ACCC releases Armidale petrol report

The Armidale petrol market has demonstrated the impact of increased competition and greater price transparency according to figures released in the Australian Competition and Consumer Commission’s (ACCC) latest regional petrol report.

Petrol prices in Armidale were significantly higher than those in the five largest cities in Australia from 2012–13. The main reasons for this were: higher transport costs; higher retail operating costs per litre; and higher retail margins and profits. Relatively weak retail competition in Armidale, reflected by a lack of price discounting, contributed to the increase in retail margins and profits in recent years.

The Armidale market is small and relatively concentrated, and until recently did not have an active price discounter.

However, in June 2016 an independently-operated Liberty-branded retail site commenced operations in Armidale, offering consistently lower prices than its competitors. Around the same time the NSW Government launched FuelCheck, an online tool providing consumers with real-time fuel price information covering every retail site across NSW.

The differential between Armidale prices and those in the five largest cities, and in Glen Innes (the closest regional location to Armidale that is part of the ACCC’s fuel price monitoring program) have narrowed in recent months, the report shows.

In 2015-16 annual average E10 prices in Armidale were 9.5 cpl higher than those in Glen Innes. In the September quarter 2016 the difference decreased to 3.4 cpl.

The report concluded that the presence of an active discounter, as well as greater price transparency, has led to average petrol prices in Armidale decreasing relative to those in the five largest cities and Glen Innes in the September quarter 2016.

“Easy access to current retail petrol prices enables motorists to shop around and find the lower priced retail sites. This promotes competitive market behaviour and rewards discounters,” ACCC Chairman Rod Sims said.

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