The report also suggested that Australian petrol prices were comparatively low by international standards.
The report has enabled the ACCC to further explore factors influencing petrol prices, and the industry's profits, costs and revenue, after releasing recommendations from its 2007 petrol price inquiry. For reference, prices in Australia closely follow the price of Singapore Mogas 95 (95RON petrol), which is used as the regional benchmark for prices.
"Movements in Australian petrol prices are overwhelmingly determined by international petrol prices,'' ACCC commissioner Joe Dimasi said in a statement, "Between mid-July and mid-December retail prices had fallen by at least as much as Mogas prices had fallen.''
There was however some discrepancy in pricing between December 2007 and October 2008 where petrol prices did deviate quite sharply from the international price for a short period. The ACCC found the deviations were due to "supply issues'' in New South Wales, Victoria and Queensland, an increase in international freight costs, volatility in the Singapore Mogas 95 index and fluctuations in the value of the Australian dollar.
City and country petrol prices were also examined, with prices in rural areas (and the three smaller capital cities) six to seven cents per litre higher than the five largest metropolitan cities. Pricing differences were due to a combination of factors including higher transport costs, lower volumes and less competition in the regional centres.
The report also confirmed findings from the 2007 petrol inquiry which found the petrol industry was concentrated at the refining and wholesale levels. New competition in the market faced significant barriers from current arrangements by the oil companies and the "low potential'' for large-scale independent importing.
During the year, petrol retailers had also seen substantial cost increases primarily reflecting crude oil costs and wholesale petrol costs while industry profitability had not increased despite petrol price increases. Profitability levels more generally didn't appear to be higher in comparison to other industries.
The Federal Government has asked the ACCC to produce two more annual reports into petrol prices within the next two years.