The Australian Competition and Consumer Commission has released its 2013 report on the prices, costs and profits of unleaded petrol in Australia which shows domestic petrol prices remained high on the back of persistently high international prices.
“The report shows that international prices and domestic fuel taxes are the key drivers of petrol prices,” ACCC Chairman Rod Sims said.
The average annual retail price at the pump for the five largest capital cities during 2012?13 fell slightly to 141.3 cpl compared with 142.8 cpl in 2011?12.
“The monitoring report shows that the international price of petrol plus fuel taxes account for 89 per cent of the retail price of petrol, while the local wholesale and retail sectors account for 11 per cent of the final price.” Of the average annual price of 141.3 cpl: the international market price of refined petrol contributed 74.2 cpl (53 per cent) while government taxes contributed 51.0 cpl (36 per cent).
In 2012-13, prices generally moved in line with the relevant international benchmark price (Singapore Mogas 95). International prices of crude oil and refined petrol have remained at historically high levels despite weak global economic conditions. The relatively high Australian dollar again provided some protection from higher international prices. Due to lower taxes on fuel compared with other countries, petrol prices in Australia are still among the lowest in the OECD.
“The report also highlights that smaller losses in refining and higher profits in retail were the main contributors to increased industry earnings,” Mr Sims said.
In 2012-13 net profits in the retail sector of the downstream petroleum industry increased to $535 million across all products and services, up 18.9 per cent on the previous year in real terms. Profits from convenience store sales were up 17.1 per cent in real terms to $205 million.
The release of the 2013 petrol monitoring report comes as the ACCC finalised its investigation into competition concerns in relation to shopper docket fuel discount schemes offered by the major supermarkets. The investigation resulted in the ACCC accepting enforceable Undertakings under section 87B of theCompetition and Consumer Act 2010, from Coles Group Limited, Coles Supermarkets Australia Pty Limited, Eureka Operations Pty Ltd (Coles), and Woolworths Limited (Woolworths), that they would limit their ability to cross promote or cross subsidise petrol from their supermarket sales.
The ACCC is also investigating whether price information sharing arrangements in relation to the retail petrol sector may be in breach of the Act. This investigation is nearing completion and it is anticipated it will be finalised in the coming months.
Price cycles in major metropolitan markets and relatively higher prices in regional centres continue to be a significant source of consumer concerns.
“The increased duration of price cycles and the unpredictability of the low-price day has added to the frustration of consumers, particularly those who take advantage of the low point in the cycle to purchase petrol,” Mr Sims said.
The ACCC’s 2013 Monitoring of the Australian petroleum industry report and summary is available on the ACCC’s website. The ACCC also provides regular updates and information on petrol on its website including on price cycles.