Regular prices at a premium

Perth has maintained its trend of weekly price fluctuations at the petrol bowser, according to Australian Competition & Consumer Commission data, despite most other capitals moving towards longer fuel price cycles.

Prices in the Perth metropolitan area vary significantly during the course of the week – from a high, usually on Thursday, to a low, usually on Wednesday.

In most other capitals, prices move in longer, less predictable cycles.

In recent months, however, cities on the eastern seaboard have entered a very long cycle as fuel prices have fallen.

Petrol prices have fallen nearly 20 per cent in Perth since November, driven largely by a continued fall in the global oil price as the US ramps up production and Saudi Arabia keeps the tap running.

Perth is the only capital city with a FuelWatch program, which the service’s manager, Lynne Gould, said helped ensure pricing transparency.

“(In Perth) we have a regular weekly cycle where motorists can know if they shop on Wednesday that the average price is going to be lower,” she said.

“That’s very predictable and stable.

“What motorists have in Perth is that transparency, and therefore they can make informed decisions.”

She said a predictable cycle was of benefit to consumers.

ACCC spokesperson Duncan Harrod said price cycles occurred as the result of pricing policies of fuel retailers.

“(Cycles) are of concern to many consumers due to the large price increases that occur in a single day, and across most retail sites, on a broadly regular basis,” he said.

“Many consumers try to take advantage of the bottom of the price cycle to buy petrol at relatively low prices.

“A feature of petrol price cycles in recent years has been the increase in, and variability of, the duration of price cycles in most cities.

“In contrast, price cycle durations in Perth have become increasingly stable over this time.”

Canberra, Hobart, Darwin and regional areas generally do not have fuel price cycles.

“In each of the eastern capital cities (including Adelaide) the average duration of price cycles in 2009 was seven days,” Mr Harrod said.

“By the first half of 2014 it had increased significantly – the average price cycle lasted over 18 days in Sydney, Melbourne and Brisbane, and over 15 days in Adelaide.

‘In contrast, in Perth the average price cycle duration decreased from around nine days in 2009 to seven days in 2011, and has remained at seven days since then.”

Oil prices have fallen around 60 per cent since mid-2014, affecting fuel prices and energy export revenue.

HSBC chief economist Paul Bloxham said Australia was a net importer of petroleum, but a net exporter of energy.

“While oil exporters’ profits fall, this should be more than offset by the boost from lower petrol prices to oil-using businesses and households,” he said.

“But the story is complicated by the fact that Australia is a large coal and gas exporter, and the prices of these commodities can be affected by oil prices.

“If the oil price decline also drives a fall in coal and gas prices, then the overall story could be negative.”

Mr Bloxham said despite this, the overall impact was likely to be positive.

“Lower petrol prices should be expected to push inflation lower, leaving households with more disposable income,” he said.