappear or i upgrade to an electric.
Just get a Plug in hybrid and install a gas turbine. Theyre the most efficient anyways.
$1.70 a litre
We just came back from the hunter valley. Almost all the service stations there are selling ULP for ~$1.40.
Goes to show there is some dead set collusion happening
Always has been, always will be. The whole pricing system for petrol is so corrupt.
Same with car insurance, health insurance, etc.Dare we say 'conspiracy'? :)
No it doesn't, it just shows that prices are different.
You need
much bettersome actual evidence to prove collusion.No. Price volatility is actually positively associated with competition. Look at your average Woolies. The most price-volatile items in the supermarket are usually the fruit and veg, even relatively shelf-stable products like onions are more volatile than a bottle of milk.
The reason for this is because Woolies and Coles face very little competition from independents, except in the area of fruit and veg, where there is quite a bit. Shops will often take a hit on goods advertised cheaply in the hope customers will buy other things and they can make up the margin elsewhere. Its the same with fuel. Servos will lose money on fuel during the low point of the cycle in the hope that at least a few customers will buy chips and twisties, which is where the money is. The fuel is just a door-slammer for them, nothing more. This is particularly the case for 7-11, which relies on its general retail much more than its fuel.
The fuel cycle, as the ACCC found, is basically a marketing gimmick. Its like Dominos' cheap Tuesdays. Dominos will still get the price sensitive customers on Tuesdays, the people who dont care about paying a dollar or two more will still buy pizzas on the other days. Perth still has a traditional fuel cycle where the fuel is cheap on Monday, edges up to Friday and becomes expensive over the weekend and then reverts again. The problem with that is that its too easy to predict. By having a more nebulous fuel cycle, your average normie will just give up trying to pick the bottom and buy whatever fuel they first come across.
The cycle is interesting to watch. There is an independent servo and a BP near where I live. The indy servo is usually cheaper, but the BP will frequently undercut the indy as a disruption tactic, basically to dispel the notion of the independent always being cheapest. The indy will then follow suit. The BP has the advantage of scale, brand presence and capital. Theoretically, it can survive a price war longer than the indy, but because it sells more fuel, it loses a lot of money selling petrol at below cost. Usually before the weekend, the BP will then suddenly hike prices back to their high point, the indy follows and the game begins again.
I suppose its possible for a shop to become the Aldi of fuel and just refuse to participate in the price cycle shenanigans altogether, but its a tricky beast. The truly price-sensitive customers are still going to search out cheaper fuel, and the oblivious customers dont care one way or the other.
Who cares, use the 7 Eleven fuel lock. Currently it's $1.31 for U91, $1.43 for U95, and $1.49 for U98.
What if you don't have 7 Eleven?
Clearly they should move to a town that does
Or state.
Price match at officeworks
Be thankful cars don't run on printer ink.
Ha, duelling 7-11's
Aren't they everywhere in metro areas?
No they're not nationwide.
Oh yeah I forget it's not country wide.
In Melbourne there are so many, it's hard to escape them.
7 Eleven doesn't have petrol stations everywhere do they.
Also, that requires you to tie up your money in their app in order to lock it in.
Your money's gone only if they go bankrupt, minimal risk if you just top up what you need.
I'm not suggesting the money's going to dissapear, but i'm sure there are plenty of people on lower incomes who can't have a chunk of their money tied up and unuseable in an app.
@lordezekiel: You don't need to keep funds in the account. The app allows you to quickly top it up, lock a price in and then use the funds in the account to pay for the fuel.
@zuuutoootuuu: What's the point of that? Surely the whole point of locking the price is to use it LATER.
@Mitch889: For those that want to lock in the lowest price in Australia without paying the pump price at their local pump.
@brendanm: What's the best way to spoof GPS on Android? When I enable the mock location setting in developer setting the 7-11 app detects it and makes me turn it off to use it.
@brendanm: I don’t know what to do with the links and I can’t find any comments help. Can you help me? I have an Android
@brendanm: Does that require mock locations to be enabled? As the 7-11 app doesn't let me lock if I have that setting enabled.
The opportunity cost of the $100 (or less for most people) that you would tie up in their app is pretty small. I have $60 loaded into the app and have never gone over that amount filling up. If that money was on my mortgage instead then it would only save me about $2 per year. I save more than that ever time I fill up.
7 eleven fuel lock only works once and only valid 7 days.
Better than nothing but doesn't cover you until the next cycle.Ssshhh! 🤫
😉
Petrol prices (in the gold coast at least) have been going on a pretty regular price hike cycle like this for at least the last 3-4 months.
Price gets to ~$1.30-$1.35, sits there for maybe 3-5 days then jumps overnight to ~$1.70-1.75, then it slowly but surely makes its way back down to ~$1.30 over a period of 2-3 weeks a cent or two a day, then the cycle repeats.
It's been almost like clockwork the last few months since i started paying attention.I use the RACQ Fair Fuel app on my phone to check the cheapest petrol nearby - often when the price does it's huge 40cent overnight jump, there will still be a few stores that maintain the old price for the next 2-3 days (sometimes you will amusingly see petrol stations directly accross the road from each other with a 40-50 cent difference in price and there will STILL be silly people filling up at the expensive one.
The app also has "Fuel Advice" setion that wil indicate where in the price cycle it currently is and whether its a good time to fill up or just chuck $20 in till it gets cheaper.Thankfully i dont need to drive too much so i can normally fill up at the cheap part of the cycle.
Same pattern in Sydney's Eastern Suburbs.
Buy a diesel, no complaints
Hear, hear. Since I bought my diesel work car a few months ago, the price has been basically stable at a few cents either side of $1.50, while the U98 for my personal/fun car has varied by at least 40 cents. $1.95 the other day, that hurt.
True that diesel price is more stable. But there are plenty of complaints to be had about diesel. Noise, initial cost, servicing costs, needing to take a regular long drive to regenerate the DPF to name a few.
Isn’t this covered in “Supply vs Demand 101”??
ACCC is a toothless tiger. Unless there is a law that is broken, collusion or price fixing going on, I doubt they care or could do anything about it. All the petrol stations need to say is “we have to cover wages for Xmas penalty rates”.
ACCC is a toothless tiger. Unless there is a law that is broken, collusion or price fixing going on, I doubt they care or could do anything about it.
Huh? Of course you can only go after someone if a law is broken. That's the whole point of living in a democracy.
Not really.
Free market doesn't apply to fuel as you require exactly one buttload of red tape to turn ye ol corner lot into a gas stop (really struggling to find the Aussie word for it).
Even if you could set up your own fuel retail outlet, you can't just go to a fuel expo and buy some fuel to resell.
(really struggling to find the Aussie word for it)
'Petrol station'
It's a farkin "servo" ya kant
@[Deactivated]: Yeah that would have been better. Bloody filter making me try and concoct alternate spellings.
Airlines increase prices.
Hotels increase prices.
Why cant fuel retailers!…It should be free because my car is a necessity and I'm to lazy to walk or ride a bike, public transport is disgusting and quite frankly I'm over been fuel shamed. #freefuelforthelazy
/s
Corporations run the world. We are just pawns (& I'm a pawn star)
God damn it chumlee, you made me spill my coffee.
Get a abn and start a business, gst back and tax deductible.
There's so much misinformation here. Anyway, I used to work at the ACCC and I actually investigated petrol prices.
Petrol stations pump the unleaded price up to over $1.70 a litre just in-time for Christmas and school holidays?
There is absolutely no evidence that this is systematic or that petrol prices tend to be higher right before holiday season.
On top of that, there is no reason why petrol retailers would have any incentive to do this. Petrol sales are no more higher "right before Christmas" than at any other time during the year. They would make just as much money increasing prices at any other point in time vs. right before Christmas.
How is this allowed?
What do you suppose we do?
Shouldn’t the ACCC be doing something?
There was evidence of tacit collusion in petrol markets, that was eventually resolved. I'm no longer at the ACCC and I have no idea if they are still currently looking into any evidence of collusion in petrol markets.
Even so, the largest driver of changes in petrol prices are changes in the wholesale price. The largest determinant of wholesale petrol prices are crude oil prices. Petrol prices are going to fluctuate wildly because it is very difficult to keep any stock of petrol and there are very long supply chains to get petrol to the pump. Even where there was strong evidence of collusion in petrol markets, any effect of that collusion on price was small relative to the factors I've outlined.
Someone in the community want to explain how this is allow?
Because we do not have rules against it. Laws tell us what we can't do, not what we can do. There are no laws against high petrol prices, there are no price controls for petrol…etc. Of course, collusion is not allowed, but that's been thoroughly investigated, and it's still only a very small factor determining petrol prices.
The internationally accepted index for ULP prices is the Singapore Mogas 95 index. If you look at the index and compare it to the retail price of petrol in Australia, you'll find that the price premium (which fuel retailers need to collect to supply you the fuel) is around 20c per L. There is actually very little leeway the retailers have to be able to deviate away from this amount. There is some cyclical behaviour, but it never deviates away from this average.
To address your broader point of why fuel is expensive, the first reason is the fuel excise tax. I won't repeat the figure here, but go look up what it is because it'll shock you. Also, comments about the Gulf region or Middle East are completely irrelevant. Almost none of the fuel (i.e. refined petroleum) used in Australia even comes from the Gulf region - the biggest sources are Singapore and South Korea - the rest is mostly Japan, Malaysia and China (if I remember correctly).
There's plenty of information about fuel markets, it's actually one of the most efficient markets you'll operate in.
OP At 29 (says started driving at 18 years 11 years ago)
A millennial who should realise that higher fuel prices reduces demand and hence greenhouse gases and hence global warming.
Action taken to save planet, unless of course its what I have to pay…. 😀🙏
from https://www.petro-online.com/news/analytical-instrumentation…
Australia sources most of its refined petroleum products from Singapore, which imports around 80% of supplies from the Middle East
so we are importing imported middle east oil so we are dumb %^&*s for not importing from the Middle East and cutting out the middleman?
Not to mention the government duel tax which I read a while ago was 45 c a litre then GST added on total
Biggest scam there is and no government controlled body (ACCC) is ever going to find anything wrong. As said the servos buy at the fixed price say 115 and sell at 135. However with full tanks when the controllers ring them and set the pump price they should NOT be allowed to alter pump price until they buy at new price.
I think you misunderstand.
Singapore imports OIL supplies from the middle east.
We import petroleum products from Singapore (refined from the imported oil)
can't see why we can't import crude and refine it ourselves dont we still have caltex refinery at Kurnell and shell at clyde ?
@ShannonN: The Caltex Kurnell refinery hasn't existed since 2014. There is no real economic way to refine petroleum products in Australia right now. We don't have the infrastructure or the technology to do it. If there was a profit that could be made by importing crude oil and refining it here, someone would have done it.
@ShannonN: Both closed a few years back. Clyde is now an import terminal.
Out typed by p1 ama above 😀
@RockyRaccoon: Probably so we would be forced to depend on overseas? what scares me is the country can grind to a standstill if Singapore gets taken out, as we don't carry huge reserves.
Guess its time to invent a car battery the size of a matchbox for future electric cars that only needs charging once ever year
Probably so we would be forced to depend on overseas? what scares me is the country can grind to a standstill if Singapore gets taken out, as we don't carry huge reserves.
Refined petroleum is one of the most traded things in the entire world. Are you afraid that you won't be able to get food because your local Coles burned down? That's literally what it's like.
@p1 ama: Fork me you argue against all I say. While it may be the most traded thing but if Singapore went down don't you think the others can conspire to NOT supply and say stuff u.
Like I believe all the suppliers of refined oil are in league with each other to maximize profits and manipulate oil prices maybe you don't think so, maybe you're on 200k per year and don't give a hoot what price it is or what damage can be some
Fork me you argue against all I say.
Because most of what you say is either misinformed or not backed up by any evidence.
Like I believe all the suppliers of refined oil are in league with each other to maximize profits and manipulate oil prices maybe you don't think so, maybe you're on 200k per year and don't give a hoot what price it is or what damage can be some
This is just a conspiracy theory. I don't think you understand the size you would have to be in order to be able to manipulate oil prices. It's a hugely competitive market, not like what you think it is.
The truth is not a moral issue - I'm not saying that higher fuel prices are good or bad, I'm just trying to explain to you why the variation exists and where it is coming from. It's not coming from some galactic overlord trying to screw you over.
@p1 ama: While the industry looks competitive it is also insanely profitable. Competition and Profit don't really go hand in hand unless there is some collusion going on.
For all major players out benifits then to keep prices high even if that means they lose some sales to the smaller alternatives
The picture you're presenting isn't correct - Singapore imports crude oil from the Middle East, and sells the refined petroleum. In regards to why we don't do that ourselves, it's literally because Singapore is one of the biggest petroleum refiners in the world and can do it far more cheaply than we can. Either way, that's all irrelevant here because the refining process takes time and hence, changes in crude oil prices will take a long time to reflect in changes in refined petroleum.
Not to mention the government duel tax which I read a while ago was 45 c a litre then GST added on total
Yes that's correct, go petition your local MP if you want that lowered.
Biggest scam there is and no government controlled body (ACCC) is ever going to find anything wrong. As said the servos buy at the fixed price say 115 and sell at 135. However with full tanks when the controllers ring them and set the pump price they should NOT be allowed to alter pump price until they buy at new price.
Again, just because you don't like something doesn't make it a scam. Just like the police cannot lock up someone just because you don't like them, the ACCC can't take action against petrol retailers just because you don't like them. I don't like paying high prices for fuel anymore than you do, but just because prices are high doesn't mean that there is some illegal activity.
Like I stated in my original post, most of the variations in petrol prices (and the reason why petrol prices are high right now) is because of external factors that aren't even remotely close to the end distributors of petrol from whom you're buying.
Singapore has world class refineries. We have none. Otherwise why wouldn't we just buy it right from the middl east? Lol
However with full tanks when the controllers ring them and set the pump price they should NOT be allowed to alter pump price until they buy at new price.
This is a dangerous move. Consider the case of a short-term price spike, let's say to $3/L (some fuel tankers get sunk by a rogue submarine and a storm takes out a major flammable products berth). So the store that had the misfortune of filling their tanks during this spike is to be held to $3/L until their stock is depleted…
The other shop down the road had some stock at $1.50, and managed to hold off re-supplying until the price fell back to $1.80/L.
So now there's one shop that's stuck at $3/L 'until they sell it all'… Well, no-one's buying for $3 when it's $1.80 next door, so they'll close down in a couple of weeks from lack of cashflow.
Maybe next time they won't re-fill when the spot price has a spike. Is not being able to buy any fuel because vendors don't want to be locked into $3/L a good outcome for anyone? Sucks if your ambulance can't find any fuel.
Also, comments about the Gulf region or Middle East are completely irrelevant. Almost none of the fuel (i.e. refined petroleum) used in Australia even comes from the Gulf region - the biggest sources are Singapore and South Korea - the rest is mostly Japan, Malaysia and China (if I remember correctly).
You say you worked for the ACCC, but you don't understand that the crude oil price is affected by global events - even if they're in another market?
Crude oil prices are only very weakly correlated with refined petroleum prices. The process to refine petroleum is very expensive and energy consuming, so there are many other factors which affect refined petroleum prices as opposed to simply just crude oil prices.
The comment I made was in response to some misinformed statement made by someone else about how drone strikes in the Syria were somehow affecting (in a big way) our petrol prices. This is just simply untrue and a mass hysteria.
Presumably the price of refining isn't fluctuating 30% week to week, so what's causing the 'petrol cycle'?
Very informative.
Thanks for sharing.
Can you please provide a link for referencing the current price for the Singapore Mogas 95 index?
My searches all show the futures pricing.
Would be good if we could compare it with, for example, BP / etc's Terminal Gate Pricing.
This is a banger comment, and thank you for it.
I work/am 2IC at an independent fuel station (we have Liberty branding but the only thing they do for us is signage and supply, they don't have any say in how we run the place) where the only thing that factors into our retail price is our wholesale price, and I am sick to death of every second customer coming in complaining about petrol prices when we are almost always the cheapest servo in town, plus like I'm the reason for it.
Your researched average of 20 cents/L margin seems fair enough, but it's higher than our highest margin. We're lucky to make 15 cents a litre (rarely), sometimes as little as 4 cents/L when we have to change our price to compete with the other 4 fuel stations in town, but usually around 10c/L.
When you factor in all the costs of doing business; 10c/L profit isn't really sustainable. If we didn't double as a fairly substantial fishing tackle and bait store (as well as the standard servo conveniences), we'd be out of business.
I'm not attacking anyone as I understand why people complain to me, but instead of complaining to the retail assistant when you're paying; maybe go home and write a letter to the fuel wholesalers/refineries instead.
We don't price gouge, and we are just as susceptible to "price hikes" as the end consumer. When our wholesale price goes up or down, so does our retail price.
If you had a business and wanted to increase profit by raising prices without the fear of losing your customer base…. wouldn't you?
It sux for the customers, but they are in business to make money. They can do what they want.
I guess we're lucky not everyone's an A**hole?
I don't think it works that way. It's just business. Some Assholes won't increase prices, because of
fear of losing your customer base
If we can import products ourselves or buy from cheaper competitors, they'll have to keep prices lower.
Not the case for petrol. They'll sell it at the highest price they can get away with. And that doesn't make the people working within / running the businesses assholes either, their job is to maximize profits.
Did you know that not everyone on the planet prioritises profit over all other things?
Of course this is unforunately rarely if ever true of big business/corporations.
@[Deactivated]: There's where the electric scooters those guys were talking about comes in handy.