I noted in a
(Fuel Blog) in early November that fuel was being sold cheaper than cost and this was one of the reasons the ‘spread’ between ULP and diesel has blown out in recent times.
Following is a news story not long out that has the Motor Trade Association (MTA) calling on the ACCC to investigate the predatory pricing by the big players (read - Coles and Woolworth’s) and why they are selling fuel below cost on a regular basis in recent times.
The implication is that they will drive out the Independents. Another one of my pet subjects – this is precisely what FuelWatch would have achieved – the demise of the Independents.
Just a new twist on an old story that demonstrates there is a flip side to everything; even cheaper fuel prices. Whilst we all welcome that, it could come at a cost.
News Story
ADELAIDE, Nov 26 AAP -
Adelaide's big petrol retailers appear to be selling fuel cheaper than they can buy it, putting independent operators at risk, the Motor Trade Association says.
The MTA has called on the consumer watchdog to undertake an urgent investigation into petrol pricing in the city, where prices this week fell to 99.9 cents per litre.
MTA executive director John Chapman said he was concerned that unleaded prices in
Adelaide were below the wholesale or terminal
gate price of about $1.05, putting independent retailers at risk.
"We are concerned that our members are being forced into a loss making situation and this may be occurring due to a predatory pricing behaviour by big players in the market," he said.
Mr Chapman said independent operators faced ruin if the situation continued forany length of time.
"One thing we can assure the South Australian motorist is that should the independents drop out and the market is left to big business, we will see the end of the competitive petrol market," he said.
A spokeswoman for the Australian Competition and Consumer Commission said there was no specific information to suggest the discount was inappropriate.
"We understand prices can and will fall below cost price at the bottom of the weekly cycle, but we will be keeping an eye on it," she said.