Australia at mercy of overseas petrol markets: ACCC

The ACCC is undertaking two investigations into competition in the petrol industry.
The ACCC is undertaking two investigations into competition in the petrol industry. Trevor Veale

A REPORT into the Australian petrol industry has found people living in regional areas pay more for their fuel than those in the capital cities.

This was one of the key findings in the Australian Competition and Consumer Commission's report that examined prices, costs and profits of unleaded petrol in Australia.

ACCC commissioner Joe Dimasi said the report, released on Thursday, also showed Australia was at the mercy of overseas petrol markets.

"The main influences on domestic petrol prices in Australia are international prices, which reached record levels during 2011-12 despite weak global economic conditions," ACCC commissioner Joe Dimasi said.

The detailed report shows that over the 12 months to September the average price for unleaded fuel in the capital cities was 140.1 cents per litre, compared to an average of 144.2cpl across about 180 regional areas.

Mr Dimasi said the ACCC monitored prices in regional locations "to ensure that markets remain as competitive as possible".

He said as many regional locations had a small number of retail outlets, the ACCC also paid particular attention to sales of retail sites to ensure changes in ownership did not result in a substantial weakening of competition.

"Prices in regional locations are generally higher than in the five largest cities for a number of reasons, including: lower number of service stations and therefore a lower level of local competition; lower volumes of fuel sold; distance/location factors and lower convenience store sales," the report read.

The report found while prices in regional areas were higher, they typically followed the same overall price movements as the cities.

Mr Dimasi said higher regional prices and price cycles in major metropolitan markets were the main sources of consumer concern.

"The sharp price rises during a price cycle drive many complaints to the ACCC although it is also the case that many consumers take advantage of the low point in the cycle to purchase petrol," he said.

The report also dispels the perception excessive profits are being made by petrol retailers.

Profits in the Australian downstream petroleum industry across all products in 2011-12 were $408 million or around 0.5 cents per litre - a fall of 81% compared with the previous 12 months.

The ACCC is undertaking two investigations into competition in the petrol industry.

The first is examining information sharing between retailers, while the second is looking at the effects of shopper docket discount schemes.

Topics:  accc australian consumer and competition commission petrol

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