Latest market update from RACT's Darren Moody
The wholesale price of fuel has dropped in recent weeks, down about 7cpl over the last two weeks, however we haven’t really seen any relief at the pump for motorists.
At present it appears the average margin for ULP is between 11 and 14cpl depending on where you live and buy your fuel, which is in our view too high.
Of more concern is the price of diesel. Currently the wholesale price of diesel is 7.6cpl lower than ULP, but at best the pump price is the same as ULP. This means that some outlets are getting a margin in excess of 20cpl, which is pure price gouging in our opinion.
Labor agrees to fuel excise increase
Having previously told Tasmania the Federal Government should give us a break on high fuel prices by dropping fuel taxes, Labor has agreed to an increase on the excise equating to around 40 cents a tank.
At this year's Agfest, Opposition leader Bill Shorten suggested Prime Minister Tony Abbott had the power to relieve Tassie of the burden of expensive fuel.
Now, Shadow Infrastructure Minister Anthony Albanese explains the party will wave through a tax hike in exchange for an extra 1-billion-dollars spent on upgrading regional roads.
“Most of this injection of investment, $1.1 billion will go to job creation directly in local communities, according to the priorities that are set by those local communities.”
RACT's latest response
While Tasmanians didn’t see the lows of the mainland when the average price got as low as $1.10 per litre, the Tasmanian average got as low as $1.21 per litre and we have seen an around a 20 per cent increase since that time in mid-January. On this basis Tasmanians using an average of 50 litres per week would need to find an extra $12 per week for fuel now compared to the start of the year.
What we have seen in the last month or so is the price gap between the mainland capitals and Hobart close significantly from highs of over 20 cent per litre. Whether that is market forces related or can be attributed to the ACCC inquiry announcement isn’t clear, but it is a small positive for Tasmanian motorists, and we are still paying around 18 cents per litre less than we were paying this time last year.
On the downside, the lower Australian dollar and a steady increase in the Singapore benchmark price is going to see a steady increase at the bowser over the short term at least.
Fuel prices set to increase nationwide
It seems that our campaign for fairer fuel prices is about to come up against some even tougher odds, after the latest market research report from CommSec revealed that petrol is about to see its biggest quarterly price hike in almost 25 years.
As of this week, mainland motorists are paying an average of $1.42 per litre of fuel compared to less than $1.10 at the start of the year.
This will result in us forking out up to an extra $21 to fill the average sedan.
CommSec chief economist Craig James believes that the added financial pressure on families will depend on how they have adjusted their budgets to the lower petrol prices.
“Petrol is the single biggest weekly purchase for most families.”
So far over the past three months, CommSec estimates the price of petrol has increased by 13.1 per cent and its continual rise will result in the largest quarterly increase since December 1990.
At this point, petrol is still cheaper than it was a year ago despite the price increasing by around 30 per cent.
So what does the price hike mean for Tasmanians?
According to CommSec, higher petrol prices and a weaker Australian dollar will likely make people more restrained with their spending, while the affect on the economy across the country could even mean an interest rate cut by the Reserve Bank of Australia.
Tasmania’s Labor leader Bryan Green speaks with John Fabris
Tasmania’s Labor leader Bryan Green speaks with John Fabris. Bryan Green shares is opinion on what changes Liberal should be introduces. Does Bill Shorten have any intent on following through on his actions spoken at Agfest 2015.
RACT's response to the ACCC investigation
ACCC announced on May 8 that Launceston would be the site of its second regional petrol market study.
The deep-dive regional market study aims to investigate and explain each component of the petrol prices paid at the pump to understand why Launceston has experienced some of the highest petrol prices at the pump over the last few years.
In 2013 -14 Launceston experienced an average fuel price some 12cpl higher than the five largest capital cities, and this differential has doubled since 2009-10
The ACCC will be looking to see what the market drivers are at a local level, and hope to shed some light on a range of petrol pricing issues across Tasmania.
Companies throughout the supply chain will be required to provide information to the ACCC under the compulsory information gathering powers it has under section 95ZK of the Competition and Consumer Act.
RACT would hope the enquiry uncovers:
What is the true cost of getting fuel to Tasmania?
Who actually owns fuel sites?
Does any particular retailer have market dominance?
What affect are the supermarket and oil company dominance having on independents?
Is there an over-supply of sites in Launceston?
Is there any illegal activity happening?
Are there any barriers to new entrants in the marketplace?
Is the price difference between standard and premium fuels justified/appropriate
The ACCC has indicated it should have the report finalised and published by December this year.