FuelWatch Scheme could be killed off
August 15, 2008 by George Skentzos
The Federal Government’s nationwide FuelWatch scheme is in doubt after losing the support of two key Senators.
If approved, FuelWatch requires petrol companies to lock in prices 24 hours in advance, however Family First senator Steve Fielding today joined independent Nick Xenophon in shunting the web-based scheme.
As it currently stands, Xenophon fears the new scheme could encourage collusion in the market between the big players and wipe out the independents.
“We’re still wanting to understand how it won’t push petrol prices … up and we also want to know how FuelWatch won’t squeeze out independents,” he said.
FuelWatch has been operating in Perth since 2001, with NRMA president Alan Evans suggesting ‘nimble’ independent operators have been able to gain an advantage.
Mr. Evans also continues to point the finger squarely at the supermarket giants.
Coles and Woolworths, who have been known to drive out independent competition and consistently set the highest price for fuel, are not subject to oil codes unlike oil companies.
Essentially there are fears that the introduction of this scheme could result in higher average petrol prices linked to reduced competition.
There have also been accusations that petrol companies could ‘gang up’ and collaborate to set fuel at a higher cost.
“There are severe criminal penalties for collusion, and on that basis we strongly suggest that any suggestion of collusion in the petrol market be supported by factual evidence, rather than throwing around baseless accusations.” BP spokesman Chandran Vigneswaran
Senator Fielding said he would not be supporting the legislation until his “serious concerns” were addressed by the government.
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*****PRIMO!****
With the MILLIONS this scam has cost [and will continue to cost] *they* could have reduced the excise by a few cents.
EVERY bit helps.
SACK Rudd the DUD [Whitlam style]
Cheers
F-0
WE HAVE BEEN STOOGED BY THE BIG-2 SUPERMARKETS…..
SAVE 4cpl [WHICH WE ALREADY PAID FOR]TO SAVE WHAT, $2? OVER A 50L PURCHASE…
BIG DEAL, THE LOSS OF THE SMALL OPERATORS WILL SCREW US OVER
BYE
GORGY
I love the fuel coupons. Allows me to buy a Mars Bar each time I fill up :)
I would urge everyone to write/e-mail their local senators, and these independants in particular, asking them not to support the Fuelwatch scam. I have.
F-O, here i was thinking you were a twit and you go and say some,thing sensible like that :)
Let’s hope the senate makes a similar finding WRT the luxury car tax increase.
I don’t understand why this is such a huge issue, the scheme works really well in Perth. The main benefit is that the price of fuel at each station doesn’t change for the whole 24 hour period, we’ve all driven past a petrol station and seen a good price only for it to be higher later in the day.
Additionally, it causes stations to be competitive, if a particular station’s price is too high compared to others, it means they’ll have less business during that day. I relate it back to price matching in department stores and the sort, as far as I’m concerned I never ask for a price match, I just buy the product where it’s the least expensive. Why should I be giving busy to the store that couldn’t be bothered being competitive in the first place!
Alex II,
The problem is it doesn’t really work.
The Govt. quote weekly “aveage” prices, but anyone who buys on one of the cheaper days will pay much less than average price.
Fuelwatch stiffles the discount cycle:
Most states have a weekly discount cycle (which is VERY predictable) with a price fluctuation of about 14 cpl.
Perth tends to have a fourtnightly discount cycle with a fluctuation of about 10 cpl.
What that means is the lowest weekly price around Aus is usually at least 2 cpl less than Perth’s lowest. Then on every second week, the lowest price elsewhere is at least 7 cpl less than Perth.
Anyone with 1/10 of a brain already knows when the prices will go up, and by about how much – we don’t need an expensively administered scheme (scam) to tell us that and cost us more.
Fuelwatch will stiffle the discount cycle, pressure independants, stiffle long term competition and cost people more for petrol – encourage the Senators to oppose it, and do it NOW.
How does fuelwatch increase price collusion? If the oil companies want to collaborate on pricing, they will do so, regardless of fuelwatch.
Also to Bret, I can see your argument with the discount price cycle.
However, look at it from this perspective: on a given day, there is an average fuel price but there will be many stations selling well below that price.
Fuelwatch enables to you see which service stations are doing this, and also provides incentives for those services stations to do it because it’s like free advertising for them.
The alternative is to “shop around” for the cheapest petrol which we all know is pointless becuase it costs more to drive around trying to find the cheapest petrol than the savings you get.
Dunno, just trying to put forward and alternative argument.
RoFlmaTiC,
You can already do this. Go to:
motormouth . com . au
This is the resource that most media outlets already use, and makes any argument for FuelWatch totally superflous.
Does motormouth give you the prices a day in advance like the fuelwatch alerts do?
I just had a look at the fuelwatch site, the lowest price anybody is paying in Perth today is 139.9 (all day), what’s the lowest we are paying here in Sydney today? 154.9 I saw on the way to work
I live in Perth. And I buy petrol. And I can tell you from experience in buying that petrol that Fuelwatch does work.
It means I don’t care what day I buy petrol, nor do I give two hoots what day in the price cycle we are, because the prices don’t move much each day. Sure, prices go up, but all the fuel stations are the same, or close to the same.
The three fuel stations around me are always the same prices, or very similar prices, as they can’t afford not to be. They are locked in for the whole day, and can’t change their price. If they set their price too high, everyone goes elsewhere.
Sometimes I even check the website and get the lowest prices, but mostly I can’t be bothered driving 10km to save $2.
To be totally honest, I don’t care what the eastern states do, whether they take up fuelwatch or not, as long as we get to keep it. It does work.
Fuel is expensive…way to expensive. Time to adapt, deal with it and move on. Crying over a few cents per litre is folly. Get smart not angry.
The sellers of fuel at servo are ones who can alter price. The fuel companies are not that massively organised to collude prices as some on here espouse!
This FuelWatch is further proof of the very basic silly approach Dudd and his tossers do…..$$$$$$millions spent and result is FLUNK WITH HONOURS! Interest rates are again near double digits and its time to stop and not pass buck and blame Howard as ever since this Dudd got in it has gone worse. Under Howard it was fine as this was reflected in international community awarding Australia with CREDIT RATING that increased 3times under Howard. Under Keating it fell 3times real low and we are seeing this from the spin Doctor of meetings and consultations Mr Dudd!
Anyway, back on the topic of fuelwatch…
Seems that if everyone in perth (or at least both sides of parliment) are supporting it’s continuation, there must be some benefits to it. So worth giving it a go on the east coast – if it doesn’t work, scrap it.
Personally I like having to work out which day of the week to buy petrol on, but I understand that it gives people who need to save money the oppportunity to do so. So bit of trade off there.
However, as it’s the only industry I can think of that has a “discount cycle”, it just seems inherently dodgy to me. So anything to make pricing more transparent, seems like a good idea. Even if I end up paying an extra cent or two overall, I don’t *feel* like I’m being ripped off as much.
Alex II,
That’s odd — motormouth reports that Perth has an average price of 153 while Sydney has an average price of 152.5. Cheaper than Perth!
I don’t think so MatthewM, not if you check out:
www . fuelwatch . wa . gov . au
Without the spaces obviously. It reports todays perth average to be 144.4
Might be a good site to have a look at if you’ve never seen it before.
Though comparing prices interstate isn’t a fair comparison as there are different transport costs. Isn’t all our oil shipped from Singapore? Which would make Perth a little closer and this could also be a factor in the lower average price here.
I use their email service every day, I can select which suburbs which i travel through/live and it tells me which one has the cheapest fuel for the day. How can that be so bad? All the other services tell me just where the cheapest fuel station is. Like if i live in rockingham (south), its no use to me telling me the cheapest fuel station is in bloody joondalup (north), then i have to drive out of my way just to save 2c a litre, defeating the purpose of buying at the cheapest fuel station. It all comes down to the definition of perfect competition, one key factor is perfect information where everyone has perfect knowledge of prices everywhere. Fuelwatch does just that. For example tomorrow i know the where cheapest fuel on my route to and from work is;140.8 , sure there are cheaper fuel stations, but why should i drive extra km’s out of my way using more fuel.
The argument of the price cycle is really clutching at straws arguement. We still have a price cycle here in perth, its cheapest to buy on tuesday, i paid 141.3@ peak yesterday then take a 4c discount off that with a IGA discount… yes Independents are now fighting back.
Nautilus Maximus, please… stop chanting silly anti government messages, no matter who gets voted in there will be whingers, i mean i can tell you during the howard government the CPI was calculated without petrol and LCD TV’s were substituted in as LCD’s were dropping and petrol was rising. The logic behind it is simple, but do you buy a LCD tv everyday as part of your daily shop? The effect was a lower inflation figure that the RBA then uses, to determine whether to increase or decrease rates each month… please dont copy what today tonight and current affairs say. All governments screw around with the figures to suit their agenda, some more so than others. Probably only 5% of the population know whats going on, the others listen to the news.
The fact is, in Perth fuelwatch is a non-issue. Both sides of politics like it, so hopefully it will stay here for awhile. Most people here like it, or don’t care. Never met anyone who hated it, unlike Daylight savings…
Not sure, but didn’t Perth used to have the most expensive petrol? Not so now…
Naughtyius Maxiumus do you watch a lot of channel 7 by any chance?? You sound just like that chick on Today Tonight. Howard put us in this mess with rising inflation and interest rates. It’s only now starting to turn around.
Anyways, good to see there a lots of points of views here. Freedom of speech at work!
Cheer,
Chris.
Minnow,
Motormouth can tell you the same information, not just the cheapest single station in the city, and it works around Australia.
Is the e-mail service free? For the rest of Australia, Motormouth is.
The discountcycle argument is very valid. I hope that you can see the graph in this link (without being a registered user):
motormouth . com . au/newsletters/0807.htm
Clearly whilst Perth may have a lower monthly “average” price, anyone who utilises the real discount cycle elsewhere in Australia will be buying cheaper petrol.
The graph also clearly shows that Perth is the only state not to have a genuine weekly discount cycle, and it can only be attributed to Fuelwatch.
BTW did you know that “Motormouth” was originally called “Fuelwatch” (but I don’t know who used the title first).
So pretty much as far as the the rest of the country goes Perth can keep fuelwatch, we don’t need the extra cost burdon that it WILL cause us.
Motormouth doesn’t show the prices a day in advance though does it?
I wonder where the phrase “discount price cycle” actually came from. It’s a crock if you ask me, more like price hike cycle :P I don’t see how these weekly/fortnightly price hikes are justified at all, except as a flexing of the power of the petrol market giants.
No, Motormouth doesn’t show the prices a day in advance, but anyone with half an idea can tell you what it will be.
The regularity of the cycle is extemely predictable.
In SA you just fill up on the way home Tuesday or the on the way to work Wednesday and you’ll be getting pretty much the best deal, week in week out.
That obviously doesn’t happen in WA anymore because Fuelwatch has stiffled the regu.arity of the cycle.
You see we just don’t need Fuelwatch, nor the additional administration expense that it will bring.
It WILL COST the average SA driver at least 5 cpl MORE to have the Fuelwatch scam implemented.
And yes it IS a discount cycle because it is a discount on the terminal gate price, which is arguably over inflated to enable the discounts – but what commodity isn’t. Anything that you buy on a “discounted special” obviously has the margin built-in to cover any discounts.
Fuel watch,who cares,up in the hills unless you drive 30 mins to find another servo that has 98 you only have one choice BP!!There is Gull but no thanks!
MatthewM
I had a quick look at my post and I couldn’t see where I mentioned average. It is the lowest people could pay for petrol in Perth on that particular day and that is the point. If you live in Perth you can look for the lowest price on a particular day, average price is just confusing the issue.