Diesel price gap ‘anomaly’

Submitted: Saturday, Jan 03, 2015 at 08:12
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Reply By: Robin Miller - Saturday, Jan 03, 2015 at 08:21

Saturday, Jan 03, 2015 at 08:21
What can you say Ozmik

Any opening is exploited in order to make a profit - its our way of life and to a reasonable extent businesses need it to survive.

The other day I got fuel, petrol at 99.9 cents , (using an extra 10c shopper docket).

Never thought I'd see that day again.
Robin Miller

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Reply By: Joe Fury - Saturday, Jan 03, 2015 at 10:33

Saturday, Jan 03, 2015 at 10:33
There seems to be a huge "anomaly" with everything related to the staples of life and living if you just happen to be someone who exists outside of a state capital city.

We cop it hard in every respect and not just by the big suppliers be that for food or fuel ~ motor vehicle and home insurance etc, just because you live above a line that appears on a map, in this case it's the 26th parallel.

Fuel prices where I live in the Pilbara are still well and truly above $1-60 per litre for diesel and the other stuff isn't far off it either, there is no public transport in my home town, the irony is there is a good public transport service net work where the fuel costs are falling the quickest and my guess is that most of the traveling will not be with public transport.

I know it sounds like a whinge, but when you live in a town and region that is feeding off the resource industry the rules change and the morals of most business's appear to slide deep into the abyss of greed.

Safe travels : Joe Fury
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Follow Up By: garrycol - Saturday, Jan 03, 2015 at 10:50

Saturday, Jan 03, 2015 at 10:50
Yep - a sad fact of life. We live in a capitalist society of supply and demand where few industries are regulated by the government.

So as fuel is basically unregulated fuel companies can charge what consumers are prepared to pay. If they charge too little then the companies loose profit, charge too much and demand begins to drop off and the companies loose profit so the sweat spot is in the middle and us consumers have to wear it whether we like it or not.

The price of an unregulated commodity is not determined by the costs of production but what the consumer is prepared to pay.
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Follow Up By: AlbyNSW - Saturday, Jan 03, 2015 at 16:53

Saturday, Jan 03, 2015 at 16:53
Garrycol has nailed it on the head. Fuel is no different to any other product, they charge what the consumer is prepared to pay. The banks do it, as does the hardware store, supermarket and hotdog stand at the footy

And Joe stop your wingeing, you could be stuck in bleep ney like a lot of us LOL
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Follow Up By: PajeroTD - Sunday, Jan 04, 2015 at 09:46

Sunday, Jan 04, 2015 at 09:46
Increased supply and increased competition the keys for lowering prices. That means less regulation, not more. Increased regulations are sold to you on the basis that it is to help you out. They actually do the opposite in most cases. I'm not saying there should be no regulation, I am saying that we have too much for it and it is screwing us all, except for OPEC and the incumbent big corporations.
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Follow Up By: Joe Fury - Sunday, Jan 04, 2015 at 14:06

Sunday, Jan 04, 2015 at 14:06
G'day AlbyNSW

Yep, sorry mate I should stop this whinge mood that I seem to be in, after all the Pilbara is a great place.

I can't say enough nice things about the region as a destination to travel to and explore, but it's a bummer having to pay a "Pilbara Premium" on top of the already high costs that we locals have to pay.

Funny that you should mention the "hardware store" ~ I had the real need to purchase a pair of 50 amp Anderson plugs, $3-20 or so off/on ebay, but that's ebay, ~ Local hardware price $20 + a few cents each ! ~ I'm the same when I have to replace a 9kg LPG tank for the caravan or barbecue at $50 + per 9kgs and $5-50 for a loaf of sliced bread, imported frozen from Perth.

Yes I actually paid that "Pilbara Premium" but I whinged and whined and possibly even swore too, but hell I had to have the Anderson plugs to finish a wiring job.

Alby, no malice is intended in my reply.

Safe travels : Joe Fury
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Follow Up By: Bazooka - Sunday, Jan 04, 2015 at 15:19

Sunday, Jan 04, 2015 at 15:19
The laws of supply and demand wrt fuel MAY be evident in the wholesale market but they don't currently apply in the Australian retail fuel market outside a few major cities from what I can see. The price parity argument has been conveniently thrown out the window.

What we are actually seeing is the law of competition - or lack of it. Throw a cat like Costco among the Wesfarmers/Woolworths pigeons and see what people are really prepared to pay.
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Reply By: Kris and Kev - Saturday, Jan 03, 2015 at 10:51

Saturday, Jan 03, 2015 at 10:51
My latest idea is that fuel prices should be turned around. As we know capitol cities usually have the cheapest price and the drivers on average travel the least distance. Think about if the pricing was the other way. In each state the lowest price of fuel would be where it is the longest distance from a capitol city and then the capital city would be the highest. What would that achieve? People who generally drive the longest distance would pay less per litre, food would be cheaper, city people would be encouraged to use public transport and maybe even move out of the city. Just think about the change this could cause. I know it would never happen and there would obviously be obstacles. BUT???? Kevin
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Follow Up By: Member - meatman61 - Saturday, Jan 03, 2015 at 10:59

Saturday, Jan 03, 2015 at 10:59
Also, when the discounting is at its peak time, a gap of 25c/litre between petrol and diesel is quite often seen in Adelaide. We Diesel guys and gals are subsidising that petrol discount.
As was said before, production cost has nothing to do with pump price.
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Follow Up By: get outmore - Sunday, Jan 04, 2015 at 15:33

Sunday, Jan 04, 2015 at 15:33
AYY?? Kris and Kev who said drivers in the city travel less distances ??

in my experience its the polar oposite I moved to perth after 10 years in kalgoorlie and my kms travelled doubled pretty much
all the day to day places you go are often so much further in the city.
in kalgoorlie probally half of my travelling was by bike and nothing is more than a few km away usually much less
in my experience that idea is a furphy - in perth even visiting friends can be 30-40 min drive rather than a 5 min bike ride and no i dont live in the outer suburbs Im within 15km of the CBD
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Follow Up By: Kris and Kev - Sunday, Jan 04, 2015 at 18:42

Sunday, Jan 04, 2015 at 18:42
I see your point, but I know we clock up at lot more k’s then my family who live in a city, way more. We live over 200’ks from any family members so travel a lot just visiting them. Then there are the drives to places that have more variety of shops and businesses and medical. We have been in Brisbane for 8 weeks now for medical reasons and have not had to drive far at all for these things. So maybe I was generalising with my assertion. But I still would like to get cheaper fuel prices where we live, and NO, I do not want to move to a large city! (: Kevin
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Reply By: Member - Silverchrome - Saturday, Jan 03, 2015 at 15:30

Saturday, Jan 03, 2015 at 15:30
There is the issue of supply and demand at different times of the year for diesel. Diesel is in effect a fuel oil. In our summer (the northern hemisphere winter) there is significant increase in demand for heating oil...thus there is pressure on diesel prices here. In our summer the difference in price between petrol and diesel is the greatest (with diesel the most expensive). In the northern hemisphere summer demand subsides or is minimal for heating oil thus allowing more of the fraction to be distilled into diesel. Hence diesel price gap to petrol reduces.

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Follow Up By: Member - Mark (Tamworth NSW) - Saturday, Jan 03, 2015 at 15:59

Saturday, Jan 03, 2015 at 15:59
I thought Aussie prices were set on Sing gas (diesel)? Not much demand for heating in that region?
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Follow Up By: Member - Silverchrome - Saturday, Jan 03, 2015 at 16:04

Saturday, Jan 03, 2015 at 16:04
We live in a global economy and what happens in one area impacts elsewhere. If an overseas refinery can get more money in the northern hemisphere winter for fuel oil then that will concertina down to prices elsewhere. Its pure supply and demand economics.
FollowupID: 830680

Follow Up By: garrycol - Saturday, Jan 03, 2015 at 16:30

Saturday, Jan 03, 2015 at 16:30
Mark - yes but the Singapore price is a world price and most of the fuel is sold to northern countries - so places like Aust have to pay the winter northern diesel price.
FollowupID: 830682

Reply By: Ron N - Sunday, Jan 04, 2015 at 02:30

Sunday, Jan 04, 2015 at 02:30
You're whingeing about the diesel rort?? What about the total shaft that is LPG??
Historically, LPG has been 40% of the price of petrol. Now that petrol is around $1.10 litre, LPG is still around 80c litre!
What a total and complete rort this is!! LPG was burnt for years as a waste product!!
Every LPG installer and LPG fuel developer has effectively shut up shop, and I'm convinced this is no accident.
The fuel companies don't want any competition, and keeping the LPG price high is the way to kill it off.
Anyone who has installed an LPG conversion or bought a factory LPG vehicle in recent times, has totally wasted their money!
AnswerID: 543691

Follow Up By: Member - John - Sunday, Jan 04, 2015 at 05:39

Sunday, Jan 04, 2015 at 05:39
Wait until the price of domestic gas starts rising due to the demand for the Gladstone trains, they predict a tripling of gas prices........ ouch.
John and Jan

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Follow Up By: garrycol - Sunday, Jan 04, 2015 at 10:01

Sunday, Jan 04, 2015 at 10:01
But the LPG is not linked to the petrol price - prices move independently and have their own drivers.
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Follow Up By: Ron N - Sunday, Jan 04, 2015 at 12:39

Sunday, Jan 04, 2015 at 12:39
garrycol, I'd love to know what those "drivers" are, exactly.

LPG is a major source of energy and every other energy source has dropped in "market" price, like a stone - even LNG. So why is LPG so precious?

Does the phrase, "price manipulation", ring a bell for you?

Cheers, Ron.
FollowupID: 830719

Reply By: Member - Nutta - Sunday, Jan 04, 2015 at 22:33

Sunday, Jan 04, 2015 at 22:33
I remember when diesel was a hell of a lot cheaper than petrol, so did things get cold all of the sudden in another country??

Obviously they are making it so that whatever fuel you use in whichever car you drive it all adds up to about the same for the kilometres travelled.

Well thats my opinion anyway!
AnswerID: 543757

Reply By: swampfox - Thursday, Jan 08, 2015 at 17:35

Thursday, Jan 08, 2015 at 17:35
Fuel in Townsville $1.40
Fuel is cheaper 100km away in small town yet it comes from Tsv
Fuel cost can be had Sydney $1.oo
The forcast from RACQ is fuel should be at the max 1.25
ACCC useless
Nothings changed ,no competition ,price ripoff, fat cat feeding system

AnswerID: 543936

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