15/12/2015 - 12:33

Petrol margins at record highs

15/12/2015 - 12:33

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The consumer watchdog has found retail margins in the petrol industry are at their highest level since monitoring began 13 years ago.

The ACCC will be closely monitoring gross retail margins in the petrol industry in the coming months.

The consumer watchdog has found retail margins in the petrol industry are at their highest level since monitoring began 13 years ago.

The Australian Competition and Consumer Commission’s September quarter report into the industry found the average gross retail margins in the five largest cities were 11.8 cents per litre, an increase of 1.3 cents from the June quarter.

Sydney and Brisbane had the highest retail margins at around 14 cents/litre, with Perth reaching just above 12 cents/litre.

“We will be closely monitoring gross retail margins in the coming months, because high retail margins likely indicate increased profits of the petrol companies at the expense of motorists,” ACCC chairman Rod Sims said.

The report also revealed an average retail petrol price of 133.2 cents/litre in the September quarter in the five cities, down 2.6 cents/litre from the previous quarter.

International prices fell during the quarter due to a rise in crude oil supplies in global markets.

The AUD-USD exchange rate also fell by 9 per cent during the quarter.

“Retail petrol prices didn’t fall by as much as international prices, in part due to a weaker Australian dollar,” Mr Sims said.

“The exchange rate can have a huge impact on prices at the pump.”

The ACCC also found an increase in the differential between retail prices in regional locations and in the five largest cities from 0.7 cents/litre in June to 5.3 cents/litre in September, well below the peak differential of 17.6 cents/litre in January.

“The very high differential we saw in late 2014 and early 2015 was a result of regional prices being slow to fall following large decreases in international prices,” Mr Sims said.

“In contrast, the very low differential in June was due to prices in regional locations being slow to rise following a large rebound in international prices.

“We are now seeing the differential return to a point more in line with historical levels.”

Mr Sims also noted some of the work being done by the ACCC into petrol markets in regional locations.

“The ACCC has recently released its report into the Darwin petrol market,” he said.

“The report found that high prices in Darwin in recent years added around $9 million per year to the petrol bill for Darwin motorists.

“It also found that net profit per site in Darwin was extremely high, at around $1.2 million per site in 2013–14. This was significantly higher than in Adelaide, where net profit per site for most of the same companies ranged from $100,000 to $200,000.”

Mr Sims said the higher prices and profits in Darwin were evidence of weak retail competition.

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