Source: Australian Ministers for Regional Development
Retail petrol and diesel prices continued to climb in the week to 25 March as international refined petrol and diesel benchmark prices rose further, but diesel price increases at both the wholesale and retail levels are outpacing petrol prices, the ACCC’s weekly fuel price monitoring update shows.
Across Australia’s five largest cities, daily average retail diesel prices on 25 March were 303.5 cents per litre (cpl), an increase of 27.8 cpl (10 per cent) from the previous week.
In comparison, average retail prices on 25 March for regular unleaded petrol across the five largest cities were 252.2 cpl, an increase of 18.1 cpl (8 per cent) from the previous week.
On 25 March, daily average retail diesel prices across the more than 190 regional locations the ACCC monitors were 307.6 cpl, an increase of 28.6 cpl (10 per cent) from the previous week.
These price increases are on the back of movements in international benchmark prices. The international benchmark price for diesel (Singapore Gasoil 10 ppm) increased by about 17 per cent from the previous week, whereas the international benchmark price for refined petrol (Singapore Mogas 95) increased by about 9 per cent.
“We’re continuing to watch the fuel market very closely and are engaging with the fuel industry, Government, state and territory regulators and consumers through this very volatile period,” ACCC Deputy Chair Mick Keogh said.
“We remain concerned about supply issues for both petrol and diesel impacting a range of locations, including capital city suburbs, regional towns and remote areas. Last week we granted urgent interim authorisation, with conditions, to the Australian Institute of Petroleum and its current members to coordinate as needed to manage supply chain issues.”
“Having already granted urgent interim authorisation, we this week commenced consultation on the Australian Institute of Petroleum’s 12-month authorisation application,” Mr Keogh said.
“Many consumers have contacted us about petrol and diesel prices over the last few weeks and we are assessing those reports. Any potential breaches of our competition and consumer laws will be prioritised and taken very seriously.”
Retail prices in the capital cities
On 25 March, Hobart had the highest daily average retail petrol prices among Australia’s eight capital cities (257.2 cpl), and Brisbane had the lowest (250.3 cpl). From the previous week, Hobart experienced the largest increase in average prices (22.0 cpl).
On 25 March, Canberra had the highest daily average retail diesel prices among the eight cities (306.0 cpl), and Perth had the lowest (300.3 cpl). From the previous week, Brisbane experienced the largest increase in average prices (29.1 cpl).
Daily average retail regular unleaded petrol prices – cents per litre
Source: ACCC calculations based on data from Informed Sources.
Daily average retail regular diesel prices – cents per litre
Source: ACCC calculations based on data from Informed Sources.
International crude oil and refined fuel benchmark prices
International crude oil and refined fuel benchmark prices were volatile in the week to 25 March, with both daily price increases and decreases.
Singapore Mogas 95 was around 138 cpl (Australian) in the week to 25 March, an increase of about 11 cpl from the previous week.
Singapore Gasoil 10 ppm was around 193 cpl (Australian) in the week to 25 March, an increase of about 28 cpl from the previous week.
Weekly average international crude oil and refined fuel benchmark prices
Source: ACCC calculations based on data from Argus Media.
Consumer reports to the ACCC
Between 1 and 24 March the ACCC received over 3,000 reports from consumers and small businesses about fuel prices. Fuel related contacts made up nearly one-third of all contacts to the ACCC in March, with reports peaking in the second week of March.
Reports have raised a variety of issues, including multiple price rises in the same day in some jurisdictions, large jumps in fuel prices overnight, and some service stations either setting volume limits on fuel or running out of fuel completely.
Note to editors
The international benchmark price for refined fuel is the largest component of retail fuel prices. The international benchmark for Australian retail petrol prices is Singapore Mogas 95 (Mogas 95). The international benchmark for Australian retail diesel prices is Singapore Gasoil 10 with 10 parts per million sulphur content (Gasoil 10 ppm).
Both petrol and diesel are refined from crude oil and their prices generally tend to follow similar movements over the long term. However, the different fuels have their own supply and demand characteristics (for example, compared with petrol, diesel also has remote energy generation and industrial uses) and the different refined fuels have their own international benchmark prices. It is these benchmarks that drive retail diesel and retail petrol prices.
Australian retail fuel prices are largely determined by movements in international benchmark refined fuel prices (which are driven by international crude oil prices), and the AUD-USD exchange rate. International benchmark prices movements drive domestic wholesale prices, which then influence retail fuel prices.
Additionally, in the five largest capital cities (Sydney, Melbourne, Brisbane, Adelaide and Perth), retail petrol prices have typically moved up and down in regular patterns, known as petrol price cycles. The ACCC website has more information on these price cycles. Retail diesel prices do not move in cycles.
‘Terminal gate’ or wholesale prices are prices that wholesalers charge for petrol and diesel in the spot market. The major wholesalers post these prices on their websites on a regular basis. Although few wholesale transactions occur at terminal gate prices and actual costs can vary across brands and cities, they are typically indicative of average wholesale prices. Terminal gate prices are indicative of the wholesale price of petrol and diesel only, and exclude transport and other retail operating costs. The ACCC recently heard from market participants that some transactions have been quite different to published terminal gate prices.
Background
The ACCC is an independent statutory government authority and Australia’s peak consumer protection and competition agency.
The ACCC uses a range of tools to promote compliance with the Competition and Consumer Act 2010 and the Australian Consumer Law.