The Victorian Automobile Chamber of Commerce (VACC) is questioning the current discounting campaigns by supermarket giants Coles and Woolworths.
VACC executive director David Purchase believes the heavy discounting of fuel is a “significant blow” for independent service station owners and will cause long-term problems for motorists.
“Independent service station owners survive by the skin of their teeth at the best of times,” Mr Purchase said. “However, when the supermarket chains and their partners heavily discount fuel as they are now, independent service station owners have no chance of competing with them. They just have to accept there will be a loss of customers during this period. For some, this loss may force the business to close.”
The VACC says there are currently fewer than 250 independent service stations in Victoria, down from thousands in years gone by. Mr Purchase says the Australian Competition & Consumer Commission (ACCC) has a responsibility to ensure competition in the service station sector by supporting and promoting independent servos.
“Without competition, the supermarkets, not market forces, can drive fuel prices and this is what we are seeing right now,” he said.“We question if the current discount war is a marketing ploy and if it has anything to do with world oil prices or the Australian dollar. ACCC has a duty to monitor predatory pricing and abuse of market power and we call on new Chairman, Rod Sims, to intervene.”
The national average weekly unleaded fuel price is currently at its highest level of the year. Last week, the national average price peaked at 146.3 cents/litre, significantly higher than February’s 135c/litre levels and up considerably from the first week of September, which was still below 140c/litre.
The price of unleaded is in contrast to diesel fuel, however. Last week, the national average weekly diesel fuel price dipped to 148.0 cents/litre, its lowest level since the first week of March.
Do you agree with the VACC? Should the government do more to support independent service stations, or should the supermarket chains be left to set the price trends? Let us know in the comments section below.