ACCC blames retailers for petrol price cycle

The Australian Competition and Consumer Commission has released its report into petrol price cycles in Australia, saying retailers are responsible for driving sharp increase in petrol prices across the market, followed by a subsequently slower decline in price.

Retailers repeat this cycle to maximise profits, and while it is not illegal, it leaves drivers frustrated, the consumer watchdog said.

“[T]he retailers’ use of price cycles to maximise profits really infuriates drivers as they can see no reason for them to exist,” ACCC commissioner Mick Keogh said.

“It’s not uncommon for drivers to notice prices jumping 20 cents or more in a very short period of time, and the price you see being charged on the way to work can be very different to the one on the way home.”

Since 2009, price cycles have become less predictable for consumers, forcing purchasing behaviours to change. In 2016, customers generally favored mid-week petrol purchases with a more even spread of buying behaviour across the week.

In 2009, however, the vast majority of purchases were made earlier in the week, with the established price-hike generally occurring on Thursday.

“The price cycles are hard to predict, meaning the cheap days come at irregular times,” Keogh said.

“Our advice [for consumers] is to stay active in the market… Don’t wait for your petrol gauge to get empty: if the cycle is at or near the bottom, buy petrol.”

The ACCC estimates that if all motorists took advantage of price-lulls, total yearly savings could reach around $260 million in Sydney, $220 million in Melbourne, $105 million in Brisbane and $75 million in Adelaide.

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Comments

2 comments

  1. Peter Buckingham posted on December 7, 2018

    Discounting Petrol has been going on for about 50 years, and was started by Ian Sykes and his small company IOC in Geelong. The large independent Greek dealers in Melbourne made an art of it in the '90's, as they moved from small dealer owned sites, to large branded sites with huge influence on the oil companies. "Internationally, Australia was known as the most price elastic market in the world - and the worst place for it was Melbourne"! Quote from the Chairman of MPSI in 1993 - the biggest fuel station modelling company in the world. Australia wants to have a free market - this is what we keep getting, combined with a pricing regime based on the Singapore wholesale prices. From a 20 year veteran manager for the largest oil company now. reply

  2. Mark McKenzie posted on December 7, 2018

    Maybe you should read this report more thoroughly - rather than taking a quote in the associated media release out of context. The report clearly states that consumers do better under petrol price cycles, which involve retailers selling at below cost for a period in the cycle due to intense competition. If retailers really controlled this market phenomenon - which is a business response to intense competition dynamic - then they are navigating their own demise by forcing themselves to sell below cost for substantial periods. reply

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