Coles shamed for high petrol prices
May 8, 2008 by George Skentzos
The NRMA has given Coles Express service stations an ultimatum – guarantee it will have the lowest petrol prices or face a boycott.
Coles is under fire following a report which revealed the supermarket giant was slugging motorists with the most expensive petrol prices in every major city and leading the whole market higher.
“On any given day the range from the lowest available retail price to the highest is usually between 15 to 20 cents per litre,” said Australian Competition and Consumer Commission petrol commissioner Pat Walker.
In Melbourne yesterday, some Coles Express service stations were pricing their petrol up to 14 cents a litre above the average.
This becomes particularly expensive for motorists who are mislead by shopper dockets, and end up paying far more for their petrol despite the discount.
For residents in WA at least, the FuelWatch scheme has been introduced with great success, forcing petrol stations to lock in their prices and make them available online.
This scheme won’t be seen in the remaining capital cities until at least December, until then NRMA Motoring and Services president Alan Evans is not shy about naming and shaming retailers who gouge consumers at the pump.
“The real key now is what Coles does to make sure they redeem themselves (and) of what the petrol commissioner does to ensure motorists aren’t ripped off in the future,” he said.
Mr Evans suggested the Government look more seriously at giving the petrol commission some real power to ensure motorists aren’t ripped off like this in the future.
Print it: 
What right does NRMA have to tell Coles/Shell what they should charge for fuel? I’m all for cheapest fuel prices available, but are we in a free market or not?
The problem is now coles/shell and woolies/caltex have such a monopoly of the market that they can charge just about what ever they want and give the illusion that they are infact discounting the actual real cost of fuel. It hard to catch them out because there are so few independant chains to compare them with.
I might go out and buy me a horse and cart!
They don’t care!!!! Does anyone really believe Coles and Shell are concerned???
it’s impossible to SHAME the SHAMELESS!!!!
Hey folks Commission pelt wrong….sorry.
There is a choice. Go elsewhere.
What you folks should do is a weekes boycott from buying fuel at Coles. You’ll be surprised at the difference it would make.
Maybe its time for to Aldi get into petrol stations and discount dockets!
Ha Ha commission pelt wrong – spelt. What a dork
Eyma,
well if the fuel is as good as their food, then no thanks.
Aldi is worse than woolies for ripping us off on prices.
(sorry shouldnt say “us” because i dont shop there)
What a joke. Coles are only charging this 15 to 20c a litre more for a few hours on wednesday. They raise their prices in the weekly cycle just before everyone does. Oh noes! theyre ripping us off! good thing we have the ACCC to save us.
We have a weekly price cycle, all the petrol companies follow it, coles just happen to do theres a little before everyone else, yet suddenly. If youre filling up on wednesday morning just go to the next servo if coles has already raises their prices, big deal. Every other time during the week their prices are the same all the other petrol stations.
Kharn, are you working for Coles or what?
Andrew M, mate, i am not seriously saying that Aldi should get into fuel, Bit of tongue in cheek really. Just be nice to see someone keep the big two honest. Hay, i dont have a problem with Aldis food though.
Kharn, we all notice this weekly price cycle you talk of but unlike you dont try to justify it! The fuel companys dont pay more for their fuel just because its Wednesday do they? Why should we?
Maximark is right, Do you pack sheves at coles or are you their new junior trainee manager?
How do you pack sheves? Sorry meant shelves.
Too many Irish stouts. what can you say…Cheers
i dont support coles and Im surprised my reply is seen as any form of support, its more having a go at the ACCC than supporting coles. I just dont see how the ACCC saying this is big news or going to make a difference to anyone.
It could be Caltex/woolies doing it, it ends up little difference to people buying petrol. Is everyone going to be driving to work on wednesday morning looking at coles/shell thinking: “ah their prices go up first!” no sh#t sherlock, the sign will have the higher price and theyll just drive to next servo.
What does the ACCC expect? Coles to raise prices at the same time as everyone else? It wont make any difference to prices for most people.
The weekly price cycle works for me, i get petrol at a cheap point in the week (with a shop docket for coles/woolies) and I dont spend 10 minutes queuing up for fuel like I see many at the more popular servos.
What do people suggest? get rid of the weekly cycle? then the prices would be averaged for the whole week, if you think petrol stations are going to sell petrol all week round for the tuesday night price youre delusional.
Kharn, Why not sell fuel for the same price each day of the week? Unless you know something the rest of us dont, the fuel companyies dont pay more per barrel on a Wednesday than they do on a monday do they?
MacDonalds sell me a big Mac the same price each day. The milk is the same price each day, why should petrol be any different?
I still dont fully understand the price cycle myself,
The petrol companies actually call the prices early in the week discounting, and claim that its unsustainable to run these prices all week long.
From what Ive read wholesalers provide rebates to the retailers/franchises until they find they find it no longer possible to profitably continue, at which point rebates cease (wednesday).
Most of the money they make on tuesdays would actually be from in store sales from people who are happy to pay the exuberant prices on convenience items instead of getting them from a supermarket.
All that being said, of course petrol companies could run at slightly lower profits, which probably only equal a few cents a litre at the bowser though.
From what I read posted elsewhere on the weekly cycle
“The price you pay at the petrol pump is based on 2 things: 1. the wholesale price, and 2. the rebate that the reatiler negotiated with the oil company. The retailer generally makes approx. 4 cents per litre and aims to maximise volume sold every day of the week. Keep in mind that 60 % of their gross margin is from shop sales (cigarettes, soft drink, choclates, bread & milk) so petrol sales are there to get customers into the store. The cycle starts on Wednesday (highest price) and as it heads towards Friday (highest volume day) the retailer drops the price to compete with other outlets and gain max volume. When it gets to the stage that they are not making any margin on fuel they request further rebates from the oil company to support their sales volume. The oil companies need volume to keep the refineries going efficiently. The oil compaines also have knowledge of selling prices from all outlets via EFTOS data purchased from Informed Sources (costs approx $1M pa – they all do it). They trade off margin for volume as we go through the high volume days Friday – Monday and when it gets to the point of no financial bebefit to provide rebates, they cut the rebates and it goes back to the normal price on, or around Tuesday. The retailer makes around 4 cpl through the week, Govt makes 38.4 cpl + GST.”
Liam, of course we are in a free market…but do you understand the concept of economic elasticity of demand?
Refined Fuel is probably the most inelastic product on the face of the earth (next to tobacco)….meaning that when the price increases, demand doesn’t drop off at all (as an example, at the opposite end of the scale, an elastic product will have demand drop off greatly if the price increases slightly).
Any companies dealing in such a product shouldn’t really be allowed to exploit consumers, because they are at a massive advantage over any other industry dealing in any other product.
The ACCC places far greater regulation on products which consumers are less dependent on. Why should fuel be overlooked?
best thing to do is
dont buy your fuel from
either safeway or coles
Joe, I’m not an economist by any means, nor a defender of Coles’ actions. Just that, there is still competition in the market place, although perhaps not as much as we all would like. Simple stationery items are a necessary requirement for all of us and many have a 100% markup, why isn’t the ACCC getting in a huff about that? Like I said, I’m no economist so forgive me if that analogy is completely daft, which it probably is, haha. Unless Coles can be proven to be price-fixing with its competitors then should it not be free to set prices at what ever level it deems appropriate and let the market decide if their pricing is reasonable?
The coles servos on my way home are always 5-10c per litre more expensive than the united. Also, note the 6c per litre saving you get if you have a 4c coupon from the supermarket, and spend more than $2 in the coles servo store. By doing this you are effectively eliminating your original 4c discount.
Just as well the NRMA and the RACV aren’t into petrol retailing (why not, you might ask – they could effectively bulk buy for their club members)
All they’ve ever done up till now is talk the price up.
But petrol/diesel is not the only thing we consumers are being ripped on – how about the other inelastic products like Gas, Electricity, Water, Local Govt taxes, State gov’t taxes like registration.
No wonder inflation is soaring!
Hey CA, I see you’re sourcing overseas servo pics again! :)
I’m with Carl on this one.
“it’s impossible to SHAME the SHAMELESS!!!!”
Don’t you get it? Stupid Govt. of the day let Coles/Woolworths get involved in the petrol ganme. Now they control food and petrol. What is left? I know the banking industry and then they have control over 90% of our income.The petrol industry is now in the hands of the only two food giants in Australia. They should have never been allowed into this area. The independants have all but vanished and with it competition.Buy a diesel car and make your own bio diesel. It is not hard.
Have been giving Coles and their fuel a wide berth for a while as it is the same price as others or more with the discount.
I agree would be good if ALDI got into Fuel to mix it up a bit as they have done with groceries. Save a small fortune at Aldis and more of their range is Australian sourced than the other two.
Wish Aldi sold Grog in NSW to shake Woolworths monopoly in that sector.
Some country towns I hear are starting to boycott Woolworths and good on them as Woolworths /Coles aren’t happy until they put the little guys out of business.
They also set the inflated prices and huge mark ups on produce while giving a pittance to the farmers.
realcars,
then why dont you support your local IGA?
at least the profits dont go back to germany.
IGA also offers a fuel discount scheme, but unlike the others you can save the dosh by shopping at ANY servo not their specified one
Aldi’s food is all home brand stuff. go and price home brand for home brand prices between woolies and Aldi and you might be surprised.
Aldi dont sell Coke, they sell some swaheile brand.
you cant say woolies is a rip job because aldi sells united cola (or whatever) for 50c a bottle cheaper.
the mrs did a shop there once (due to influence from inlaws) and came home with icecream that tasted like plastic (ill take blueribbon for $1 more and actually enjoy it thanks)
and sausages with out flavour.
Australians have themselves to blame.
We have allowed the retail market for food & fuel to be controlled between two duopolies by patronage.
The demise of our way of life will be complete once Walmart hits our shores.
Free trading,open markets?More like anything goes.
Utility retailing is another one to watch.
It all started with a claimed “saving” of 4 cents per Litre or the claim of everyday low prices(wages).
The savings at the pump don’t buy a small Maccas meal.
Davo,
i agree totally mate.
they reeled us in because we were to greedy to pay the extra 20c for the packet of cereal at the local independent grocer.
now as major retailers always do, they have gained market share and will control everything.
in QLD, supermarkets cant hold a liquor licence. so the smart likes of woolies and coles have bought the names of all the major liquor stores and continue to trade under the different banner. now after their plan has been in seed for 4 or so yrs (and for 2 of them the deals were great) they are charging like anything for their stock.
and why?
because they wiped out the competition by either purchasing them or stealing the sales during the 2 yrs where their prices were decent
While we’re bashing Coles, I’ve been told by 2 completely different and independent mechanics to steer clear of Coles fuel for my motor cycle.
The mechanics have noticed a marked increase in fuel problems in m’cycles with this supplier.
Has anyone else heard of similar stories?
i heard of a guy who use to carry fuel for woolworths in his tanker,
and he reported that the tanker is left stained inside.
the obvious answer is that they are dying the fuel to bring the colour up to the norm as they must put together a weaker brew for their servos
Nobody appears keen to advocate alcohol fuels? Sure Coles have misleading pricing, because there are so few refiners of fuel and Coles have a huge buying power to obtain the best price; and then charge what they want. Perhaps the problem lies first in the fuel refineries apparent ridgidity in fuel pricing and secondly: in Coles marketing shams. Then again, it’s supposedly a free market :) – yeh right! Why not simply switch to methanol? After all, it produces more power, has been used in racing for years, runs cooler, is sustainable, and most importantly it is easy to produce. The ready availability alone would surely prevent Coles and Co ripping off consumers. It would certainly reinvigorate competition too.