Fuel price scrutiny

Latrobe Valley motorists have cautiously welcomed news Australia’s consumer watchdog would apply a greater level of scrutiny to fuel prices, but have remained firm they want results.

The disparity between metropolitan and regional fuel prices has attracted renewed attention since the wholesale price began dropping in October, with savings soon passed on to city consumers but not their country counterparts.

In December, Federal Small Business Minister Bruce Billson directed the Australian Competition and Consumer Commission to monitor and analyse fuel markets in a more regular and in-depth way.

ACCC chair Rod Sims announced on Thursday the commission would produce at least eight reports with a minimum four market studies, looking at issues in “considerable depth”, including price drivers of petrol in three regional markets.

“The studies will look at the cost of fuel in the nearest port, transport and storage costs, as well as wholesale, distribution, and retail costs to fully explain prices and where money is being made in the petrol price value chain,” Mr Sims said.

Facebook page ‘Latrobe Valley fuel price rip-off’ began in November, when prices were about $1.46 per litre in Morwell, Moe and Traralgon.

A spokesperson for the group, which posts photos of station’s prices across Gippsland, said members were not confident the studies would make a difference.

“Speaking on behalf of our 1600 followers, nearly all the response we’ve had… is they don’t have any faith or trust that (the ACCC) will be able to do something,” the spokesperson said.

“We’ve all contacted them before and they can’t or won’t do anything about it.

“It’s a good start. We’ll wait and see if they actually do anything about it.”

The RACV has been lobbying for fairer fuel prices and supported the ACCC’s announcement.

RACV vehicle engineering manager Michael Case said it was clear prices in some parts of regional Victoria were too high.

Mr Case said it was difficult to say exactly what the price in each town should be, but the costs of supply and transport – often touted as the reason for the regional and metropolitan disparity – only contributed between one and four cents to the price difference.

“We know there will be a delay in regional centres because (companies) sell fuel that they’ve already bought at the price they’ve had… but it’s taken too long for prices to come down and they haven’t come down as much as they should have, given the fuel reduction in metropolitan locations,” Mr Case said.

“Some centres have gone down and others haven’t… some centres have not reduced their prices by as much as they should have.

“There is up to about to 25 cents difference across regional centres. Motorists in those higher-cost centres are being ripped off.”

Up until recently, this included the Valley, where motorists were paying about 146 cents per litre in early December, while city motorists paid about 125 cents.

Location matters

Although prices have dropped in the Valley recently, motorists are still puzzled and angered by the difference in prices in Morwell, Moe and Traralgon.

In Friday fuel varied between 109.9 cents and 117.9 cents in Moe, with motorists paying as low as 112.9 in Traralgon and as high as 114.9 in Morwell.

The ‘Latrobe Valley fuel price rip-off’ spokesperson said they could not understand the difference, but had been told the fact the highway by-passed Morwell and not Traralgon played a role in Traralgon’s traditionally lower prices.

“We’ve noticed even between the petrol stations at Mid Valley and the United (Petroleum) between Morwell and Traralgon up to 14 cents a litre difference,” the spokesperson said.

“They’re saying there’s not enough competition in Morwell, other times it’s too much competition. We just keep getting the run around.

“We’re not asking petrol companies not to make a profit all we ask is that the prices being charged are reasonable.”

United Petroleum declined to comment, as their chief executive was on leave.

BP said it would not comment on fuel prices, but said BP has supported the ACCC’s fuel price monitoring program since annual reporting commenced in 2008.

“The ACCC’s reports are well-documented and thorough, and play an important role in informing consumers about the influence of international prices, exchange rates and logistics on retail petrol price movements,” a BP spokesperson said.