Retail petrol prices reached a new 14-year high due to international factors despite a six-month fuel excise reducing petrol prices in the June 2022 quarter, the Australian Competition & Consumer Commission (ACCC) reported.
Record international prices for crude oil and refined petrol were due to increased demand, production cuts by Russia and the OPEC cartel, and war in Ukraine.
The report shows that June quarter average retail petrol prices in the five largest capital cities were 188.0 cents per litre (cpl), up by 6.1 cpl from the March quarter. This was the sixth consecutive quarter in which prices increased. In real terms, prices in the June quarter were the highest since the September quarter in 2008 (when average prices in 2021-22 dollars were 206.9 cpl).
Retail prices then fell by about 35 cpl in July as international crude oil and refined petrol prices declined due to an increase in supply from oil stockpiles, lockdowns in parts of China and a worsening global economic outlook.
“Motorists experienced savings because of the fuel excise cut at a time of record and rising wholesale prices,” said ACCC Chair, Gina Cass-Gottlieb.
“The excise cut prevented even higher prices due to international factors, largely driven by the war in Ukraine.
“Since late June, average retail petrol prices have come down a lot, in line with decreases in international crude oil and refined petrol prices.”
The full fuel excise will be reinstated from 29 September 2022, according to the ACCC, translating to an extra 25.3 cpl in taxes. This is made up of an increase in fuel excise of 23.0 cpl, which includes an increase of 0.9 cpl following automatic fuel excise indexation in August, and the associated GST. Wholesalers are expected to pass on this increase to retailers in full, from this date.
Following the excise reintroduction, the ACCC said it will be monitoring wholesale and retail prices closely and will not hesitate to take action if retailers make misleading statements on price movements or if there is evidence of anti-competitive behaviour (such as price collusion).
“We will shortly be engaging with fuel wholesalers and retailers to say that we do not expect to see uncharacteristic or abnormal wholesale and retail price increases in the days leading up to, and on the day of, or after, the reintroduction of the full rate of fuel excise,” said Cass-Gottlieb.
“Motorists are reminded that prices will continue to fluctuate with changes in international prices and the exchange rate, as well as petrol price cycles in the five major capital cities. Our monitoring and analysis will assess and report on all factors influencing retail prices. The ACCC will continue its weekly reporting to consumers about what is happening to fuel prices and when to find the cheapest fuel.
“Shopping around and using fuel price apps can help consumers find the cheapest petrol in their area. Our previous research has shown that buying at independent retailers and avoiding the top of the petrol price cycle in the five largest capital cities can save motorists a lot of money.”
The ACCC will closely monitor daily average fuel prices to assess the increases in wholesale and retail prices. It can compel refiners, importers, terminal operators, wholesalers and retailers to provide information relating to fuel prices when necessary. It will also monitor the margins of fuel retailers.
“Petrol stations must not make false and misleading statements to consumers about the reasons for any price increases. We will not hesitate to name retailers should this happen and the ACCC can take appropriate enforcement action,” said Cass-Gottlieb.
The ACCC uses a seven-day rolling average basis to analyse movements in daily retail petrol prices. A seven-day rolling average price is the average of the current day’s price and prices on the six previous days.
On 16 December 2019, the Treasurer issued a new direction to the ACCC to monitor the prices, costs and profits relating to the supply of petroleum products in the petroleum industry in Australia and produce a report every quarter. The ACCC monitors retail prices in all capital cities and over 190 regional locations across Australia. This is the 11th quarterly petrol monitoring report under the new direction.
In March 2022, the then Australian Government introduced a six-month fuel excise cut to apply from 30 March to 28 September 2022. It reduced the overall tax paid by 24.3 cpl, being a 22.1 cpl fuel excise cut plus associated GST.
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