Petrol prices continue to skyrocket

Posted: 22 August 2018 10:32 am
News

A report shows drivers are paying on average 7% more than three months ago.

A fuel-monitoring report published by the Australian Competition and Consumer Commission (ACCC), shows petrol prices shot up by 7% on average over the last three months across Australia’s five largest urban centres.

Why are fuel costs rising?

The ACCC’s chair Rod Sims stated the rising prices came as a result of crude oil price hikes and a weaker Australian dollar to US dollar exchange rate. Sims also indicated the OPEC (Organisation of the Petroleum Exporting Countries) oil cartel had influenced domestic fuel prices through artificial production restrictions.

“The OPEC cartel in particular continues to have a damaging effect on Australian petrol prices. In late-2016 OPEC and some other crude oil producing countries agreed to cut production. This restricted supply into the market, which has clearly started to bite through steadily increasing petrol prices in the past financial year,” Sims divulged.

Retailers profit margins reach record-high

Further compounding the fuel hikes, retailers are pumping up their profit margins to record highs. In some cases, for every litre sold, 12.4 cents went to the fuel company as gross retail margins. Today, the everyday driver pays 4.3 cents per litre (cpl) more than 16 years ago when the ACCC started keeping tabs on fuel costs.

Brisbane drivers are getting slugged with the highest bills of the five major Australian cities (Sydney, Melbourne, Brisbane, Adelaide and Perth) and have done so for 18 of the last 24 months.

How can I save money on fuel?

First off, the ACCC boss told car owners to shop around for fuel. He also recommended using price comparison services and apps.

Let the fuel giants know you want lower prices by shopping around

“Cost of living pressures are high and petrol is a major purchase in weekly budgets. Motorists can manage this cost by using fuel price apps and websites to reward retailers offering the lowest price.”

- Rod Simms, ACCC Chair

Sims said that if more drivers ventured to cheaper forecourts to brim their tank, it would send a clear message to fuel retailing giants.

“If retailers know that price is the number one consideration for consumers when choosing where to buy their petrol, it gives them a very clear incentive to be as competitive as possible with their pricing.”

Another essential way motorists can cut costs is by understanding petrol price cycles.

“For example, in Sydney, if motorists had avoided buying E10 on the six days around the price cycle peaks in the previous six months, they would have paid on average around 2.7 cpl less,” Sims added.

Seven fuel-saving tips from Holden

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