Fuel discounts a big con

Helen Pow
The Sunday Telegraph
February 12, 2012

DRIVERS are paying more for petrol because supermarkets are jacking up pump prices to protect their profits from fuel discount vouchers.

Motorists are being duped into thinking they are saving up to 8c a litre but research shows drivers who use the supermarket dockets are getting a fraction of the promised discount.

And those without vouchers are paying up to 4c a litre more than they should.

“Families are being misled,” said Australian Automobile Association managing director Andrew McKellar.

“Even if you are using one of these shop-a-dockets you are not getting the full face value discount because the supermarkets are pushing up prices and for everyone else you’re paying more, full stop.”

Coles and Woolworths doubled their usual 4c per litre petrol voucher between November and January to boost fuel and grocery sales amid their price war.

Those who spent more than $30 in store have until the end of this month to redeem the 8c voucher at the bowser.

But a study of fuel prices by the AAA over the past three months found drivers were being swindled when the double discount applies because the supermarkets inflate the starting price of petrol to lessen the hit to their profits.

Even motorists who avoid supermarket-linked chains – which now account for almost half the service stations in Australia – are paying up to 2c a litre more when the promotion is running because other petrol retailers follow the supermarkets’ lead in raising prices.

“Motorists are paying a higher fuel price every day in their fuel cycle when compared to fuel cycles before the 8c per litre discount,” the AAA report said.

“A plausible explanation is the supermarkets changed their pricing policy relative to their competitors during their 8c per litre fuel discount offer to minimise the cost of the promotion.”

Petrol retailers’ profits went up by a fat 20 per cent during the offer, with gross retail margins rising from 7.6c a litre to 9.1c.

Mr McKellar accused the Australian Competition and Consumer Commission’s petrol commissioner, Joe Dimasi, of failing to stop the rip-off.

“When the regulator is not concerned you’ve got to wonder if interests of motorists are going to be defended,” he said.

Mr Dimasi said the ACCC had not investigated whether the 8c a litre discount pushed up prices at the bowser.

An ACCC spokesman said the commission “is currently seeking further information from industry bodies on the influence of discount vouchers within the market.”

Coles Express general manager Peter Short denied the supermarket lifted fuel prices to offset the 8c fuel offer. “Fuel pricing is volatile and is determined by a number of factors,” he said.

Woolworths’ spokeswoman said: “Woolworths is a price follower and our outlets change prices after moves by competitors.”