Tricky subject petrol, that is if you want to get the view of Aussie fuel suppliers. With reports that recent price increases are the start of a new surge in fuel costs, Neos Kosmos sought the opinions of three companies in Victoria involved in fuel supply and retail. Two declined to discuss the subject at all, a third agreed but asked for anonymity.
But why the reluctance? Is it a reaction to the conspiracy theories that abound of collusion between the big players, stories of monopolies that reduce competition and a propensity to discourage analysis of profit margins at the bowser?
Who knows, but a questioning consumer, you would have thought, might be given an answer.
The Australian Institute of Petroleum shows that the average weekly retail price for ULP nationally rose from 140 cents per litre in January to 143 cents by the weekend ending 26 February, but national averages can be misleading. The petrol pricing watchdog Motormouth reports a running comparison of average petrol prices nationally for state capitals.
Looking at figures for the end of February, Queenslanders are paying a premium, compared to Sydney and Melbourne motorists. On the last day of February Brisbane’s average unleaded price was 144.7 cents per litre, compared to 145.2 cents for Sydney, and 146.1 cents for Melbourne. But what’s fuelling the increase? Australia’s prices are tied to the Singapore mean price for 95 octane petrol, the regional refinery hub from which Australia imports 25 per cent of its energy needs. As always, the price of crude oil is the dominant factor.
The driving force has been the 30 per cent price rise over the past year of Tapis crude oil,- the pricing benchmark in Singapore. This rise is a result of a surge in oil demand from China, Russia, India and Brazil, as well as the effects of the improving economic conditions in the US. Tensions around Iran’s nuclear ambitions and the West’s potential response are seen as another factor pushing the price higher. Last week the price of Tapis crude hit $US134 a barrel – its highest level since 2008 – which some media are reporting, will result in Australian motorists paying $1.55 within a fortnight.
The Melbourne retailer with over 30 outlets who agreed to talk to us off the record, said that no one could accurately predict the market, and suggestions of a return to the all time high of $1.67 in the coming months, may well be incorrect. “There’s always a cycle occurring, pretty much every two weeks at the moment, but that changes, there’s always a seesaw affect. Our retail price is in mid 140s, and our seven day wholesale price forecast doesn’t reflect the kind of fluctuation [that would lead to a price of $1.55] – it’s not showing that kind of rise.
“Our buy price in the coming week is very static, it’s within half a cent, what will happen in the weeks ahead we simply don’t know. No one knows.” Analysts say that without the strong dollar Australia would be experiencing European-style petrol prices.
Meanwhile, last month independent senator Nick Xenophon said that the federal government should sack the ACCC’s petrol commissioner for failing to uncover a ”scandal” in fuel pricing, The senator’s comments followed claims by the Australian Automobile Association that motorists had been ”short-changed” during Woolworths’ and Coles’ 8 cents a litre ”double discount” offer, which began in October.
“The $330,000 a year the petrol commissioner Joe Dimasi earns and the $1 million it costs to run his office could be much better spent on peak motoring bodies doing the monitoring,” said Senator Xenophon. Whilst we might remind ourselves, that relatively speaking, we are still a lucky country when it comes to filling up the tank, alleged rorts and lack of transparency stalks the fuel industry. Perhaps a change of plugs is overdue.