Who Regulates Petrol Prices in Australia and How Ethical are Prices?

I highly recommend people report when they suspect the petrol pumped is not accurate.  I looked at my fuel gauge today and the price dropped from 1.48 to 1.23 and it seems I have the same amount of petrol.  I am concerned that the operators are stopping petrol, as there is a period where it feels like the petrol is not pumping but the numbers are cycling.  I note that they advertised 1.24 then charged 1.23 this is a form of psychological marketing to give post customer satisfaction (keep you coming back). In truth it is unethical in truth. If they deceive on the signs why not the bowser? This was 711 I had visited.

Energy prices affect industry and consumers in respect of redirecting income to energy rather than other areas.  Industry prices go up as they pass on fuel increases to consumers. Ultimately it is the consumer who pays but industry does indirectly as markets contract if they are price sensitive.  It causes a contraction in consumer demand and will plunge some into further hardship if they can’t afford to run a car.  I overheard a woman explaining to a friend how she couldn’t afford to go anywhere as she couldn’t afford fuel.  She had a son and I wondered how this stress impacted her life.  We speak in economic jargon removed from the day to day realities of people.  Such is the disconnect of those making economic pricing decisions e.g. Organisational for Petroleum Exporting Countries (OPEC) and the energy wars they engage in to dominate markets.  Competition does not necessarily cause efficiency or lower prices, it often can be damaging given economies of scale, political influence, wealth, power, militarism and so on.  Such a complicated web has been created in the corridors of power and the unconscious response to greed.

I would like to add that I find the prices outrageous and the fact that Nicola Tesla invented free energy.  Maybe high prices might make people look and question why energy is not free?  Nicola Tesla’s story is revealing of the state of play of industrialists.  The Energy industry (fossil fuel) is at the epicentre of the wars we have witnessed and climate change, it is the core driver of planetary discord.  The bigger questions are in respect of what are the barriers to real change?

Lastly, I’d like to say I can barely afford to drive. I have no choice but to wait when it drops.  I borrow money to pay for it.  I recall when $20 filled my tank now it is a quarter tank.  Such has been the invisible hand that has taken from the community and filled its own coffers.  Note it is a non renewable resource extracted, pumped, refined, transported and delivered to retail.  It is a simple product distributed by extraction industries.  Yet if I could create bio fuel I would.  I spoke to a man who was doing this and it ran his car.  That is what real leadership would do and it would create a peaceful world at the same time.  It all depends on where we focus, what we value and who we truly serve.  Our world would change overnight if the highest good was served.

Here is a solution – How to Make Biodiesel Using Cooking Oil

 

Here is information from the Australian Competition and Consumer Commission – ACCC

https://www.accc.gov.au/consumers/petrol-diesel-lpg/about-fuel-prices#what-affects-fuel-prices-

About fuel prices

Fuel prices are influenced by many factors, including overseas and local market forces. While the ACCC does monitor petrol prices, we do not set or control them.

What affects fuel prices?

Fuel prices can go up and down due to a combination of factors:

  • changes in international benchmark prices
  • the value of the Australian dollar relative to the US dollar
  • levels of competition in different areas
  • pricing decisions by wholesalers and retailers.

International benchmark prices

For petrol, diesel and automotive LPG the largest component of the price you pay is represented by the international benchmark price.

The current benchmark prices for fuels sold in Australia are:

  • Regular Unleaded Petrol – Singapore Mogas 95 Unleaded
  • Diesel – Singapore Gasoil 10 parts per million sulphur
  • LPG – Saudi Contract prices for butane and propane

Changes in international prices can take around two weeks to work their way through the supply chain in Australian cities and longer in regional areas.

Petrol prices in Australia tracked against the international benchmark

The chart below shows how the price of petrol in the five largest cities (Sydney, Melbourne, Brisbane Adelaide and Perth) has been tracking against the international benchmark price over the last 90 days.

Chart showing how the price of petrol in the five largest cities has been tracking against the international benchmark

Source: Australian Competition and Consumer Commission, FUELtrac, Reserve Bank of Australia and Platts, the energy information division of McGraw-Hill, Inc.

Retail prices are seven-day rolling averages. They are regular unleaded petrol prices in all cities except Sydney which are E10 prices.

The international prices are seven-day rolling average Singapore Mogas 95 Unleaded prices, lagged by 10 days.

Australian dollar value

As international benchmark prices for petrol, diesel and LPG are priced in US dollars (USD), a change in the value of the Australian dollar (AUD) relative to the USD may affect the domestic price of fuel.

However, don’t expect fuel prices to fall every time the Australian dollar is higher than the US dollar. This can only happen if the benchmark price remains the same or falls and other local factors don’t push prices up.

Fuel wholesaler and retailer costs

Like any other business, fuel wholesalers and retailers have different costs they need to recover through their prices. These can include wharfage, freight, insurance, transport, storage, salaries, rent, power and other utilities. On top of this, wholesalers and retailers need to make a profit in order to make their businesses viable. This margin is ultimately determined by the level of competition in the marketplace.

Transportation and storage of LPG is more expensive than for petrol and diesel because LPG must be kept as a liquid which requires specialised storage and transportation.

Other costs and taxes

All retail fuel prices in Australia include GST at the rate of 10 per cent (or 1/11 of the total price paid).

Excise rates on fuel and petroleum products (other than aviation fuels) are indexed twice a year in line with the consumer price index (CPI) – generally in February and August.

Automatic indexation of fuel excise was re-introduced by the Australian Government on 1 July 2015.

For unleaded petrol (regular or premium grades) and diesel the price you pay includes Australian Government fuel excise, set at $0.412 per litre, as at August 2018.

For automotive LPG the price you pay includes excise of $0.134 per litre, as at August 2018.

More information on current fuel excise rates for all fuel types may be viewed on the Australian Taxation Office (ATO)(link is external) website.

Public holiday prices

Some consumers think petrol prices increase by more than usual just before public holidays and long weekends.

Our last detailed review of prices in the five largest cities around every public holiday found that, on average, public holiday price increases were no larger than the usual price cycle increases during the year.

These price rises may be more noticeable before holiday weekends because many motorists are making long trips and using more petrol than usual.

Petrol price cycles in larger capital cities

A petrol price cycle is a movement in retail price from a low point (or trough) to a high point (or peak) to a subsequent low point. In these cycles, prices steadily go down for a period followed by a sharp increase.

Price cycles are the result of deliberate pricing policies of petrol retailers, and are not directly related to changes in wholesale costs.

The duration of petrol price cycles in Sydney, Melbourne, Brisbane and Adelaide varies from cycle to cycle, and has increased in recent years.

In 2017, price cycle durations in these capital cities ranged from a low of 11 days to a high of 61 days.

In Perth, the price cycle has consistently remained around seven days.

See: Petrol price cycles in capital cities

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Fuel facts

Fuel reports

More information

ACCC’s fuel monitoring role

Mohandas Gandhi

“Gentleness, self-sacrifice and generosity are the exclusive possession of no one race or religion.”

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