ACCC response on Diesel prices

Submitted: Tuesday, May 16, 2006 at 09:44
ThreadID: 33932 Views:2088 Replies:5 FollowUps:9
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Sorry this is long, but is an ACCC response to my letter. I had to retype it to post it and left a few things out and abbreviated some words.

The accc is responsible for administering the Trade Practices Act 1974 (TPA). The main purpose of the TPA is to promote competition and efficiency in markets within Aus and to protect consumers from unlawful anti-competitive conduct and unlawful market practices.

Prior to 1 august 1998 the accc endorsed the maximum wholesale prices for petrol & diesel of the oil majors and established freight differentials. On that day petrol and diesel were deregulated and wholesalers are now free to set their own prices based on market conditions. However, the accc retains an informal monitoring role and closely monitors petrol and diesel prices in metropolitan areas and around 110 country towns.

Furthermore, the accc follows developments in the petroleum industry and will not hesitate to enforce the provisions of the TPA if there is evidence that it has been breached.

On 20 October 2000, the accc released a report on the movements in fuel prices – including petrol and diesel – in the September quarter 2000. That report outlined the determinants of fuel prices in Aus and discussed the factors that influenced price increases in the Sep quarter 2000.

The report notes that movements in fuel in Aus tend to follow international benchmarks. The benchmark for petrol is the spot price for Singapore Mogas 95 Unleaded and for diesel it is a combination of the spot price of Singapore Gasoil (80%) and Singapore Kerosene (20%) refined petroleum products.

Over the last year the benchmark for diesel has been higher than the benchmark for petrol. In Jan 2006 benchmark for diesel was over US$ 7 per barrel higher than petrol benchmark.

The report noted that unlike petrol, diesel retail prices in the metro cities do not display short-term volatility. It continued:

The commission’s 1996 inquiry in petroleum products, noted that diesel retail prices in capital cities do not display short-term volatility and commented that, unlike petrol, there appears to be no price support provided by oil majors. It also noted that wholesale price support appeared to be provided at relatively constant levels, resulting in stable retail prices in capital cities.

Other reasons why there are no price cycles for diesel in metro areas may be that the major sales of diesel are to commercial users with terms generally reflected in agreed contracts (which may include a discount on the pump price), and that most sales occur in regional areas.
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Reply By: Truckster (Vic) - Tuesday, May 16, 2006 at 10:14

Tuesday, May 16, 2006 at 10:14
Edited Version:

ACCC is a worthless toothless tiger.
I can still remember that twonk Alan Fels or what ever its name was telling the world that once Woolies and Coles controlled all the petrol stations that there would "always be a competitive market"..

AnswerID: 172905

Follow Up By: Member - Roachie (SA) - Tuesday, May 16, 2006 at 11:26

Tuesday, May 16, 2006 at 11:26
That bloody letter was a waste of paper and a 50 cent stamp!! It said sweet fanny adams and was full of political bull-twang that ended up saying naught!

Truckster; you've cut to the chase straight away once again. Friggin Worthless Twaddle...........
FollowupID: 428604

Follow Up By: Truckster (Vic) - Tuesday, May 16, 2006 at 11:47

Tuesday, May 16, 2006 at 11:47
I bet nobody has worked out yer that I work on the theory
"HIT ME DONT bleep ME"
Say it, if you offend buttercup, then bad luck ;)~

U got a website on ya truck and mods yet? Do one..
FollowupID: 428608

Follow Up By: Member - Roachie (SA) - Tuesday, May 16, 2006 at 11:56

Tuesday, May 16, 2006 at 11:56
Geez mate, behave!!!!!!!

What I know about 'puters (even though I sit in front of one every day and try to act/look important), you could write on the back of a half-sucked Aspro!!!

It took me bloody weeks just to work out how to get my Rig Pic on here.....what chance do ya reckon I'd have of ever getting a website up and running????? LMAO
FollowupID: 428612

Follow Up By: Truckster (Vic) - Tuesday, May 16, 2006 at 13:14

Tuesday, May 16, 2006 at 13:14
Well about time ya learnt!

it aint that hard :P Even Willem can do it ;) *runs and hides*
FollowupID: 428620

Reply By: Member - Sam (NSW) - Tuesday, May 16, 2006 at 10:20

Tuesday, May 16, 2006 at 10:20
You just have to look at who funds/influences who and its easy to understand why nothing will ever happen.

Can't have anyone upsetting the status quo!
AnswerID: 172906

Follow Up By: Truckster (Vic) - Tuesday, May 16, 2006 at 11:49

Tuesday, May 16, 2006 at 11:49
I think you hit it on the head dude.

While these same people fund/run everything, assistance/facts will never get out.
FollowupID: 428609

Reply By: Mr Fawlty - Tuesday, May 16, 2006 at 18:59

Tuesday, May 16, 2006 at 18:59
Guys Guys a little decorum please...
Now lets look at this objectively, massive tax cuts are in the offing AFTER July 07... what does that tell you? There will be an election before then. If the electorate keeps the pressure on re fuel taxes & prices someone may just have to do something to win the election...Maybe I'm the eternal optimist....Just wish I was the CEO of the Maquarie Bank on a paltry $5000 an hour....
AnswerID: 172994

Follow Up By: Truckster (Vic) - Tuesday, May 16, 2006 at 22:39

Tuesday, May 16, 2006 at 22:39
Maybe I'm the eternal optimist

theres no maybes about it dude.. wake up!
FollowupID: 428822

Reply By: awill4x4 - Tuesday, May 16, 2006 at 22:35

Tuesday, May 16, 2006 at 22:35
Take a chill pill guys, the ACCC response seems pretty reasonable to me.
They are telling you why it's more expensive than petrol with the benchmark price at a $7 premium per barrel. At current prices that equates to a 10 percent increase going at the current price of around $70 US per barrel.
Also due to the comparative low use of diesel in the domestic (read urban mum's and dad's) market there is little discounting as there is with petrol which has a much greater volume share. Any discounting is with the commercial market as is normal business practice. If the diesel market were much larger as in most of Europe the discounting would than be directed more to the diesel side of the equation.
Thanks Hound for passing on the information, it dispels a lot of urban myths regarding diesel pricing.
Me, I don't care, I'll still use my BBQ gas. lol.
Regards Andrew.
AnswerID: 173035

Follow Up By: Truckster (Vic) - Tuesday, May 16, 2006 at 22:40

Tuesday, May 16, 2006 at 22:40
shoosh you and plan my intercooler.
FollowupID: 428823

Follow Up By: awill4x4 - Tuesday, May 16, 2006 at 23:31

Tuesday, May 16, 2006 at 23:31
Yeah Bruce, I'm thinking maybe a water to air intercooler just to be a bit different.
FollowupID: 428859

Follow Up By: Truckster (Vic) - Tuesday, May 16, 2006 at 23:40

Tuesday, May 16, 2006 at 23:40
also one of these

Will see if I can get one off Chris S in the club to copy off
FollowupID: 428864

Reply By: robak (QLD) - Wednesday, May 17, 2006 at 11:05

Wednesday, May 17, 2006 at 11:05
THIS is interesting.

It's a transcript from the (2002) federal parliament about petrol prices and why the ACCC has not been given the power to freeze petrol prices like it had during the war with Iraq in 1990.

(because the ACCC doesn't need special powers as petrol prices are likely to fall soon)

Mr CREAN (2.19 p.m.) — ... Isn't it the case that in 1990, at the time of the Iraqi invasion of Kuwait, the then Labor government imposed a price freeze on petrol to protect motorists? What special powers does the government intend giving the Australian Competition and Consumer Commission to prevent petrol price rip-offs arising from high oil prices?

Mr DOWNER —In 1991, there was a war against Iraq. The point that this government has been making over and over again... that the question of a war against Iraq is a hypothetical question. Nobody at this stage has made a decision to take military action against Iraq.
One could hypothesise endlessly about the impact of... ... this issue on oil prices.

For example, you could hypothesise that, if there were to be military action taken against Iraq, oil prices would increase. And you could hypothesise that, if that military action were quickly successful and sanctions were lifted against Iraq,... ... Iraq would be able to increase substantially its oil production and its oil exports, and that would lead to a very substantial fall, at least on the face of it, in global oil prices. Inevitably there will be some increases in oil prices—

Mr DOWNER —... this morning on 3AW, the Executive Director of the Australian Institute of Petroleum was asked by Neil Mitchell, `So are we right to be worrying about petrol prices at the moment?'... ...`No, I think at the moment there is a bit of scaremongering out there.'...
...Iraq potentially supplies something like 10.9 per cent of the world's oil... .... In the event of sanctions eventually being lifted, I think the market expectation would be a reduction in global oil prices.

AnswerID: 173113

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