The ACCC’s report into the prices, costs and profits of unleaded petrol in Australia revealed the average bowser price of 132 cents/litre in 2010-2011 was inline with the international benchmark price (Singapore Mogas 95) and the exchange rate.
Average fuel prices increased approximately eight cents/litre from the 2009-2010, yet the ACCC says prices in Australia remain among the lowest in the OECD. Since 2002, the average retail price of unleaded fuel in Australia has increased 112.5 per cent, while Mogas has increased 123.4 per cent over the same period.
The ACCC found no evidence of excessive profits in the Australian downstream petrol industry. It estimates petrol companies are making a net profit of 2.2 cents for every litre of unleaded sold, and says this is comparable with other local manufacturing industries as well as petrol industries in other countries.
Despite this, the ACCC says it is still looking closely at Australia’s petrol price cycles, which are deliberate pricing policies of the major fuel retailers rather than reactions to the changes in fuel costs. “The ACCC remains concerned about the level of co-ordination apparent in the price cycles and is analysing the likely effects of this behaviour on outcomes for consumers.”
High petrol prices are a major cause of complaint from motorists in regional areas, and although the ACCC admits there are a number of reasons for this (including higher transport costs and lower levels of competition), it is continuing to monitor prices in regional locations to ensure the market remains as competitive as possible and there is no price fixing or anti-competitive conduct.
The ACCC says this year’s higher petrol prices were a reflection of geopolitical tension in the Middle East and strong economic activity in Asia. Demand for oil continues to rise globally, as do oil prices, which this year reached a new and significantly higher average price.