ACCC releases first quarterly petrol report

The first quarterly report into the Australian petroleum industry released by the Australian Competition and Consumer Commission (ACCC) today shows that after reaching a low in January 2015, petrol prices have begun to rise, reflecting international trends. While falls in capital city prices correlate with international trends, the is not always the case in regional locations where the ACCC warns that it will soon commence market studies focused on price differentials and the time taken to pass on international price falls.

The report shows that petrol prices in our five largest cities decreased by 28.1 cents per litre (cpl) from June 2014 to December 2014 and fell a further 14.6 cpl in January 2015 (reaching the lowest monthly average price since January 2009). The price reduction in the five largest cities was consistent with the fall in international crude oil and refined petrol prices.

ACCC Chairman Rod Sims said, “The combined reduction in petrol prices of 42.7 cpl is unusual, and would be worth around $1000 per year to the average household if sustained. However, petrol prices are volatile. Over half of the petrol price that Australians pay at the pump is due to the international price of fuel.”

In mid-January this year, the ACCC highlighted that falling international oil prices had not flowed through fully to regional petrol prices. In June 2014, the monthly average retail price of petrol across regional locations in Australia was 5.4 cpl higher than in the five largest cities, however by December 2014 this differential had increased to 17.5 cents per litre and remained at this level at the end of January. Mr Sims reported that, “During January this differential increased in some of the 180 regional locations monitored by the ACCC, and decreased in others”. He said that as, “Retail petrol prices in the five largest cities started to increase in February 2015, so we would expect the differential to narrow in the remainder of the March quarter 2015. The ACCC will be monitoring this in the period ahead”.

The report also shows that diesel and LPG prices have also fallen considerably, but not by as much as international prices. Between June 2014 and January 2015 average monthly diesel prices in the five largest cities decreased by 25.0 cpl and automotive LPG prices decreased by 11.9 cpl. In the short term, unlike petrol prices, retail diesel and automotive LPG prices tend to be less responsive to changes in international refined product prices.

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