Petrol chains gouging country motorists face backlash

PATRICK DURKIN
AFR

KEY POINTS
Consumers in regional locations not receiving same benefit of lower prices as those in capital cities.
National average price of unleaded petrol at lowest level since September 2010.
Regional motorists are being ripped off by petrol chains refusing to pass on a plunge in petrol prices, which have dipped to their lowest levels in more than four years.
Drivers outside the five largest cities are paying around 18¢ per litre more than their city counterparts to fill their tanks and the competition watchdog has vowed to use new powers to prosecute offenders who are gouging consumers. Kalgoorlie, Coffs Harbour, Toowoomba, Port Augusta, Devonport, Benalla, Alice Springs and even Canberra are among the regions where the Australian Competition and Consumer Commission has identified anomalies in local petrol prices.
“Motorists in our larger capital cities have seen the benefit of lower international prices but consumers in a number of regional locations have not,” ACCC chairman Rod Sims said. “While lags are expected, as older stocks can take longer to run down in regional locations, we would expect the falls to be passed on reasonably quickly.”
CommSec chief economist Craig James said there was clear evidence of misconduct and communities wanted action. “Apart from producing yet more studies, motorists in regional areas want to know what concrete measures can be done to reduce fuel prices.”
A freefall in global oil prices has caused the national average price of unleaded petrol to drop to 119.7¢ a litre, its lowest level since September 2010, according to the Australian Institute of Petroleum.
GAP IS WIDENING
Over the past six months, city drivers have reaped the benefit with the ­average retail price falling by around 38¢ per litre in our five largest cities, Sydney, Melbourne, Brisbane, Adelaide and Perth.
But while regional communities were paying just 5.7¢ per litre more than the major metro centres in the middle of last year, by the start of this year the gap had more than tripled to 17.6¢ per litre, as regional operators failed to pass on the dramatic price falls.
Canberra motorists are paying an additional 19.3¢ per litre, Hobart residents 18¢ per litre more, while Alice Springs locals face a whopping 44.2¢ per litre extra at the bowser.
Queensland Treasurer Tim Nicholls has raised concerns that Brisbane residents can pay up to 10¢ per litre more than motorists in Sydney and Melbourne.
Mr Sims has put the petrol chains on notice they will face a backlash by ­consumers, enforcement action by the regulator or law reform by the ­government if they continue to gouge consumers.
“Fuel producers can either respond or face a consumer backlash or even a government response if the market is not behaving as a competitive market should,” he said. “It may be, for example, that barriers to new entry are too high or that there is a lack of independent market participants.”
The ACCC has been directed by federal Small Business Minister Bruce Billson to provide quarterly rather than annual reports about petrol prices and the regulator is currently reviewing 180 regional locations with a view to making “deep dive” investigations into three so far undisclosed towns.
“In some regional centres that are about the same distance out of the capital cities and the same distance from terminals . . . [with] no great variation in the volume sold, but quite a difference in the price that motorists are charged,” Mr Bilson ­complained when he announced the ACCC investigation in December.
“We need to understand what’s at play there, examine whether there are any irregularities or any mischief at play.”
Mr Sims declined to name the regions or retailers they plan to target for fear of tipping off the culprits.
“Otherwise we run the risk that ­market behaviours change before our study begins,” Mr Sims’ said. “We acknowledge that complying with these notices can be a burden for businesses but this is the only way to uncover what is going on with petrol prices in specific regional locations.”
The ACCC reached a deal with Woolworths and Coles in 2013 to limit discounts on shopper dockets earned at supermarkets to 4 cents per litre, after the regulator claimed the scheme was pushing up prices for 80 per cent of consumers. The ACCC also has legal action on-foot against big petrol station chains BP, Caltex, Coles, Woolworths and 7-Eleven for using website Informed Sources to co-ordinate their fuel prices.

The Australian Financial Review
BY PATRICK DURKIN