ACCC Report on Petrol Prices

Submitted: Monday, Dec 22, 2008 at 16:42

ThreadID: 64484 Views:3353 Replies:6 FollowUps:13

This Thread has been Archived

The Landy

New story released this afternoon……noting it covers petrol (ULP) not diesel.

Cheers, Landy

13:50 22Dec08 AAP-Petrol prices follow international trends – report

CANBERRA, Dec 22 AAP - Petrol prices have closely followed international trends over the past 12 months, suggesting Australians are not being ripped off at the bowser, a report released by the competition watchdog has found.

The Australian Competition and Consumer Commission (ACCC) on Monday released the findings of its first annual report into unleaded petrol prices.

Australian petrol prices were still relatively low compared to international prices, the report found.

The report has enabled the ACCC to further explore factors influencing petrol prices, and the industry's profits, costs and revenue, after releasing recommendations from its 2007 petrol price inquiry.

Unleaded petrol prices closely followed the price of Singapore Mogas 95, which is used as the regional benchmark for prices, the ACCC said.

"Movements in Australian petrol prices are overwhelmingly determined by international petrol prices," ACCC commissioner Joe Dimasi said in a statement.
"Between mid-July and mid-December retail prices had fallen by at least as muchas Mogas prices had fallen."

However, between December 2007 and October 2008 petrol prices did deviate from the international price for a short period.

The ACCC found the deviations were due to "supply issues" in NSW, Victoria and Queensland, an increase in international freight costs, volatility in the Singapore Mogas 95 index and fluctuations in the value of the Australian dollar.
City and country petrol prices were also examined, with prices in country towns and the three smaller capital cities six to seven cents a litre higher than the five largest metropolitan cities.

Pricing differences were due to a combination of factors including higher transport costs, lower volumes and less competition in the smaller centres.

The report also confirmed findings from the 2007 petrol inquiry which found the petrol industry was concentrated at the refining and wholesale levels.

New competitors in the market faced significant barriers from current arrangements by the oil companies and the "low potential" for large-scale independent importing.
But despite limits at the wholesale level, Australian petrol prices were still relatively low compared to international prices.

During the year, petrol retailers had also seen substantial cost increases primarily reflecting crude oil costs and wholesale petrol costs while industry profitability had not increased despite petrol price increases.

Profitability levels more generally didn't appear to be higher in comparison to other industries.
The federal government has asked the ACCC to produce two more annual reports into petrol prices within the next two years.

ENDS

Back Expand Un-Read 0 Moderator Share

Reply By: Member - Bob C (NSW) - Monday, Dec 22, 2008 at 16:59

Monday, Dec 22, 2008 at 16:59

Hi Landy
Have been wondering why everyone seems to be skirting round the subject of diesel lately.To me it seems a bloody ripoff with the price around here about 30 to 35 cents litre above u l p.Wonder will the price decrease if the demend from the mining secton decreases
Cheers Bob

AnswerID: 340911

Reply By: On Patrol & TONI - Monday, Dec 22, 2008 at 17:00

Monday, Dec 22, 2008 at 17:00

Landy,
That holds no surprises for me!!!!!!!

Tax payers money well spent??????
Cheers Colin.

AnswerID: 340912

Reply By: Axel [ the real one ] - Monday, Dec 22, 2008 at 17:49

Monday, Dec 22, 2008 at 17:49

A load of goblydook designed to justify inaction of a toothless tiger ,and the sad part is that we as taxpayers pay for it ,and even worse is that some people believe it.

AnswerID: 340919

Follow Up By: Member - Paul Mac (VIC) - Monday, Dec 22, 2008 at 18:32

Monday, Dec 22, 2008 at 18:32

Oil price today hit US$33.17 a barrel and the A$ is around the .68cents. Now if I'm not mistaken last time oil was around that price we were paying around .70cents per litre at the bowsers. With inflation and increased profit taking we should therefore be paying at the most 85 - 90 cents a litre.

Like the ACCC are going to do anything to the oil companies. No one in the club would be prepared to blow the whistle. Seems the ACCC need someone to provide solid evidence to them before they will prosecute rather than look at the bleedin obvious.

However, on the positive side.........at least we are not still paying $1.55 a litre (unless you live in the rural areas).

FollowupID: 608566

Follow Up By: The Landy - Tuesday, Dec 23, 2008 at 10:18

Tuesday, Dec 23, 2008 at 10:18

The ACCC has had countless fuel inquiries and it is not surprising it has the findings it publishes. I’ve always maintained that on a daily basis it would be hard for you or me to distinguish whether the price should be 5 cents higher or lower at the pump and the reason for this is because of marketing discounts. We need to look at the average prices paid over time to determine whether we are paying a price that is reflective of international pricing; this is what the ACCC do and its findings have been published.

Many call it a toothless tiger that is in the oil companies pocket; the reality is this is nowhere near the truth. But it remains a cheap shot and the view will most likely prevail because its findings don’t usually meet the expectations of many and is beaten up by talk-back radio who are not usually renown for their grasp of the issues.

These comments are usually born out of ignorance of what the ACCC actually do, and have achieved. Just ask Richard Pratt and the packaging cartel that ACCC is currently prosecuting. Or Qantas, recently fined AU$ 20M for price fixing. Take some time to see what the ACCC has achieved; you may well form a different opinion. It certainly doesn't look like a toothless tiger...

The greater waste of taxpayers money occurs through the continual need for many to demand 'another' fuel inquiry.

Cheers

FollowupID: 608685

Reply By: Best Off Road - Monday, Dec 22, 2008 at 19:11

Monday, Dec 22, 2008 at 19:11

Petrol

1981 40 cents a litre
1992 70 cents
2002 90 cents
2008 $1.00

It's too cheap at the moment. Enjoy it while it is low, and the outlook is only a 5% increase in the next year.

And the arse has fallen out of LPG for those who are interested, 37.9 (without the shopper docket) today in Sunny Melbourne. And this is the time of year when LPG goes up due the the Northern winter. Could be looking at LPG under 30 cents by next winter.

Took on 120 litres of combined LPG and ULP this morning for $80 with the docket.

Oh, and our mortgage rates have dropped by 3% in the last 4 months.

It's wonderful to be alive.

Merry Christmas,

Jim.

AnswerID: 340932

Follow Up By: Member - Paul Mac (VIC) - Monday, Dec 22, 2008 at 21:09

Monday, Dec 22, 2008 at 21:09

Don't forget though Jim, the banks are holding onto in excess of 1% of what the Reserve tried to give us over the past 4 months also.

Christmas aint bad but it could be better.....lol

Cheers.

I purchased that alloy pole box I spoke to you about the other day mate for $350 with rubber seals, latch etc. so I was pretty happy.

Have a great Christmas and some good r&r up the bush.

FollowupID: 608598

Follow Up By: Best Off Road - Monday, Dec 22, 2008 at 21:21

Monday, Dec 22, 2008 at 21:21

Well Paul, Banks will be Banks.

You did VERY well with that box. Well under the odds.

Regards my friend,

Jim.

FollowupID: 608600

Reply By: Member - Hairs & Fysh (NSW) - Monday, Dec 22, 2008 at 21:49

Monday, Dec 22, 2008 at 21:49

Hi Landy,
As much as I respect your knowledge of these things, I can only wonder at how the wool is being pulled over our eyes.
Last night I watched ' I think it was a National Geographic program
MEGASTRUCTURE'' about an oil/processing rig in the Gulf of Mexico. I believe it's name was the 'here is the link'Genisus.
Sorry that I can't find the direct link to it.
Anyway, in the program, a bloke mention that it cost near on a Billion dollars. He also mentioned that it had paid for it self in it;s first few years. As much as the program was about the Structure and what a feat of engineering it is, they mentioned a few things that did not add up to what we've been told of late.
What I find interesting is that not one company owns this facility, but several Oil Campanies have a stake in it.
Ok, oil companies need money for capital works & to pay dividends to share holders, they raise that money through greater profits and showing potential share holders that they pay better dividends then their competitor. So it only makes sense that the higher the price paid at the pump the higher their profit.
There is also another factor in this ugly mess, and that is the tax that the Government rakes in from higher pump prices.
Now KRudd can play Santa Clause all he wants, But where does the majority of his cash come from? GST. And the big chunk of that is from Fuel sales.
Some times it is not hard to be cynical of the ways things are portrayed to us.

Last night I filled up in Grafton at around 7.30pm, At the BP, there was a Toll tanker parked in the drive. I put some $95 in the old girl. I went in to pay for it, the attendant asked how did I know that he has just received 25000 litres. I told him that I just happen to pop in to fill up. I questioned this, and he informs me he hadn't had diesel for two days.
Now I had thought that it was a Caltex refinery that had the problem. Go on, call me naive. Why has this effected all of SE Queensland & Northern NSW?

I'm sorry Landy, I find the ACCC findings, a better word for it would be 'Spin'.
Hasn't it been the the Oil Companies that bought the majority of the alternative energy ideas over the years? So in affect we are become a captive audience. We need it, they know we need it, they can have us pay what the want us to pay.
And Government are spineless to do anything about it because they are so reliant on the taxes that they receive from it.

AnswerID: 340965

Follow Up By: The Landy - Tuesday, Dec 23, 2008 at 09:42

Tuesday, Dec 23, 2008 at 09:42

Hi Jon, appreciate your comments.

There is no doubt that oil companies have involved themselves in alternative energy sources; I guess they need to diversify the revenue base away from a reliance on oil. After all many believe that oil is fast become a very finite resource. Tragically, the current oil price, whilst good for consumers, has been catastrophic for alternative energy providers.

….The ACCC has had countless inquiries and it is not surprising it has the findings it publishes. I’ve always maintained that on a daily basis it would be hard for you or me to distinguish whether the price should be 5 cents higher or lower at the pump and the reason for this is because of marketing discounts. Much the same as whether a BBQ chicken should be $1 higher or lower in a Coles or Woolworth’s store. We need to look at the average prices paid over time to determine whether we are paying a price that is reflective of international pricing; this is what the ACCC do and its findings have been published. Many call it a toothless tiger that is in the oil companies pocket; the reality is this is nowhere near the truth. But it remains a cheap shot and the view will most likely prevail because its findings don’t usually meet the expectations of many and is beaten up by talk-back radio.

I’m not a stalwart for the oil or refining companies, far from it (I want cheap fuel to!), but my concern is that if we don’t understand (accept) the real issues then it will follow that solutions, if there are any, will be wrong. After all politicians’ have a great knack of giving the public what they ask for, not necessarily what they need. FuelWatch was a great example of this.

With respect to the Caltex refinery in Brisbane, that refinery would cover SE Queensland and Northern NSW, a shortage there will affect fuel supplies to all retail outlets in this region, regardless of brand.

As a general comment and something that is food for thought – when we point the finger at oil producing nations and the price they have obtained in recent times we need to be careful as Australia has enjoyed immense prosperity on the back of coal prices approaching levels that were only dreamt about a few years ago. Consumers in Asian countries that require it for energy generation may well look at us with disdain and question why we should get paid so much for a fossil fuel that is simply dug out of the ground…….not to mention our iron ore!

Good luck and have a great Christmas

FollowupID: 608680

Follow Up By: Axel [ the real one ] - Tuesday, Dec 23, 2008 at 09:58

Tuesday, Dec 23, 2008 at 09:58

Landy your explainations really make me laugh , ever have a look at what we pay for gas and what we sell it to Asia for , they certainly dont look at us with disdain , they just laugh and call us "suckers".

FollowupID: 608683

Follow Up By: Best Off Road - Tuesday, Dec 23, 2008 at 10:35

Tuesday, Dec 23, 2008 at 10:35

Excellent summation Landy.

Really liked your reference to our commodities boom, from which we generated immense profit. Excellent examples of "supply and demand" and "market forces".

The conspiracy theorists and talk back radio hosts just don't understand basic economic prociples, or perhaps they don't want to.

Cheers,

Jim.

FollowupID: 608692

Follow Up By: Axel [ the real one ] - Tuesday, Dec 23, 2008 at 10:47

Tuesday, Dec 23, 2008 at 10:47

And so all products made by you are now cheaper due to lower fuel costs ?? pink pigs fly.........

FollowupID: 608698

Follow Up By: The Landy - Tuesday, Dec 23, 2008 at 11:02

Tuesday, Dec 23, 2008 at 11:02

Jim

We are indeed the "lucky" country.......we can fill our vehicles up, more cheaply than in other parts of the world, and without restriction travel this great country.

Cheers

FollowupID: 608704

Follow Up By: Best Off Road - Tuesday, Dec 23, 2008 at 11:43

Tuesday, Dec 23, 2008 at 11:43

Landy,

We were in Thailand 18 months ago and petrol was 28 baht (A$1.00) and in Aus at the time we were paying about $1.30.

I thought to myself, how do these poor bastards afford to run a car? They earn pittance wages (working in factories building Hi Luxes and Navaras etc), but still the roads are awash with cars. The majority are forced to ride scooters and that is just plain scary. Seeing four teenage boys crammed on a scooter, without helmets, riding home from school is very conecrning.

Still, these people have to alot a far greater portion of their income to fuel than we will ever have to. Any wonder they live off rice and live in shanties.

Fuel in Aus is not, and has never been, expensive relative to our income/living standard.

Cheers,

Jim.

FollowupID: 608713

Follow Up By: The Landy - Tuesday, Dec 23, 2008 at 12:25

Tuesday, Dec 23, 2008 at 12:25

Axel

The LNG supply contracts with China, valued at around AU$25bln, were struck when oil was US$25 per barrel back in 2003. It is easy to suggest with the benefit of hindsight that this was far too cheap when the price of oil went to US$150 per barrel. Wouldn’t we all like some of that golden stuff called – hindsight!

In contrast, the price on long-term supply contracts with Japan and other Asian countries have been renegotiated higher in recent times to reflect higher alternative energy costs.

LNG is set, in part, with reference to the underlying oil price and contracts entered into in recent times will reflect this. Don’t assume it is all being sold at a low price.

Cheers

FollowupID: 608721

Follow Up By: Axel [ the real one ] - Tuesday, Dec 23, 2008 at 13:10

Tuesday, Dec 23, 2008 at 13:10

And now Landy you will jump thru the hoop that the oil companies supply you with and tell us that the newer contracts for Lng set while oil was at $140+ per barrel will be honoured ,,, pink pigs still flying , the contract set in 03 worked out at approx .03c per kg when oil at $25 per barrel so according to what your masters tell you the higher contracts should be at .16c per kg [ oil at $140] ,,,, supply and demand and market forces ? , bovine droppings and you know it.

FollowupID: 608731

Follow Up By: The Landy - Tuesday, Dec 23, 2008 at 13:49

Tuesday, Dec 23, 2008 at 13:49

Hi Axel

I didn't suggest any supply contracts were set while the price was at US$ 140 per barrel, nor will I make hyperthetical assumptions based on future outcomes.

I supplied you with some facts as they stand today.

As I've said before, happy to sit down with you and have a beer and solve the problems of the world. To be honest though I have no idea where you are coming from as you throw so many angles 'on the run'.

You can keep throwing it back at me, or perhaps just for a change you might come up with a workable remedy.

How would you fix the 'fuel' price problem? Remembering opinions are like the dollar coin, not worth much.

I'm am genuinely interested because informed debate on fuel issues may lead to a better outcome for all...uninformed debate leads to poor outcomes.

Cheers, The Landy

FollowupID: 608741

Reply By: Member - John (Vic) - Tuesday, Dec 23, 2008 at 10:26

Tuesday, Dec 23, 2008 at 10:26

One other point that people seem to keep missing is that if Oil companies are making such huge profits they why is this not reflected in much higher declared profits and dividends??

Caltex in Australia are looking to once again declare a very large loss due to the difficulties of fluctuating exchange and crude prices.

Despite this topic being discussed on here many times and good factual information being provided the septics still think that the oil business is simple and that prices should change at the pump the instant that the price per barrel of crude drops.

Someone mentioned the tax take and GST specifically, maybe they need to consider that this is also affected as 10 percent of $1.50 is a lot more than 10 percent of $1.00.
The Federal tax take is taking a big hit also.