The other day I sent off an email to the petrol commissioner complaining about the disparity of diesel to unleaded prices,
well today I received a reply; make of it what you will:
Thank you for your email of 20 November 2008 to the Australian Competition & Consumer Commission (the ACCC) regarding the price of diesel.
The role of the ACCC is to ensure compliance with the Trade Practices Act 1974 (TPA), which is designed to encourage fair trading and discourage anti-competitive conduct through a specific set of competition and consumer protection rules.
Since 1 August 1998 petrol and diesel prices have been deregulated and wholesalers and retailers are free to set their own prices based on market conditions. However, on 17 December 2007 the Assistant Treasurer and Minister for Competition and Consumer Affairs, the Hon Chris
Bowen MP, directed the ACCC to formally monitor prices, costs and profits relating to the supply of unleaded petrol products in the petroleum industry in Australia.
The ACCC has acknowledged the substantial increase in Australian diesel prices and continues to monitor international benchmark prices and retail price movements on a daily basis across capital cities and country towns as directed by the Assistant Treasurer and Minister for Competition and Consumer Affairs, Mr. Chris
Bowen.
Movements in fuel prices in Australia tend to follow international benchmarks. The benchmark for diesel is
the spot price of Singapore Gasoil (with 50 parts per million sulphur content). The benchmark for petrol is
the spot price of Singapore Mogas 95 Unleaded, which is refined petrol and not crude oil. There is generally a time lag of around one to two weeks between changes in international prices and changes in retail prices, due to the averaging formula used by refiners in Australia when setting their wholesale prices. This lag may be longer in country areas because fuel stocks are replenished less frequently by wholesalers and retailers in the country, due to the generally lower volume of sales.
The ACCC has also released a booklet Understanding petrol pricing in Australia – Answers to some
frequently asked questions, which aims to help consumers to understand petrol pricing in Australia. I have attached a link to this publication for your convenience:
http://www.accc.gov.au/content/item.phtml?itemId=759646&nodeId=2272bce5fa908a51b04c8a154724d915&fn=Understanding%20petrol%20pricing%20booklet.pdf.
The booklet also notes (on page 11) that the level of competition in local markets is determined by many factors including:
·
population,
· geographical location,
· the number of wholesale suppliers,
· the point of supply (i.e. whether the supplies are sourced directly from the terminal or through distributors),
· whether the fuel is bought on a contract or non-contract basis,
· the volume and frequency of purchases,
· the extent to which discounts are provided,
· freight and distribution costs,
· the level of price support provided by the oil companies,
· the scope of the retailers’ business operations (i.e. whether other goods and
services are provided),
· the types of retailers (i.e. oil majors, independents and supermarkets),
· the number of retailers,
· the margins set by retailers,
· the profile of customers (e.g. whether they are primarily locals or people passing through), and
· possible anti-competitive practices (such as price fixing).
Thank you for contacting the ACCC , I trust this information is of interest.
Yours sincerely,
Louise
ACCC Infocentre
Ph: 1300 302 502
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I knew I was probably wasting my time and this confirmed it.