Report on the Australian petroleum market - accc.gov.au on the Australian... · with BP’s premium pricing strategy was likely to have a substantial impact on the competitive

accc.gov.au

Report on the Australian petroleum marketDecember quarter 2017

February 2018

ISBN 978 1 920702 25 0

Australian Competition and Consumer Commission 23 Marcus Clarke Street, Canberra, Australian Capital Territory, 2601

© Commonwealth of Australia 2018

This work is copyright. In addition to any use permitted under the Copyright Act 1968, all material contained within this work is provided under a Creative Commons Attribution 3.0 Australia licence, with the exception of:• the Commonwealth Coat of Arms• the ACCC and AER logos• any illustration, diagram, photograph or graphic over which the Australian Competition and Consumer Commission does not hold

copyright, but which may be part of or contained within this publication.

The details of the relevant licence conditions are available on the Creative Commons website, as is the full legal code for the CC BY 3.0 AU licence.

Requests and inquiries concerning reproduction and rights should be addressed to the Director, Content and Digital Services, ACCC, GPO Box 3131, Canberra ACT 2601.

Important notice

The information in this publication is for general guidance only. It does not constitute legal or other professional advice, and should not be relied on as a statement of the law in any jurisdiction. Because it is intended only as a general guide, it may contain generalisations. You should obtain professional advice if you have any specific concern.

The ACCC has made every reasonable effort to provide current and accurate information, but it does not make any guarantees regarding the accuracy, currency or completeness of that information.

Parties who wish to republish or otherwise use the information in this publication must check this information for currency and accuracy prior to publication. This should be done prior to each publication edition, as ACCC guidance and relevant transitional legislation frequently change. Any queries parties have should be addressed to the Director, Content and Digital Services, ACCC, GPO Box 3131, Canberra ACT 2601.

ACCC 11/17_1354

www.accc.gov.au

http://www.accc.gov.au

Contents

Key messages 1

1 Developments in the petroleum industry 7

1.1 A new monitoring direction was given to the ACCC 7

1.2 OPEC agreed to further extend crude oil production cuts 7

1.3 The NSW Government introduced a FuelCheck app 7

1.4 The Northern Territory fuel price reporting and price board arrangements commenced 8

1.5 Price board arrangements in Tasmania 8

1.6 IPART released a report on the ethanol market in NSW 9

1.7 RACQ introduced a discount scheme for its members with Puma Energy 9

1.8 BP introduced a new way to pay for fuel 9

1.9 Viva Energy opened Australia’s largest crude oil tank at the Geelong Refinery 10

1.10 Caltex upgraded its Newport terminal 10

2 ACCC Activities 11

2.1 ACCC and the petrol industry 11

2.2 Activities during the December quarter 2017 11

3 Retail petrol price movements in the capital cities 13

3.1 Retail prices over the year to December 2017 13

3.2 Retail prices compared with Mogas 95 prices 14

3.3 Gross indicative retail differences 14

3.4 Retail prices in Brisbane were the highest among the five largest cities 17

3.5 Price cycles in the five largest cities 18

3.6 Prices in the three smaller capital cities 18

3.7 Retail prices of the different petrol grades 20

3.8 Petrol prices in Australia and other OECD countries 20

4 Retail petrol price movements in regional locations 23

4.1 Influences on regional petrol prices 23

4.2 Regional petrol prices in aggregate 23

4.3 Prices in each of the states and the Northern Territory 24

5 International price movements 28

5.1 Crude oil and refined petrol 28

5.2 AUD–USD exchange rate 30

6 Diesel and LPG prices 32

6.1 Diesel price movements 32

6.2 LPG price movements 32

Appendix A—Petrol price data for monitored locations 34

Appendix B—Update on regional market studies 39

1 Quarterly report on the Australian petroleum industry—December 2017

Key messagesThe ACCC received a new petrol monitoring directionOn 20 December 2017, the Treasurer issued a new direction to the ACCC to monitor the prices, costs and profits relating to the supply of petroleum products and related services in the petroleum industry in Australia.

Under the direction, the ACCC will produce reports at least quarterly that will focus on particular aspects of the fuel market of consumer interest in relation to prices, costs and profits. These will include regular quarterly reports on movements in prices in the capital cities and regional locations across Australia (of which this is the first report under the new direction) and industry reports on specific topics.

The ACCC’s role is to promote effective competition and informed consumers in petrol markets, so that resources are used efficiently and markets work in the interests of consumers. High prices and margins do not necessarily indicate a breach of the Act. Without anti-competitive agreements or misuse of market power, ‘profiteering’ or ‘price gouging’ is not illegal. The ACCC does not set prices or profit margins in petrol markets, and it is not able to restructure petrol markets or make them operate more efficiently.

The ACCC monitors the petrol industry in Australia to inform consumers about developments in the market, and to provide information about when and where to buy petrol. The ACCC website includes historical data on petrol price cycles in the larger capital cities and provides advice on the best time to buy petrol.

The ACCC opposed BP’s proposed acquisition of Woolworths’ network of retail service stationsOn 14 December 2017, the ACCC announced its decision to oppose the proposed acquisition of Woolworths’ network of retail service stations by BP. The ACCC considers that the acquisition would be likely to substantially lessen competition in the retail supply of fuel. Woolworths is a vigorous and effective competitor which has an important influence on fuel prices and the price cycle in many markets across Australia.

ACCC analysis found that BP prices are significantly higher on average than Woolworths prices in the major capital cities. For example, average retail prices at BP-priced retail sites in Brisbane and Sydney were around 3.0 cents per litre (cpl) higher than average retail prices at Woolworths retail sites.

Considering the scale of the Woolworths network across Australia, the ACCC was concerned that the removal of Woolworths’ vigorous pricing strategy from the market and its replacement with BP’s premium pricing strategy was likely to have a substantial impact on the competitive process, reducing the competitive constraint on remaining market participants.

Average retail petrol prices in the five largest cities increased substantially in the December quarter 2017In the December quarter 2017 average retail petrol prices across the five largest cities (i.e. Sydney, Melbourne, Brisbane, Adelaide and Perth) were 135.1 cpl, an increase of 12.6 cpl from the September quarter 2017.1 This followed a decrease of 2.7 cpl in the September quarter 2017. This is the highest quarterly average price for two and a half years, since the June quarter 2015 (135.8 cpl).

1 In this report references to petrol are to regular unleaded petrol (RULP) unless otherwise specified. From 1 July 2014 the ACCC has used E10 prices instead of RULP prices for Sydney in the average price for the five largest cities.


On a monthly average basis, retail petrol prices in the five largest cities increased by 20.3 cpl between July 2017 and December 2017.

There were three factors contributing to the high retail prices in the December quarter: higher international crude oil and refined petrol prices, a lower AUD-USD exchange rate and likely higher profits as indicated by high gross indicative retail differences (GIRDs). Around two-thirds of the increase in retail prices in the quarter was due to higher international refined petrol prices and a lower AUD–USD exchange rate.

International crude oil and refined petrol prices were higher in the quarter and their influence on retail prices was reinforced by a lower AUD–USD exchange rateInternational crude oil and refined petrol prices increased in the December quarter 2017. Quarterly average Brent crude oil prices increased by around USD 9 per barrel to around USD 61 per barrel and average Mogas 95 prices (the benchmark price of refined petrol relevant to Australia) increased by around USD 7 per barrel to around USD 74 per barrel. Brent crude oil and Mogas 95 prices also increased in the September quarter 2017.

The AUD–USD exchange rate decreased by around USD 0.02 in the December quarter 2017. The AUD–USD exchange rate is a significant determinant of Australia’s retail petrol prices because international refined petrol is bought and sold in United States dollars in global markets. The lower AUD–USD exchange rate compounded the influence of the increase in international refined petrol prices on Australian retail petrol prices.

The OPEC cartel extended cuts in crude oil productionThe increase in crude oil prices in the December quarter 2017 was influenced by high demand and crude oil production cuts by the Organisation of Petroleum Exporting Countries (OPEC).

OPEC agreed in November 2016 to cut crude oil production by about 1.2 million barrels per day (bpd). In December 2016, eleven non–OPEC members (including Russia) joined the agreement, bringing the total supply reduction to about 1.8 million bpd. The cuts were intended to last six months from 1 January 2017, but in May 2017 they were extended by nine months to March 2018.

On 30 November 2017, OPEC and the non-OPEC members announced an extension of the production cuts to December 2018, with an option to review the arrangements in June 2018 and adjust the agreement based on market conditions.

Gross retail margins increased significantly in the quarter to their highest level since the ACCC began monitoring themIn the December quarter 2017 average GIRDs in the five largest cities were 14.2 cpl, an increase of 3.9 cpl from the previous quarter. These are the highest quarterly average GIRDs on record in real terms since the ACCC began monitoring them in the September quarter 2002.

GIRDs are a broad indicator of retail margins. They are calculated by subtracting average wholesale prices (or terminal gate prices (TGPs)) from average retail prices. TGPs are the prices at which petrol can be purchased from wholesalers in the spot market and are posted on a regular basis on the websites of the major wholesalers.

TGPs vary across brands and cities. TGPs reflect the wholesale price of petrol only, and exclude other retail operating costs (such as branding, transportation, and labour). As they do not include costs, GIRDs should not be confused with actual retail profits.


Annual average gross retail margins in 2017 were also the highest on recordAnnual average GIRDs in the five largest cities in calendar year 2017 were 12.2 cpl, an increase of 1.6 cpl from 2016 (10.6 cpl). In real terms they remain the highest on record and are currently 4.2 cpl higher than the average over the last 15 years (8.0 cpl). This is shown in the chart below.

Annual average petrol GIRDs in the five largest cities in real terms: 2003 to 2017

cpl

4

5

6

7

8

9

10

11

12

13

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Period avg: 8.0 cpl

Source: ACCC calculations based on data from the companies monitored by the ACCC, FUELtrac, Informed Sources, WA FuelWatch and Australian Bureau of Statistics, 6401.0 - Consumer Price Index, Australia, Dec 2017, Tables 1 and 2. CPI: All Groups, Index Numbers and Percentage Changes, at http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6401.0Dec%202017?OpenDocument.

Note: The base year is 2017.

Some retailers and industry organisations have advised the ACCC that the increase in GIRDs in recent years may partly reflect increased regulatory and compliance costs, especially in NSW and Queensland. Although many of these costs may have been one-off expenses, they may need to be recouped over a number of years. The ACCC recognises that increased costs may be a partial explanation for the increasing divergence between retail prices and TGPs. However, the ACCC has not received sufficient information from retailers on a consistent basis to quantify this, and considers that the high GIRDs after 2014 cannot be fully explained by cost increases.

Another possible reason for the higher GIRDs in recent years is that some retailers are setting their prices higher relative to market average TGPs than they may have done in the past. This is over and above any price increases that have occurred due to higher international refined petrol prices. For example, the ACCC is aware that this has occurred at Coles Express retail sites in recent years. This could be encouraging other retailers to follow Coles Express and also increase their prices, leading to higher average industry margins.

The GIRDs reported by the ACCC are averages across the five largest cities over time. The level of prices, costs and profits vary significantly between retail operations and not all petrol retailing sites will be achieving such high margins.

The ACCC intends to address this issue further during the current monitoring direction.

http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6401.0Dec%202017?OpenDocument



Brisbane retail petrol prices remain the highest among the five largest citiesIn the December quarter 2017 average retail prices in Brisbane were 138.5 cpl, which was 4.3 cpl higher than the average across the other four largest cities (i.e. Sydney, Melbourne, Adelaide and Perth). This was 1.6 cpl higher than the differential in the September quarter and 1.0 cpl higher than the average between 2009–10 and 2016–17.

The ACCC released the findings of its report on the Brisbane petrol market on 9 October 2017. It noted that petrol prices in Brisbane have been significantly higher than those in the other four largest cities for the last eight years. Between 2009–10 and 2016–17, Brisbane motorists paid on average 3.3 cpl more for petrol than motorists in the other four largest cities.

The report found that the main factor influencing the higher prices in Brisbane is higher retail margins on petrol, which have contributed to profits in Brisbane being significantly higher than the average across Australia. The cost to motorists in Brisbane of higher petrol prices has been significant, at around $50 million per annum.

The report also found that retail pricing is less competitive in Brisbane, with retailers setting prices higher at the top and bottom of the price cycle than retailers in Sydney. Furthermore, Brisbane has fewer retail chains which price competitively and aggressively. Brisbane has only four retailers in this category (7-Eleven, Woolworths, Puma Energy and United), while Sydney has seven (Speedway, Metro, Budget, Westside, United, 7-Eleven and Woolworths).

More state and territory governments introduced measures to increase fuel price transparency

New South WalesIn August 2016, the NSW Government launched FuelCheck, an online tool which provides consumers with real–time fuel price information covering every retail site across NSW.

On 11 October 2017, the NSW Government launched the FuelCheck app. It includes all of the website functions of FuelCheck along with the following features: a ‘favourite stations’ function (which allows users to save their favourite petrol stations); a ‘my trip’ function (which enables users to find the cheapest petrol station on their journey and direct them to the station); and a ‘trends’ page (which shows the cheapest day of the week to fill up and the day’s price range).

On 22 December 2017, the NSW Minister for Finance, Victor Dominello, commented that more than 84 000 people had downloaded the FuelCheck app since its launch and the FuelCheck website had received over 3.3 million visits since it commenced in August 2016.

Northern TerritoryOn 1 November 2017, the MyFuel NT scheme commenced in the Northern Territory. MyFuel NT is a territory-wide real-time mandatory retail fuel price-reporting scheme (identical to the NSW FuelCheck scheme). The scheme gives consumers access (via website or mobile app) to live data from every fuel retailer in the NT.

Since the introduction of MyFuel NT retail prices in Darwin have been relatively high. Between mid-December 2017 and 31 January 2018, average daily retail prices in Darwin were unchanged at around 149.0 cpl. Consumers can use the MyFuel NT scheme to identify the highest and lowest priced retail sites in Darwin and buy petrol at the lower priced sites. For example, on 13 February 2018, Coles Express had the highest priced retail sites (at 149.9 cpl) and FuelXpress Winnellie had the lowest (at 137.5 cpl). There were also five United retail sites at 144.7 cpl.


These add to the number of fuel price transparency schemesThe new FuelCheck app and the MyFuel NT app and website join existing fuel price transparency schemes, including the MotorMouth website and app, apps operated by GasBuddy, the NRMA, 7-Eleven and Woolworths, and the WA FuelWatch and NSW FuelCheck websites.

Readily available information about current retail petrol prices enables motorists to shop around and purchase petrol at relatively lower priced retail sites. Not only do motorists benefit from those lower prices, but the availability of petrol price data may promote competitive market behaviour. It will reward those retailers that are prepared to actively compete on price, because their pricing behaviour can be seen, and acted upon, by motorists.

The city–country price differential decreasedThe ACCC monitors fuel prices in all capital cities and over 190 regional locations across Australia. The average differential between regional prices and prices in the five largest cities in the December quarter 2017 was 1.4 cpl, 5.2 cpl lower than in the September quarter 2017 (6.6 cpl). In 2017 the annual average differential was 5.0 cpl.

While retail petrol prices in regional locations generally follow movements in the international price of refined petrol, they often do not respond as quickly—either up or down—as prices in the five largest cities. Between July 2017 and December 2017 monthly average retail prices in the five largest cities increased by 20.3 cpl, while prices in regional locations increased by only 11.8 cpl.

Diesel and automotive LPG prices increasedAverage retail diesel prices in the five largest cities increased in the December quarter 2017 to 133.8 cpl, an increase of 7.5 cpl from the September quarter (126.3 cpl).

Average retail LPG prices in the five largest cities also increased in the December quarter 2017 to 82.2 cpl, an increase of 10.0 cpl from the September quarter (72.2 cpl).

ACCC regional market studiesThe ACCC has undertaken four regional petrol market studies—in Darwin, Launceston, Armidale and Cairns—and continues to monitor prices and GIRDs in those locations.

The ACCC has compared actual retail prices in Darwin, Launceston, Armidale and Cairns with estimated retail prices calculated on a long–term competitive cost basis. This calculation reflects the fact that costs (such as freight and operating costs per litre) are higher in these locations, and assumes that retail margins in these locations should be broadly similar to long–term average retail margins in the five largest cities.

This long-term competitive cost-based price provides a benchmark against which to compare current price levels. It is not static and will change as its underlying elements change over time. If retail prices are constantly above this benchmark price for a sustained period, this may be indicative of a less competitive market in which retailers are earning higher margins at the expense of consumers.

The December quarter data shows that retail prices in Launceston and Cairns are significantly higher than a long-term competitive cost-based benchmark suggests they should be. Retail prices in Armidale are moderately above a benchmark price and retail prices in Darwin are marginally above a benchmark price. Motorists in these locations are encouraged to use the available fuel price apps to find retailers with relatively lower prices.


Darwin petrol prices increased and are marginally above a long-term competitive cost-based priceIn the December quarter 2017 average retail petrol prices in Darwin were 140.0 cpl, an increase of 11.5 cpl from the September quarter 2017 (128.5 cpl). The average differential between prices in Darwin and the five largest cities was 4.9 cpl, a decrease of 1.1 cpl from the September quarter 2017 (6.0 cpl).

In the December quarter 2017 average GIRDS in Darwin were 14.5 cpl, an increase of 2.8 cpl from the September quarter 2017 (11.7 cpl). Petrol prices in Darwin were marginally above a long-term competitive cost-based price.

Launceston petrol prices increased and remain above a long-term competitive cost-based priceIn the December quarter 2017 average retail petrol prices in Launceston were 143.3 cpl, an increase of 5.1 cpl from the September quarter 2017 (138.2 cpl). The average differential between prices in Launceston and the five largest cities was 8.2 cpl, a significant decrease from the September quarter 2017 (15.7 cpl).

In the December quarter 2017 average GIRDs in Launceston were 16.8 cpl, a decrease of 3.8 cpl from the September quarter 2017 (20.6 cpl). Petrol prices remain significantly above a long-term competitive cost-based price.

Armidale petrol prices increased and remain above a long-term competitive cost-based priceIn the December quarter 2017 average retail petrol prices in Armidale were 135.2 cpl, an increase of 10.7 cpl from the September quarter 2017 (124.5 cpl). The average differential between prices in Armidale and the five largest cities was 0.1 cpl, which was the lowest differential since the June quarter 2016 (-0.3 cpl).

In the December quarter 2017 average GIRDs in Armidale were 15.3 cpl, an increase of 2.2 cpl from the September quarter 2017 (13.1 cpl). Petrol prices in Armidale remain above a long-term competitive cost-based price.

Cairns petrol prices decreased marginally but remain above a long-term competitive cost-based price In the December quarter 2017 average retail petrol prices in Cairns were 137.7 cpl, a slight decrease of 0.4 cpl from the September quarter 2017 (138.1 cpl). The average differential between prices in Cairns and the five largest cities was 2.6 cpl, a decrease of 13.0 cpl from the September quarter 2017.

In the December quarter 2017 average GIRDs in Cairns were 13.2 cpl, a decrease of 9.3 cpl from the September quarter 2017 (22.5 cpl). Petrol prices in Cairns remain significantly above a long-term competitive cost-based price.


1 Developments in the petroleum industry

1.1 A new monitoring direction was given to the ACCCOn 20 December 2017, the Treasurer issued a new direction to the ACCC to monitor the prices, costs and profits relating to the supply of petroleum products and related services in the petroleum industry in Australia.2 The direction, issued under s. 95ZE of the Competition and Consumer Act 2010 (the Act) took effect from that date and lasts for two years. The previous direction expired on 17 December 2017.

The Government’s new direction has been broadened to allow the ACCC to compulsorily obtain information from companies that provide a service to the industry (such as independent terminal operators), but which are not directly involved in the supply of petroleum products.

Under the direction, the ACCC will produce reports at least quarterly that will focus on particular aspects of the fuel market of consumer interest in relation to prices, costs and profits. These will include regular quarterly reports on movements in prices in the capital cities and regional locations across Australia (of which this is the first report under the new direction) and industry reports on specific topics.

1.2 OPEC agreed to further extend crude oil production cuts

The Organisation of Petroleum Exporting Countries (OPEC) agreed in November 2016 to cut crude oil production by about 1.2 million barrels per day (bpd). In December 2016, 11 non-OPEC members (including Russia) joined the agreement, bringing the total supply reduction to about 1.8 million bpd. This represented around 2 per cent of global crude oil production. The cuts were intended to last six months from 1 January 2017, but in May 2017 they were extended by nine months to March 2018.

On 30 November 2017, OPEC and the non-OPEC members announced an extension of the production cuts to December 2018, with an option to review the arrangements in June 2018 and adjust the agreement based on market conditions.3 OPEC also decided to cap the combined output of Nigeria and Libya at below 2.8 million bpd. Previously, both countries had been exempt from the agreed production cuts due to unrest and lower-than-normal production.

1.3 The NSW Government introduced a FuelCheck appFuelCheck is an online tool providing consumers with real–time fuel price information covering every retail site across NSW.4 It is accessible on any device connected to the internet. FuelCheck enables NSW motorists to: find the cheapest fuel being sold anywhere in NSW; get directions to any retail site in NSW; search for fuel by type or brand; and submit a complaint to NSW Fair Trading if the price at the pump does not match the price shown on FuelCheck.

2 Letter from the Hon. Scott Morrison MP, Treasurer, to Mr Rod Sims, Chairman of the ACCC, 20 December 2017, at: https://www.accc.gov.au/system/files/Treasurer%20to%20ACCC%20Chair%20-%20Fuel%20monitoring.pdf; and the Hon. Scott Morrison MP, Treasurer, Consumer watchdog to put petrol companies on notice, media release, 21 December 2017, at: http://sjm.ministers.treasury.gov.au/media-release/135–2017/, accessed on 14 February 2018.

3 Reuters, OPEC, Russia agree oil cut extension to end of 2018, 30 November 2017, at: https://www.reuters.com/article/us-opec-meeting/opec-russia-agree-oil-cut-extension-to-end-of-2018-idUSKBN1DU0WW, accessed on 14 February 2018.

4 Victor Dominello MP, NSW Minister for Innovation and Better Regulation, Real-time fuel price website to empower motorists, media release, 24 August 2016, at: https://www.finance.nsw.gov.au/about-us/media-releases/real-time-fuel-price-website-empower-motorists, accessed on 14 February 2018.

https://www.accc.gov.au/system/files/Treasurer%20to%20ACCC%20Chair%20-%20Fuel%20monitoring.pdf

https://www.accc.gov.au/system/files/Treasurer%20to%20ACCC%20Chair%20-%20Fuel%20monitoring.pdf

http://sjm.ministers.treasury.gov.au/media-release/135-2017/

https://www.reuters.com/article/us-opec-meeting/opec-russia-agree-oil-cut-extension-to-end-of-2018-idUSKBN1DU0WW


https://www.finance.nsw.gov.au/about-us/media-releases/real-time-fuel-price-website-empower-motorists

https://www.finance.nsw.gov.au/about-us/media-releases/real-time-fuel-price-website-empower-motorists


On 11 October 2017, the NSW Government launched the FuelCheck app.5 The app includes all of the website functions of FuelCheck along with the following features: a ‘favourite stations’ function (which allows users to save their favourite petrol stations); a ‘my trip’ function (which enables users to find the cheapest petrol station on their journey and direct them to the station); and a ‘trends’ page (which shows the cheapest day of the week to fill up and the day’s price range).

On 22 December 2017, the NSW Minister for Finance, Victor Dominello, commented that more than 84 000 people had downloaded the FuelCheck app since its launch and the FuelCheck website had received over 3.3 million visits since it went live in August 2016.6

1.4 The Northern Territory fuel price reporting and price board arrangements commenced

In January 2017, the NT Government announced that it would introduce MyFuel NT, a territory-wide real-time mandatory retail fuel price-reporting scheme (identical to the NSW FuelCheck scheme).7 The scheme would give consumers free access (via website or mobile app) to live data from every fuel retailer in the NT so they can easily search for the cheapest fuel.

The MyFuel NT scheme commenced on 1 November 2017.8 The NT Government said that it was making the pricing information from MyFuel NT available as open data, so that price information can flow into other existing fuel price monitoring apps.

The new initiative also introduced minimum standards for retail fuel price display boards. From 1 November 2017 fuel retailers in the NT are no longer allowed to display conditionally discounted prices, such as those only available with a shopper docket. Discounts can still be provided, but the price on the board must be the price available to all motorists.

1.5 Price board arrangements in TasmaniaOn 9 August 2017, the Tasmanian Government tabled the Code of Practice for Fuel Price Boards in Parliament.9 It would ensure that only the price on the bowser rather than a discounted price was displayed on price boards at service stations.

On 9 November 2017, the Tasmanian Government announced that the Code had been published in the Tasmanian Government Gazette, and that the arrangements would take effect from 7 May 2018.10 The six-month lead-in period was to allow retailers enough time to make any necessary changes to comply with the regulations.

5 The Hon. Gladys Berejiklian, Premier of NSW, New FuelCheck app to save motorists money at the bowser, media release, 11 October 2017, at: https://www.nsw.gov.au/your-government/the-premier/media-releases-from-the-premier/new-fuelcheck-app-to-save-motorists-money-at-the-bowser/, accessed on 14 February 2018.

6 The Hon. Gladys Berejiklian, Premier of NSW, Don’t be fuelled this holiday season, media release, 22 December 2017, at: https://www.nsw.gov.au/your-government/the-premier/media-releases-from-the-premier/dont-be-fuelled-this-holiday-season/, accessed on 14 February 2018.

7 Nicole Manison, NT Treasurer, MyFuel NT to give purchase power to Territory consumers, media release, 13 January 2017, at http://newsroom.nt.gov.au/mediaRelease/22730, accessed on 14 February 2018.

8 Nicole Manison, NT Treasurer, MyFuel NT – driving down the cost of living for Territorians, media statement, 1 November 2017, at: http://newsroom.nt.gov.au/mediaRelease/23872, accessed on 14 February 2018.

9 Guy Barnett, Tasmanian Minister for Building and Construction, Code to Ensure Clear Petrol Price Displays, media release, 9 August 2017, at: http://www.premier.tas.gov.au/releases/code_to_ensure_clear_petrol_price_displays, accessed on 14 February 2018.

10 Guy Barnett, Tasmanian Minister for Building and Construction, Code of Practice for Fuel Price Boards, media release, 9 November 2017, at: https://www.tas.liberal.org.au/news/code-practice-fuel-price-boards, accessed on 14 February 2018.

https://www.nsw.gov.au/your-government/the-premier/media-releases-from-the-premier/new-fuelcheck-app-to-save-motorists-money-at-the-bowser/

https://www.nsw.gov.au/your-government/the-premier/media-releases-from-the-premier/new-fuelcheck-app-to-save-motorists-money-at-the-bowser/

https://www.nsw.gov.au/your-government/the-premier/media-releases-from-the-premier/dont-be-fuelled-this-holiday-season/

https://www.nsw.gov.au/your-government/the-premier/media-releases-from-the-premier/dont-be-fuelled-this-holiday-season/

http://newsroom.nt.gov.au/mediaRelease/22730

http://newsroom.nt.gov.au/mediaRelease/23872

http://www.premier.tas.gov.au/releases/code_to_ensure_clear_petrol_price_displays

https://www.tas.liberal.org.au/news/code-practice-fuel-price-boards


1.6 IPART released a report on the ethanol market in NSW

On 22 December 2017, the NSW Independent Pricing and Regulatory Tribunal (IPART) released its final report on the wholesale and retail markets for fuel ethanol in 2016–17.11 The key conclusions of the report were:

• Availability of E10 in NSW has become more widespread since the ethanol mandate was amended in January 2017 with the number of nozzles dispensing E10 now slightly higher than the number dispensing RULP.12

– Of the total number of nozzles dispensing either E10 or RULP in September 2017, 52 per cent dispensed E10 and 48 per cent dispensed RULP. This is roughly the inverse of the split in the first quarter of 2016.

– Choice in retail fuels remains high, with 92 per cent of service stations in NSW offering RULP as at September 2017.

• Monthly sales of fuel ethanol in NSW remained largely stable in 2016–17, at around 2.4 per cent of total petrol sales. The ethanol mandate requires volume fuel retailers to ensure that ethanol makes up a minimum of 6 per cent of the total volume of their petrol sales.

• Across NSW, retail prices of E10 were on average 2.2 cpl lower than RULP prices between August 2016 and June 2017.

• In the wholesale market for fuel ethanol competition has continued between the three major producers in 2016–17, with Queensland producers selling ethanol into NSW and vice versa.

1.7 RACQ introduced a discount scheme for its members with Puma Energy

On 21 December 2017, the RACQ announced that its members would be able to save 4.0 cpl on fuel at participating Puma Energy service stations Australia wide.13 The discount applies to all fuel, diesel and LPG purchases with a maximum of 120 litres per transaction.

There are 225 Puma Energy service stations participating around the country. Not all Puma Energy branded service stations will be participating. A list of participating sites is on the RACQ website. To redeem the discount, RACQ members present their membership card, or digital membership card, at the checkout.14

1.8 BP introduced a new way to pay for fuelOn 10 December 2017, BP announced the national rollout of its fuel payment app BPme, which allows customers to pay for fuel using their smartphone from their car.15 Customers can also view transaction history from within the app, and locate their closest BP service station. BPme is free to download and available for smartphone users with iOS or Android. The app can be used at 500 participating BP sites across Australia, with more sites added weekly.

11 IPART, Monitoring of wholesale and retail markets for fuel ethanol 2016–17, Final Report, December 2017, at: https://www.ipart.nsw.gov.au/files/sharedassets/website/shared-files/investigation-compliance-monitoring-transport-publications-ethanol-market-monitoring-2017/final-report-monitoring-of-wholesale-and-retail-markets-for-fuel-ehtanol-201617.pdf, accessed on 14 February 2018.

12 The changes to the ethanol mandate from 1 January were outlined on pages 6–7 of the ACCC’s Report on the Australian petroleum market—March quarter 2017, at: https://www.accc.gov.au/system/files/1215_Petrol%20quarterly%20report_March%20quarter%202017_FA.pdf.

13 RACQ, More than 1.6 million members to gain fuel discounts: RACQ, media release, 21 December 2017, at: https://live.racq.com.au/2017/12/1–6-million-members-gain-fuel-discounts-racq/, and RACQ, New fuel discount for members, at: https://www.racq.com.au/puma, accessed on 14 February 2018.

14 This discount scheme adds to previous discount arrangements between the Royal Automobile Club of Tasmania and United that commenced in March 2016 and between the Automobile Association of the Northern Territory and United that commenced in May 2015.

15 BP, BP’s first-to-market fuel payment app is now available to all Australians, media release, 10 December 2017, at: https://www.bp.com/content/dam/bp-country/en_au/media/media-releases/bpme-launch-10-december-2017.pdf, accessed on 14 February 2018.

https://www.ipart.nsw.gov.au/files/sharedassets/website/shared-files/investigation-compliance-monitoring-transport-publications-ethanol-market-monitoring-2017/final-report-monitoring-of-wholesale-and-retail-markets-for-fuel-ehtanol-201617.pdf



https://www.accc.gov.au/system/files/1215_Petrol%20quarterly%20report_March%20quarter%202017_FA.pdf

https://www.accc.gov.au/system/files/1215_Petrol%20quarterly%20report_March%20quarter%202017_FA.pdf

https://live.racq.com.au/2017/12/1-6-million-members-gain-fuel-discounts-racq/

https://live.racq.com.au/2017/12/1-6-million-members-gain-fuel-discounts-racq/

https://www.racq.com.au/puma

https://www.racq.com.au/puma

https://www.bp.com/content/dam/bp-country/en_au/media/media-releases/bpme-launch-10-december-2017.pdf

https://www.bp.com/content/dam/bp-country/en_au/media/media-releases/bpme-launch-10-december-2017.pdf


1.9 Viva Energy opened Australia’s largest crude oil tank at the Geelong Refinery

On 22 November 2017, Viva Energy opened its new 100 million-litre crude oil tank at its Geelong refinery in Victoria.16 It is the largest crude oil storage tank in Australia. The tank increases crude oil storage capacity at the refinery by 40 per cent, and can hold enough crude oil to produce all the fuel required to meet Victoria’s needs for about three days.

In addition to the tank, Viva Energy invested in other infrastructure projects, including a $23 million pumping station, which increases the amount of fuel transported by pipeline to Melbourne by 25 per cent, and a $4 million upgrade to the jet fuel gantry to improve supply to Melbourne and Avalon airports.

1.10 Caltex upgraded its Newport terminalOn 1 December 2017, Caltex announced the completion of its $75 million upgrade to the Newport terminal in Victoria.17 The terminal stores and distributes RULP, premium unleaded petrol (PULP), diesel, premium diesel and jet fuel. The upgrade included building two new storage tanks, which increased the fuel capacity at the terminal by 40 million litres to 100 million litres.

16 Viva Energy Australia, Viva Energy opens Australia’s largest crude oil tank at the Geelong Refinery, media release, 22 November 2017, at: https://www.vivaenergy.com.au/about-us/media-centre/news/2017/viva-energy-opens-australias-largest-crude-oil-tank-at-the-geelong-refinery, accessed on 14 February 2018.

17 Caltex, Caltex boosts Victorian fuel supply reliability and celebrates with jumbo tank art, media release, 1 December 2017, at: https://www.caltex.com.au/our-company/media-releases/caltex-boosts-victorian-fuel-supply-reliability-and-celebrates-with-jumbo-tank-art, accessed on 14 February 2018.

https://www.vivaenergy.com.au/about-us/media-centre/news/2017/viva-energy-opens-australias-largest-crude-oil-tank-at-the-geelong-refinery

https://www.vivaenergy.com.au/about-us/media-centre/news/2017/viva-energy-opens-australias-largest-crude-oil-tank-at-the-geelong-refinery

https://www.caltex.com.au/our-company/media-releases/caltex-boosts-victorian-fuel-supply-reliability-and-celebrates-with-jumbo-tank-art

https://www.caltex.com.au/our-company/media-releases/caltex-boosts-victorian-fuel-supply-reliability-and-celebrates-with-jumbo-tank-art


2 ACCC Activities

2.1 ACCC and the petrol industryThe main role of the ACCC is to enforce the Competition and Consumer Act 2010 (the Act) across the Australian economy, including the fuel industry. The ACCC’s activities under the Act include enforcement and compliance, mergers and acquisitions assessments, authorisations and notifications, and administration of the Oilcode.

Wholesale and retail petrol prices in Australia are determined by market forces. Through its petrol monitoring reports, market studies and other information channels, the ACCC promotes transparency in the Australian petroleum industry and improved public awareness of the factors that determine retail petrol prices.

2.2 Activities during the December quarter 2017

2.2.1 Brisbane petrol market reportOn 9 October 2017, the ACCC released its report on the Brisbane petrol market study. A summary of the key points was included in the ACCC’s Report on the Australian petroleum market—September quarter 2017.18 This was the fifth market study (after Darwin, Launceston, Armidale and Cairns) prepared under the ACCC’s previous Ministerial direction.

2.2.2 Proposed acquisition by BP of Woolworths’ network of retail service station sites

On 10 March 2017, the ACCC commenced a review of BP Australia Pty Ltd’s (BP) proposed acquisition of Woolworths Limited’s (Woolworths) network of retail service station sites.

BP supplies fuel to approximately 1400 BP-branded service stations throughout Australia, setting fuel prices at around 350 of these sites.

Woolworths’ retail fuel business currently operates in a co-branded alliance with Caltex Australia Petroleum Pty Ltd (Caltex)—both as a wholesale fuel customer of Caltex, and as an alliance partner with Caltex in the redemption of shopper docket fuel discounts. Woolworths’ retail fuel business currently operates 531 sites throughout Australia.

On 14 December 2017 the ACCC announced its decision to oppose the proposed acquisition.19

The ACCC considers that Woolworths is a vigorous and effective competitor which has an important influence on fuel prices and the price cycle in many markets throughout Australia. Considering the scale of the Woolworths network across Australia, the ACCC was concerned that the removal of Woolworths’ vigorous pricing strategy from the market and its replacement with BP’s premium pricing strategy was likely to have a substantial impact on the competitive process, reducing the competitive constraint on remaining market participants.

The ACCC was also concerned that the proposed acquisition would likely affect metropolitan price cycles by making the price jumps quicker, larger and more coordinated. Reduced competition would also mean that prices will not fall as far, or as quickly, in the discounting phase of the cycle.

18 ACCC, Report on the Australian petroleum market—September quarter 2017, at: https://www.accc.gov.au/publications/quarterly-reports-on-the-australian-petroleum-industry/quarterly-report-on-the-australian-petroleum-market-september-quarter-2017.

19 ACCC, ACCC to oppose BP’s acquisition of Woolworths service stations, media release, 14 December 2017, at: https://www.accc.gov.au/media-release/accc-to-oppose-bps-acquisition-of-woolworths-service-stations.

https://www.accc.gov.au/publications/quarterly-reports-on-the-australian-petroleum-industry/quarterly-report-on-the-australian-petroleum-market-september-quarter-2017



https://www.accc.gov.au/media-release/accc-to-oppose-bps-acquisition-of-woolworths-service-stations

https://www.accc.gov.au/media-release/accc-to-oppose-bps-acquisition-of-woolworths-service-stations


Authorisation applications

BP, Woolworths and BP resellers applied separately for authorisation of certain provisions of agreements in order to offer fuel discounts and benefits to consumers under Woolworths’ shopper docket discount scheme and rewards loyalty program. The ACCC’s assessment of these applications was a separate legal process and involved applying a different legal test.

On 14 December 2017, the ACCC decided to grant these applications for authorisation subject to conditions.

These conditions specify that BP and Woolworths must limit shopper docket and loyalty scheme discounts to no more than 4 cpl (in total per fuel purchase). Woolworths is not permitted to fund more than two cents of the four cent discount.

While discounts to consumers are generally beneficial, the ACCC has long-standing concerns that fuel discounts offered through shopper docket or similar schemes can have anti-competitive effects if they are at a level that efficient fuel retailers are unable to match. The ACCC has also expressed its concern about the potential for supermarket funding of fuel discounts to distort competition in fuel retailing.

The conditions have been imposed to address these concerns. However, the authorised conduct would only occur in the event that BP acquires Woolworths’ network of service stations. As noted above, the ACCC announced its decision to oppose that proposed acquisition.20

2.2.3 Stakeholder engagement and communications activityIn the December quarter 2017 the ACCC continued to respond to fuel-related media enquiries on price and competition issues. Responses were also prepared for Ministerial and other correspondence on fuel-related competition and consumer matters, including retail price movements in regional and metropolitan locations, factors influencing different retail fuel prices in locations in the same region, and the ACCC’s current fuel monitoring activities.

In the December quarter 2017, the fuel-related pages on the ACCC website received 119 272 page views. Of this total, the petrol price cycle webpage received 112 819 page views, making it the most viewed page on the ACCC website in the quarter.

In November 2017 the ACCC hosted a meeting of the Fuel Consultative Committee (FuelCC), which comprises representatives from major fuel retailers, refiner-wholesalers, peak industry associations and motoring organisations. The information and views shared at the FuelCC increase the ACCC’s understanding of fuel industry issues and assist it in undertaking its roles related to competition and consumer protection in the fuel industry.

Topics discussed at the meeting included: ACCC fuel price reporting; possible areas of focus under a new petrol monitoring direction; retail fuel price transparency; the BP-Woolworths merger; the Victorian parliamentary inquiry into regional fuel prices; implications of new fuel quality standards; states and territory fuel price reporting schemes; ethanol mandates in NSW and Queensland; regulatory costs; regional LPG fuel supply availability; and the increase in total Australian retail fuel sites.

20 Further information, including a copy of the authorisation decision, is available from the ACCC’s public register at: https://www.accc.gov.au/public-registers/authorisations-and-notifications-registers/authorisations-register/bp-australia-pty-ltd-ors-authorisations-a91580-a91582.

https://www.accc.gov.au/public-registers/authorisations-and-notifications-registers/authorisations-register/bp-australia-pty-ltd-ors-authorisations-a91580-a91582




3 Retail petrol price movements in the capital cities

This chapter focuses on petrol prices across the five largest cities (Sydney, Melbourne, Brisbane, Adelaide and Perth).21 It also examines retail prices in the three smaller capital cities (Canberra, Hobart and Darwin). Petrol prices in regional locations across Australia are discussed in chapter 4.

3.1 Retail prices over the year to December 2017Chart 3.1 shows that seven-day rolling average retail petrol prices in the five largest cities decreased from a high of 135.1 cpl in January 2017 to a low of 116.4 cpl in early July 2017.22 Prices subsequently increased by 14.7 cpl to 131.1 cpl at the end of September 2017.

In the December quarter 2017 prices decreased to 124.6 cpl on 15 October 2017 before increasing to a high of 144.5 cpl on 18 December 2017. At the end of the quarter they were 136.1 cpl.

Average prices in the December quarter 2017 were 135.1 cpl, an increase of 12.6 cpl from the September quarter 2017.

Chart 3.1: Seven-day rolling average retail petrol prices in the five largest cities: 1 January 2017 to 31 December 2017

110

115

120

125

130

135

140

145

150

Jan-17

Feb

-17

Mar-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Oct-17

Nov

-17

Dec

-17

cpl

Source: ACCC calculations based on FUELtrac data.

Note: The area to the right of the dotted vertical line in this and subsequent charts represents the December quarter 2017.

21 From 1 July 2014, the ACCC has used E10 prices instead of RULP prices for Sydney in the average price for the five largest cities.

22 A seven-day rolling average price is the average of the current day’s price and prices on the six previous days. Traditionally, the ACCC has used a seven-day rolling average to smooth out the influence of petrol price cycles in the larger capital cities on price movements. This has been less effective in recent years because the duration of price cycles in most of the larger capital cities has become substantially greater than seven days.


3.2 Retail prices compared with Mogas 95 pricesRetail petrol prices in Australia are primarily determined by international refined petrol prices. The relevant benchmark is the price of Singapore Mogas 95 Unleaded (Mogas 95).

Chart 3.2 shows that retail petrol prices in the five largest cities and Mogas 95 prices in Australian cents per litre moved in a broadly similar pattern in the year to December 2017.

Chart 3.2: Monthly average retail petrol prices in the five largest cities and Mogas 95 prices: January 2017 to December 2017

cpl

cpl

Five largest cities (LHS) Mogas 95 (RHS)

45

50

55

60

65

70

75

80

110

115

120

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130

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145

Jan-17

Feb

-17

Mar-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Oct-17

Nov

-17

Dec

-17

Source: ACCC calculations based on FUELtrac, Platts and RBA data.

In the year to December 2017:

• monthly average Mogas 95 prices varied by 12.4 cpl, from a low of 49.9 cpl in June and July 2017 to a high of 62.3 cpl in November 2017

• monthly average retail prices in the five largest cities varied by 20.3 cpl, from a low of 118.4 cpl in July 2017 to a high of 138.7 cpl in December 2017.

Quarterly average Mogas 95 prices were 60.4 cpl in the December quarter 2017, which was 7.4 cpl higher than the previous quarter.

More detail on recent movements in Mogas 95 prices is provided in chapter 5.

3.3 Gross indicative retail differencesAverage gross indicative retail differences (GIRDs) in the five largest cities were 14.2 cpl in the December quarter 2017, an increase of 3.9 cpl from the previous quarter. These are the highest quarterly average GIRDs on record in real terms since the ACCC began monitoring them in the September quarter 2002.

The average quarterly GIRDs were 6.2 cpl above their real long-term average since the September quarter 2002 of 8.0 cpl.

GIRDs are calculated by subtracting average terminal gate prices (TGPs) from average retail petrol prices. TGPs are the prices at which petrol can be purchased from wholesalers in the spot market and are posted on a regular basis on the websites of the major wholesalers. While not many wholesale transactions occur at TGPs, they can be regarded as indicative wholesale prices. TGPs vary across brands and cities. TGPs reflect the wholesale price of petrol only, and exclude other retail operating costs (such as branding, transportation and labour). While GIRDs should not be confused with actual retail profits, they are a broad indicator of gross retail margins.


Table 3.1: Quarterly average retail petrol prices, TGPs and GIRDs in the five largest cities: March quarter 2017 to December quarter 2017

Location Quarter Retail prices cpl

TGPs cpl

GIRDs cpl

Five largest cities Mar-17 129.1 116.8 12.3

Jun-17 125.2 113.5 11.7

Sep-17 122.5 112.2 10.3

Dec-17 135.1 120.9 14.2

2017 average 128.0 115.8 12.2

Sydney Mar-17 124.8 115.6 9.2

Jun-17 122.5 112.3 10.2

Sep-17 118.8 111.3 7.5

Dec-17 133.6 119.8 13.8

2017 average 124.9 114.8 10.1

Melbourne Mar-17 130.2 116.8 13.4

Jun-17 127.0 113.5 13.5

Sep-17 123.2 112.2 11.0

Dec-17 136.3 120.9 15.4

2017 average 129.2 115.9 13.3

Brisbane Mar-17 130.5 117.3 13.2

Jun-17 127.8 114.0 13.8

Sep-17 124.7 112.6 12.1

Dec-17 138.5 121.4 17.1

2017 average 130.4 116.3 14.1

Adelaide Mar-17 127.7 117.0 10.7

Jun-17 122.8 113.7 9.1

Sep-17 122.7 112.3 10.4

Dec-17 132.7 121.1 11.6

2017 average 126.5 116.0 10.5

Perth Mar-17 132.1 117.1 15.0

Jun-17 125.7 113.9 11.8

Sep-17 123.3 112.5 10.8

Dec-17 134.4 121.1 13.3

2017 average 128.9 116.2 12.7

Source: ACCC calculations based on FUELtrac, BP, Caltex, Mobil, Viva Energy and WA FuelWatch data.

Note: Retail prices, TGPs and GIRDs in Sydney are for E10.

Table 3.1 shows that, in the five largest cities over the year to December 2017, quarterly average GIRDs:

• in the December quarter 2017 were highest in Brisbane (17.1 cpl) and lowest in Adelaide (11.6 cpl)

• varied significantly over the past year and across cities, ranging from a high of 17.1 cpl (in Brisbane in the December quarter 2017) to a low of 7.5 cpl (in Sydney in the September quarter 2017).

In the December quarter 2017 quarterly average GIRDs in Brisbane and Melbourne (15.4 cpl) were the highest on record in real terms since the ACCC began monitoring them in the September quarter 2002.


The table also shows that annual average GIRDs in 2017 in the five largest cities were 12.2 cpl, which was 1.6 cpl higher than the previous year. In real terms they remain the highest on record and are currently 4.2 cpl higher than the annual average over the last 15 years (8.0 cpl) (see chart 3.3).

Chart 3.3: Annual average petrol GIRDs in the five largest cities in real terms: 2003 to 2017

cpl

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5

6

7

8

9

10

11

12

13

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Period avg: 8.0 cpl

Source: ACCC calculations based on data from the companies monitored by the ACCC, FUELtrac, Informed Sources, WA FuelWatch and Australian Bureau of Statistics, 6401.0 - Consumer Price Index, Australia, Dec 2017, Tables 1 and 2. CPI: All Groups, Index Numbers and Percentage Changes, at http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6401.0Dec%202017?OpenDocument.

Note: The base year is 2017.

Annual average GIRDs in 2017 in all cities except Sydney were also the highest on record in real terms.

Some retailers and industry organisations have advised the ACCC that the increase in GIRDs in recent years may partly reflect increased regulatory and compliance costs, especially in NSW and Queensland. Although many of these costs may have been one-off expenses, they may need to be recouped over a number of years. The ACCC recognises that increased costs may be a partial explanation for the increasing divergence between retail prices and TGPs. However, the ACCC has not received sufficient information from retailers on a consistent basis to quantify this, and considers that the high GIRDs after 2014 cannot be fully explained by cost increases.

Another possible reason for the higher GIRDs in recent years is that some retailers are setting their prices higher relative to market average TGPs than they may have done in the past. This is over and above any price increases that have occurred due to higher international refined petrol prices. For example, the ACCC is aware that this has occurred at Coles Express retail sites in recent years. This could be encouraging other retailers to follow Coles Express and also increase their prices, leading to higher average industry margins.

The GIRDs reported by the ACCC are averages across the five largest cities over time. The level of prices, costs and profits vary significantly between retail operations and not all petrol retailing sites will be achieving such high margins.




3.4 Retail prices in Brisbane were the highest among the five largest cities

Retail prices in Brisbane are regularly higher than those in Sydney, Melbourne, Adelaide and Perth.

Chart 3.4 shows quarterly average retail prices in Brisbane and average prices across Sydney, Melbourne, Adelaide and Perth over the two years to December 2017. Over this period Brisbane retail prices were on average 3.4 cpl higher than the average across the other four largest cities (ranging from a high of 5.2 cpl in the June quarter 2016 to a low of 1.3 cpl in the September quarter 2016).

In the December quarter 2017 average retail prices in Brisbane were 138.5 cpl, which was 4.3 cpl higher than the average across the other four largest cities. This was 1.6 cpl higher than the differential in the September quarter.

Chart 3.4: Quarterly average retail petrol prices in Brisbane and the other four largest cities: March quarter 2016 to December quarter 2017

cpl

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Other four largest citiesBrisbane

Mar-16

Jun-16

Sep

-16

Dec

-16

Mar-17

Jun-17

Sep

-17

Dec

-17


The ACCC released the findings of its report on the Brisbane petrol market on 9 October 2017. It noted that petrol prices in Brisbane have been significantly higher than those in the other four largest cities for the last eight years. Between 2009–10 and 2016–17, Brisbane motorists paid on average 3.3 cpl more for petrol than motorists in the other four largest cities.

The report found that the main factor influencing the higher prices in Brisbane is higher retail margins on petrol, which have contributed to profits in Brisbane being significantly higher than the average across Australia. The cost to motorists in Brisbane of higher petrol prices has been significant, at around $50 million per annum.

The report also found that retail pricing is less competitive in Brisbane, with retailers setting prices higher at the top and bottom of the price cycle than retailers in Sydney. Furthermore, Brisbane has fewer retail chains which price competitively and aggressively. Brisbane has only four retailers in this category (7-Eleven, Woolworths, Puma Energy and United), while Sydney has seven (Speedway, Metro, Budget, Westside, United, 7-Eleven and Woolworths).


3.5 Price cycles in the five largest citiesRetail petrol prices in the five largest cities in Australia move in cycles. These price cycles do not generally occur in the smaller capital cites (i.e. Canberra, Hobart and Darwin) or in most regional locations. Price cycles are the result of the pricing policies of fuel retailers and the competitive dynamic between them. They only occur at the retail level; wholesale prices do not exhibit similar cyclical movements.

Table 3.2 shows that over the year to December 2017, the number of price cycles each quarter was relatively stable in all cities. Melbourne and Brisbane had the fewest price cycles over the year, at 10 price cycles each. Perth had the most price cycles, with a regular weekly cycle for the whole period.

Table 3.2: Number of price cycles per quarter in the five largest cities: March quarter 2017 to December quarter 2017

Quarter Sydney Melbourne Brisbane Adelaide Perth

Mar-17 2 2 2 3 13

Jun-17 3 2 2 3 13

Sep-17 3 3 3 4 13

Dec-17 4 3 3 4 13

2017 12 10 10 14 52


The number of price cycles in the year to December 2017 was lower than the previous year in Sydney (by five price cycles) and Brisbane (by one price cycle), higher in Melbourne (by one price cycle), and remained unchanged in Adelaide and Perth.

The decrease in recent years in the number of price cycles in the eastern capital cities (in addition to their lack of predictability) means it is harder for consumers to take advantage of the low point of the cycle, and highlights the importance of consumers being aware of the stage of the price cycle, and where possible, timing their purchases towards the bottom of the cycle.

3.6 Prices in the three smaller capital citiesThe differential between retail petrol prices in the three smaller capital cities (Canberra, Hobart and Darwin) and the five largest cities decreased in the December quarter 2017 to 5.5 cpl compared with the previous quarter (9.0 cpl).

Chart 3.5 shows that in the year to December 2017, monthly average retail petrol prices:

• in Darwin, Hobart and Canberra were always higher than in the five largest cities

• in Hobart were the highest of the three smaller capital cities in all but one month in 2017.


Chart 3.5: Monthly average retail petrol prices in Canberra, Hobart, Darwin and the five largest cities: January 2017 to December 2017

cpl

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115

120

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Five largest citiesHobart Canberra Darwin

Jan-17

Feb

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Mar-17

Apr-17

May

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Jun-17

Jul-17

Aug

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Sep

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Oct-17

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Dec

-17


In the December quarter 2017 average retail prices in:

• Hobart were 142.1 cpl, which was 7.0 cpl higher than in the five largest cities (135.1 cpl)

• Canberra were 139.8 cpl (4.7 cpl higher)

• Darwin were 140.0 cpl (4.9 cpl higher).

Factors that may lead to relatively higher prices in Canberra, Hobart and Darwin are similar to those factors influencing prices in regional locations outlined in section 4.1.

Recent movements in Darwin retail prices are discussed further in appendix B.


3.7 Retail prices of the different petrol gradesChart 3.6 shows that retail prices of the different grades of unleaded petrol—RULP, PULP 95, PULP 98, and E10—all moved in a similar manner over the year to December 2017.23

Chart 3.6: Monthly average retail prices of RULP, PULP 95, PULP 98 and E10 in the five largest cities: January 2017 to December 2017

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160

Jan-17

Feb

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Apr-17

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Jun-17

Jul-17

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Oct-17

Nov

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Dec

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E10RULP PULP 95 PULP 98


In the December quarter 2017 the average differential in the five largest cities between:

• RULP and PULP 95 prices was 12.4 cpl (an increase of 0.2 cpl from the previous quarter)

• RULP and PULP 98 prices was 19.6 cpl (an increase of 0.1 cpl)

• E10 and RULP prices was 0.6 cpl (a decrease of 1.5 cpl).

Retail prices of the different grades of petrol move in a similar manner because they are all influenced by international refined petrol benchmark prices (which in turn predominantly move in line with changes in the price of crude oil).

However, the price differentials between the various types of petrol vary over time. For example, retailers will generally set the price of PULP at a fixed premium to RULP. Premiums are adjusted from time to time in response to factors such as changes in international benchmark differentials and local supply and demand conditions.

3.8 Petrol prices in Australia and other OECD countriesCompared with other developed countries Australia’s retail petrol prices are relatively low. However, a degree of caution needs to be exercised when comparing international petrol prices, because fuel quality standards differ among countries, as does the availability and use of fuel types.

Chart 3.7 shows average retail PULP 95 prices—both including and excluding taxes—among 33 countries in the Organisation for Economic Cooperation and Development (OECD) in the September quarter 2017 (the latest data available). It shows that of these countries Australia had the fourth-lowest retail PULP 95 prices.

23 E10 prices are for Sydney and Brisbane only. RULP prices in Sydney are used in this section to calculate average RULP prices in the five largest cities.


The main reason for the lower retail petrol prices in Australia is the relatively low rate of taxation on fuel. In the September quarter 2017 taxes made up around 39 per cent of retail PULP 95 prices in Australia. This is much lower than in many OECD countries: the average tax component on PULP 95 prices in the OECD was around 58 per cent in the September quarter 2017. Excluding taxes, PULP 95 prices in Australia were sixth-highest of the OECD countries.

Chart 3.7: Average retail PULP 95 prices and taxes in OECD countries: Australian cents per litre, September quarter 2017

United States

Mexico

Canada

Australia

Chile

Poland

Czech Republic

Hungary

Latvia

Luxembourg

Austria

Estonia

Spain

Slovenia

Slovak Republic

New Zealand

Turkey

France

Ireland

United Kingdom

Germany

Switzerland

Belgium

Portugal

Finland

Sweden

Greece

Korea

Denmark

Italy

Israel

Netherlands

Norway

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250

Australian cpl

Price less tax Tax component Average price less tax

Source: Department of the Environment and Energy, Australian Petroleum Statistics, issue 256, November 2017.

Note: All international prices shown are for PULP 95 RON, except for New Zealand (96 RON).

Chart 3.8 shows average retail RULP prices—both including and excluding taxes—among 10 OECD countries in the September quarter 2017. In the majority of OECD countries RULP is not sold in significant quantities. The chart shows that, as with PULP 95, Australia had the fourth-lowest retail RULP prices in the OECD. Excluding taxes, RULP prices in Australia were the fifth-lowest of the OECD countries.


Chart 3.8: Average retail RULP prices and taxes in OECD countries: Australian cents per litre, September quarter 2017

United StatesMexicoCanadaAustralia

ChileJapanAustriaKorea

New ZealandDenmark

Australian cpl

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250

Price less tax Tax component Average price less tax

Source: Department of the Environment and Energy, Australian Petroleum Statistics, issue 256, November 2017.


4 Retail petrol price movements in regional locations

The ACCC monitors fuel prices in all capital cities and over 190 regional locations across Australia. These locations are identified in appendix A.

4.1 Influences on regional petrol pricesMovements in retail petrol prices in regional locations are largely driven by changes in international refined petrol prices and the AUD–USD exchange rate, as they are in the five largest cities.

However, prices are generally higher in regional locations. A number of factors may contribute to these higher prices, including: a lower level of local competition; lower volumes of fuel sold; distance/location factors; and lower convenience store sales. The influence of these factors varies significantly from location to location. This means that there may be substantial differences in prices between specific regional locations.

4.2 Regional petrol prices in aggregateChart 4.1 shows that monthly average prices in the regional locations in aggregate (regional prices) increased by 10.7 cpl; from 129.7 cpl in September 2017 to 140.4 cpl in December 2017. This price increase was less than that in the five largest cities, where monthly average prices increased by 12.4 cpl between September 2017 and December 2017.

Chart 4.1: Monthly average retail petrol prices in regional locations in aggregate and the five largest cities: January 2017 to December 2017

cpl

105

110

115

120

125

130

135

140

145

Jan-17

Feb

-17

Mar-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Oct-17

Nov

-17

Dec

-17

Five largest citiesAll regional locations


The average differential between regional prices and prices in the five largest cities in the December quarter 2017 was 1.4 cpl. This was 5.2 cpl lower than in the September quarter (6.6 cpl). In 2017 the annual average differential was 5.0 cpl.

The monthly average differential between regional prices and prices in the five largest cities varied substantially during 2017, ranging from a high of 10.2 cpl in July 2017 to a low of 1.1 cpl in November 2017. During the December quarter 2017, the monthly average differential ranged between 1.1 cpl and 1.7 cpl.


In December 2017 average prices in 123 regional locations (around 67 per cent of monitored locations) were higher than average prices in the five largest cities.

While retail petrol prices in regional locations generally follow movements in the international price of refined petrol, they often do not respond as quickly—either up or down—as prices in the five largest cities. For example, in the September quarter 2017 average petrol prices in the five largest cities increased substantially in line with international refined petrol prices, while average petrol prices in regional locations were broadly unchanged.

Between July 2017 and December 2017 monthly average retail prices in the five largest cities increased by 20.3 cpl, compared with an average increase of 11.8 cpl in regional locations.

Further information on petrol price movements in the December quarter 2017 in all locations monitored by the ACCC is presented in appendix A.

4.3 Prices in each of the states and the Northern TerritoryCharts 4.2 to 4.8 show seven-day rolling average retail petrol prices in regional locations in each state and the Northern Territory, along with those of the relevant capital city, from 1 January 2017 to 31 December 2017.24 These charts also show the differential between prices in regional locations in the state/territory and the respective capital city in the months of September and December 2017, and in 2017.

In December 2017 monthly average regional prices were higher than average capital city prices in New South Wales, South Australia, Western Australia and the Northern Territory.

The charts show that price comparisons between capital cities and regional locations are significantly influenced by price cycles in a number of the capital cities over the short term.

Chart 4.2: Seven-day rolling average petrol prices in New South Wales regional locations and Sydney: 1 January 2017 to 31 December 2017

NSW regional locations Sydney

cpl

100

110

120

130

140

150

160

Jan-17

Feb

-17

Mar-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Oct-17

Nov

-17

Dec

-17

Dec avg: 4.8 cplSep avg: 6.1 cpl

2017 avg: 7.9 cpl

24 There are no prices available for locations in the Australian Capital Territory other than Canberra. The source for charts 4.2 to 4.8 is ACCC calculations based on FUELtrac data.


Chart 4.3: Seven-day rolling average petrol prices in Victorian regional locations and Melbourne: 1 January 2017 to 31 December 2017

Vic regional locations Melbourne

cpl

100

110

120

130

140

150

160Ja

n-17

Feb

-17

Mar-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Oct-17

Nov

-17

Dec

-17

Dec avg: –1.8 cplSep avg: 1.7 cpl

2017 avg: 0.5 cpl

Chart 4.4: Seven-day rolling average petrol prices in Queensland regional locations and Brisbane: 1 January 2017 to 31 December 2017

Qld regional locations Brisbane

cpl

100

110

120

130

140

150

160

Jan-17

Feb

-17

Mar-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Oct-17

Nov

-17

Dec

-17

Dec avg: –1.6 cplSep avg: 2.6 cpl

2017 avg: 3.7 cpl


Chart 4.5: Seven-day rolling average petrol prices in South Australian regional locations and Adelaide: 1 January 2017 to 31 December 2017

SA regional locations Adelaide

cpl

100

110

120

130

140

150

160Ja

n-17

Feb

-17

Mar-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Oct-17

Nov

-17

Dec

-17

Dec avg: 0.9 cpl

Sep avg: –0.5 cpl

2017 avg: 3.1 cpl

Chart 4.6: Seven-day rolling average petrol prices in Western Australian regional locations and Perth: 1 January 2017 to 31 December 2017

WA regional locations Perth

cpl

100

110

120

130

140

150

160

Jan-17

Feb

-17

Mar-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Oct-17

Nov

-17

Dec

-17


2017 avg: 6.0 cpl


Chart 4.7: Seven-day rolling average petrol prices in Tasmanian regional locations and Hobart: 1 January 2017 to 31 December 2017

Tas regional locations Hobart

cpl

100

110

120

130

140

150

160Ja

n-17

Feb

-17

Mar-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Oct-17

Nov

-17

Dec

-17

Dec avg: –1.6 cplSep avg: –1.1 cpl

2017 avg: –1.4 cpl

Chart 4.8: Seven-day rolling average petrol prices in Northern Territory regional locations and Darwin: 1 January 2017 to 31 December 2017

NT regional locations Darwin

cpl

100

110

120

130

140

150

160

Jan-17

Feb

-17

Mar-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Oct-17

Nov

-17

Dec

-17


2017 avg: 9.8 cpl


5 International price movementsThe main influences on movements in retail petrol prices in Australia are the international price of refined petrol (which is influenced in turn by the price of crude oil) and the AUD–USD exchange rate.

5.1 Crude oil and refined petrolCrude oil prices are an important influence on movements in refined petrol prices around the world. There are a number of international benchmarks used for pricing crude oil, including West Texas Intermediate (WTI), Brent, Tapis and Dubai. The most widely used benchmark on global markets is Brent crude oil.

The relevant international benchmark price for petrol in Australia is the price of refined petrol in the Asia-Pacific region—Singapore Mogas 95 Unleaded (Mogas 95). This benchmark is used for pricing petrol in Australia due to Australia’s proximity to Singapore, which is one of the world’s most important trading and refining centres.

5.1.1 Price movements over the last two yearsChart 5.1 shows international crude oil and refined oil prices in the two years to December 2017.

Chart 5.1: Weekly average Brent crude oil and Mogas 95 prices: January 2016 to December 2017

Brent crude oil Mogas 95

USD

per bl

20

30

40

50

60

70

80

90

Jan-16

Apr-16

Jul-16

Oct-16

Jan-17

Apr-17

Jul-17

Oct-17

Source: ACCC calculations based on Platts data.

Weekly average Brent crude prices increased by 100 per cent between January 2016 (USD 28 per barrel) and February 2017 (USD 56 per barrel). They subsequently decreased to around USD 45 per barrel in late-June 2017 before increasing steadily to around USD 57 per barrel by the end of September 2017.

In the December quarter 2017, weekly average Brent crude prices decreased marginally in early-October 2017 to USD 56 per barrel. Prices then continued to increase to USD 64 per barrel in November 2017 before ending the December quarter 2017 at USD 66 per barrel. At the end of December 2017, weekly average Brent prices were at their highest level since early-December 2014.

Mogas 95 prices moved in a similar manner to Brent crude oil prices over the two-year period. During the December quarter 2017, prices were around USD 71 per barrel at the beginning of October 2017 and ended the quarter at around USD 76 per barrel.


Quarterly average Brent crude oil and Mogas 95 prices both increased in the December quarter 2017: average Brent crude oil prices were around USD 61 per barrel (an increase of USD 9 per barrel) and average Mogas 95 prices were USD 74 per barrel (an increase of USD 7 per barrel).

The continued increase in prices in the December quarter 2017 was influenced by high demand and an agreement in late 2016 between OPEC and 11 non-OPEC countries (including Russia) to cut crude oil output by about 1.8 million bpd.

In November 2017, the OPEC cartel and Russia announced that it would prolong cuts to production for the whole of 2018, with an option to review the deal in June 2018 and adjust the agreement based on market conditions.25 The previous production cap had been scheduled to expire in March 2018.26 OPEC also decided to cap the combined output of Nigeria and Libya at below 2.8 million bpd. Previously, both countries were exempt from cuts due to unrest and lower-than-normal production.27

5.1.2 Crude oil prices in the long termAs with many commodities, crude oil prices fluctuate greatly. In the short term, market sentiment about economic conditions and geo-political events can drive rapid movements in crude oil prices. Over the medium to longer term, prices are driven by supply and demand factors, with periods of high or low prices lasting several years.

Extended periods of high crude oil prices provide an incentive for producers to invest in exploration and expansion. This leads to an increase in supply which in turn puts downward pressure on prices. Conversely, when crude oil prices are low, producers tend not to invest, which puts upward pressure on prices as growth in demand is not met by supply.

Chart 5.2 shows that over the 40 years to December 2017 WTI crude oil prices in real terms were on average around USD 60 per barrel. Over the last 10 years prices were historically high, with the average around USD 83 per barrel. In the December quarter 2017, real WTI crude oil prices were on average around USD 55 per barrel, around USD 7 higher than the September quarter 2017 and around USD 5 per barrel lower than the 40-year average.

25 Reuters, OPEC, Russia agree oil cut extension to end of 2018, https://www.reuters.com/article/us-opec-meeting/opec-russia-agree-oil-cut-extension-to-end-of-2018-idUSKBN1DU0WW, accessed on 14 February 2018.

26 Reuters, OPEC heading for oil cut extension with a caveat, https://www.reuters.com/article/us-opec-meeting/opec-heading-for-oil-cut-extension-with-a-caveat-idUSKBN1DS14Z, accessed on 14 February 2018.

27 Reuters, OPEC, Russia agree oil cut extension to end of 2018, https://www.reuters.com/article/us-opec-meeting/opec-russia-agree-oil-cut-extension-to-end-of-2018-idUSKBN1DU0WW, accessed on 14 February 2018.



https://www.reuters.com/article/us-opec-meeting/opec-heading-for-oil-cut-extension-with-a-caveat-idUSKBN1DS14Z

https://www.reuters.com/article/us-opec-meeting/opec-heading-for-oil-cut-extension-with-a-caveat-idUSKBN1DS14Z




Chart 5.2: Monthly average real WTI crude oil prices: January 1978 to December 2017USD

per bl

0

20

40

60

80

100

120

140

160

1978

1980

1982

1984

1986

1988

1989

1991

1993

1995

1997

1999

2000

2002

2004

2006

2008

2010

2011

2013

2015

2017

WTI 40-year average 10-year average

Source: ACCC calculations based on data used with permission from The Wall Street Journal, WSJ.com, Copyright 2015 Dow Jones & Company, Inc. All rights reserved, Reuters and US Department of Labor, Bureau of Labor Statistics, Consumer Price Index for all urban consumers, http://www.dlt.ri.gov/Lmi/pdf/cpi.pdf, accessed on 14 February 2018.

Note: Real (inflation adjusted) values in December 2017 dollars.

5.2 AUD–USD exchange rateThe AUD–USD exchange rate is a significant determinant of Australia’s retail petrol prices because international refined petrol is bought and sold in United States dollars in global markets.

Chart 5.3 shows that in the two years to December 2017, the AUD–USD exchange rate increased from a low of USD 0.69 in January 2016 to USD 0.78 in April 2016, before fluctuating between USD 0.71 and USD 0.80 from May 2016 to July 2017. The AUD–USD exchange rate peaked at USD 0.81 in September 2017, before decreasing to USD 0.75 in December 2017, and ending the December quarter at USD 0.78.

Chart 5.3: Daily AUD–USD exchange rates: 1 January 2016 to 31 December 2017

0.65

0.67

0.69

0.71

0.73

0.75

0.77

0.79

0.81

0.83

Jan-16

Apr-16

Jul-16

Oct-16

Oct-17

Jan-17

Apr-17

Jul-17

USD

Source: RBA data.

Note: Exchange rates are the daily RBA 4 pm closing rates. See: http://www.rba.gov.au/statistics/frequency/exchange-rates.html.

http://www.dlt.ri.gov/Lmi/pdf/cpi.pdf

http://www.rba.gov.au/statistics/frequency/exchange-rates.html


In the December quarter 2017, the average AUD–USD exchange rate was USD 0.77, which was around USD 0.02 lower than the September quarter 2017. Had the AUD–USD exchange rate remained at the September 2017 high of USD 0.81, average retail petrol prices in the December quarter 2017 in Australia would have been 3.6 cpl lower (everything else being equal).

The lower AUD–USD exchange rate compounded the influence of the increase in international refined petrol prices on Australian retail petrol prices.


6 Diesel and LPG prices

6.1 Diesel price movementsQuarterly average retail diesel prices in the five largest cities increased in the December quarter 2017 to 133.8 cpl, an increase of 7.5 cpl from the September quarter 2017.

The appropriate international benchmark price for diesel is the price of Singapore Gasoil with 10 parts per million sulphur content (Gasoil 10 ppm). International demand for diesel is different from that for petrol, in part because of diesel’s off-road, industrial and electricity generation uses. However, both petrol and diesel are refined from crude oil and their prices tend to broadly follow similar movements over the long term.

Chart 6.1 shows that seven-day rolling average retail diesel prices in the five largest cities broadly tracked Gasoil 10 ppm prices over the past year. Unlike petrol prices, diesel prices in the five largest cites do not move in cycles.

Chart 6.1: Seven-day rolling average retail diesel prices in the five largest cities and Gasoil 10 ppm prices: 1 January 2017 to 31 December 2017

cpl

cpl

Retail prices (LHS) Gasoil 10 ppm (lagged 11 days) (RHS)

40

45

50

55

60

65

70

75

80

100

105

110

115

120

125

130

135

140

Jan-17

Feb

-17

Mar-17

Oct-17

Nov

-17

Dec

-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Source: ACCC calculations based on FUELtrac, Platts and RBA data.

Note: Gasoil 10 ppm prices are lagged by 11 days as there is generally around a one to two-week lag between changes in international prices and changes in retail prices in the five largest cities.

Seven-day rolling average diesel retail prices at the beginning of the quarter were 127.6 cpl. They increased steadily by 11.1 cpl to 138.7 cpl at the end of the quarter. Gasoil 10 ppm prices increased by 8.6 cpl from a low of 53.9 cpl at the beginning of the quarter to a high of 62.5 cpl at the end of December 2017.

Average Gasoil 10 ppm prices in the December quarter 2017 were 58.9 cpl, an increase of 8.5 cpl from the September quarter.

6.2 LPG price movementsIn the December quarter 2017 average retail LPG prices in the five largest cities were 82.2 cpl, an increase of 10.0 cpl from the September quarter (72.2 cpl).

The appropriate international benchmarks for LPG are the Saudi Aramco Contract Prices for propane and butane (Saudi CP). These prices only change once a month, at the start of each month. International LPG prices loosely move in line with international refined petrol and diesel prices.


Seven-day rolling average retail LPG prices at the beginning of the quarter were 72.4 cpl. They increased by 13.8 cpl to end the quarter at 86.2 cpl (see chart 6.2). Over the same period the Saudi CP benchmarks increased by 8.4 cpl, from 33.8 cpl in September to 42.2 cpl in December.

The chart shows that retail prices were broadly stable for the first nine months of 2017 and have not been as responsive, both down and up, to movements in Saudi CP benchmark prices.

Chart 6.2: Seven-day rolling average retail LPG prices in the five largest cities and monthly Saudi CP benchmarks: 1 January 2017 to 31 December 2017

cpl

cpl

Retail prices (LHS) Saudi CP (RHS)

20

25

30

35

40

45

50

55

60

65

45

50

55

60

65

70

75

80

85

90

Jan-17

Feb

-17

Mar-17

Apr-17

May

-17

Jun-17

Jul-17

Aug

-17

Sep

-17

Oct-17

Nov

-17

Dec

-17

Source: ACCC calculations based on FUELtrac, RBA, Gas Energy Australia and Reuters data.

As the Saudi CP benchmarks only change at the start of each month, the relationship between movements in the international benchmark prices and retail prices for LPG is somewhat different from petrol and diesel. Furthermore, international LPG prices are influenced by non-transport factors, such as demand for heating, particularly in the Northern Hemisphere.

Like diesel prices, retail LPG prices tend to be less volatile than petrol prices and do not have price cycles. LPG usage in Australia is significantly less than petrol and diesel usage, and there are fewer retailers of LPG, particularly outside Victoria (where around half of Australia’s automotive LPG is sold).


Appendix A—Petrol price data for monitored locationsThe ACCC monitors fuel prices in all capital cities and over 190 regional locations across Australia.

Monthly average retail petrol prices for September and December 2017, and the change between the two, are shown in table A1.28 The table also shows the differential between average petrol prices in the five largest cities and each regional location in the month of December 2017 and 2016–17.29

Table A1: Monthly average petrol prices in September and December 2017 and the city–country differential in the month of December 2017 and 2016–17—cpl

Location Sep 2017 monthly avg

Dec 2017 monthly avg

Change Sep to Dec

Differential Dec 2017

Differential 2016–17

Sydney 122.6 135.2 12.6

Melbourne 125.8 141.1 15.3

Brisbane 127.6 142.3 14.7

Adelaide 127.8 137.1 9.3

Perth 127.6 137.6 10.0

Five largest cities 126.3 138.7 12.4

Hobart 137.1 146.0 8.9 7.3 11.4

Canberra 129.9 146.8 16.9 8.1 6.8

Darwin 128.1 148.0 19.9 9.3 5.3

New South Wales

Albury 126.1 138.8 12.7 0.1 1.5

Armidale 127.2 140.9 13.7 2.2 9.0

Ballina 129.5 140.6 11.1 1.9 8.5

Batemans Bay 135.9 135.7 –0.2 –3.0 10.4

Bathurst 128.4 140.2 11.8 1.5 5.4

Bega 132.4 139.8 7.4 1.1 10.2

Broken Hill 126.3 140.8 14.5 2.1 3.0

Bulahdelah 122.8 137.5 14.7 –1.2 7.7

Casino 117.0 139.8 22.8 1.1 –1.0

Central Coast 123.2 141.9 18.7 3.2 3.0

Coffs Harbour 127.9 138.7 10.8 0.0 3.8

Cooma 133.3 141.0 7.7 2.3 8.1

Coonabarabran 138.1 139.5 1.4 0.8 11.2

Cootamundra 126.0 137.6 11.6 –1.1 3.1

Cowra 126.3 137.9 11.6 –0.8 –1.1

Deniliquin 130.7 140.0 9.3 1.3 7.7

Dubbo 129.5 136.7 7.2 –2.0 7.9

Forbes 134.9 139.1 4.2 0.4 7.7

28 For a price to be included in the table there had to be a price observation on at least 75 per cent of days in the month/year. Eleven locations—Blackall, Buronga, Charleville, Cloncurry, Coober Pedy, Cunnamulla, Gundagai, Normanton, Oberon, Weipa and Woolgoolga—did not have sufficient data for September and/or December 2017. E10 prices instead of RULP prices are reported in Sydney, Bulahdelah, Coonabarabran, Cowra, Gilgandra, Gunnedah, Lithgow, Murwillumbah, Ulladulla, Wellington and West Wyalong.

29 The source for all prices in this appendix is ACCC calculations based on FUELtrac data.




Change Sep to Dec



Forster 131.8 141.5 9.7 2.8 10.6

Gilgandra 128.4 137.5 9.1 –1.2 7.2

Glen Innes 129.4 135.0 5.6 –3.7 n/a

Goulburn 119.9 135.1 15.2 –3.6 –2.1

Grafton 117.6 138.0 20.4 –0.7 3.7

Griffith 130.5 138.9 8.4 0.2 6.4

Gunnedah 129.2 129.8 0.6 –8.9 5.2

Hay 129.2 135.9 6.7 –2.8 3.2

Inverell 129.9 136.7 6.8 –2.0 6.8

Jerilderie 130.6 139.9 9.3 1.2 6.6

Kempsey 127.4 136.7 9.3 –2.0 4.9

Leeton 125.9 135.6 9.7 –3.1 0.3

Lismore 122.8 133.6 10.8 –5.1 3.4

Lithgow 117.9 130.0 12.1 –8.7 0.8

Merimbula 130.1 137.8 7.7 –0.9 5.7

Mittagong 129.5 147.4 17.9 8.7 11.4

Moama 122.6 139.7 17.1 1.0 –1.8

Moree 129.4 139.4 10.0 0.7 6.2

Moruya 133.6 139.9 6.3 1.2 6.0

Moss Vale 129.5 148.0 18.5 9.3 7.2

Mudgee 130.1 140.8 10.7 2.1 7.8

Murwillumbah 120.2 133.5 13.3 –5.2 0.4

Muswellbrook 130.0 138.5 8.5 –0.2 6.6

Narrabri 134.3 143.3 9.0 4.6 8.3

Newcastle 124.0 141.4 17.4 2.7 1.1

Nowra 123.3 144.9 21.6 6.2 4.2

Nyngan 130.3 140.6 10.3 1.9 7.5

Orange 129.2 140.2 11.0 1.5 4.2

Parkes 131.7 139.8 8.1 1.1 8.9

Port Macquarie 131.4 140.4 9.0 1.7 7.8

Queanbeyan 127.4 146.9 19.5 8.2 4.2

Singleton 134.1 146.4 12.3 7.7 8.3

Tamworth 130.2 137.5 7.3 –1.2 6.2

Taree 130.8 142.4 11.6 3.7 9.1

Temora 125.0 135.9 10.9 –2.8 2.0

Tumut 130.1 137.7 7.6 –1.0 5.9

Tweed Heads South 124.7 146.7 22.0 8.0 2.8

Ulladulla 122.0 137.9 15.9 –0.8 3.8

Wagga Wagga 128.7 140.0 11.3 1.3 7.6

Wauchope 131.2 140.0 8.8 1.3 7.1

Wellington 126.3 135.9 9.6 –2.8 –2.6

West Wyalong 129.2 138.0 8.8 –0.7 4.9

Wollongong 126.0 143.9 17.9 5.2 0.4

Yass 129.2 142.1 12.9 3.4 8.0




Change Sep to Dec



Northern Territory

Alice Springs 141.2 154.0 12.8 15.3 13.2

Katherine 135.1 145.3 10.2 6.6 8.9

Tennant Creek 146.8 154.2 7.4 15.5 21.0

Queensland

Atherton 137.9 140.1 2.2 1.4 11.7

Ayr 127.0 140.2 13.2 1.5 0.7

Biloela 132.8 142.0 9.2 3.3 11.0

Blackwater 137.9 140.1 2.2 1.4 13.3

Bowen 129.9 141.8 11.9 3.1 8.2

Bundaberg 126.2 138.0 11.8 –0.7 0.2

Caboolture 130.4 144.1 13.7 5.4 3.1

Cairns 137.9 139.0 1.1 0.3 13.1

Charters Towers 129.9 140.5 10.6 1.8 9.2

Childers 125.5 137.5 12.0 –1.2 1.9

Dalby 121.9 140.4 18.5 1.7 4.6

Emerald 137.9 140.4 2.5 1.7 12.0

Gladstone 125.2 141.2 16.0 2.5 4.6

Gold Coast 129.3 142.5 13.2 3.8 1.7

Goondiwindi 134.8 141.3 6.5 2.6 5.2

Gympie 124.3 134.8 10.5 –3.9 1.4

Hervey Bay 128.1 140.9 12.8 2.2 9.5

Ingham 132.7 140.3 7.6 1.6 7.1

Innisfail 130.3 140.1 9.8 1.4 12.2

Ipswich 127.1 141.5 14.4 2.8 –2.3

Kingaroy 131.9 140.6 8.7 1.9 6.4

Longreach 145.3 145.4 0.1 6.7 13.6

Mackay 128.8 141.9 13.1 3.2 7.2

Mareeba 129.8 141.5 11.7 2.8 9.4

Maryborough 124.5 137.0 12.5 –1.7 1.4

Miles 123.3 132.9 9.6 –5.8 –4.3

Moranbah 131.1 137.1 6.0 –1.6 4.2

Mt Isa 137.9 149.7 11.8 11.0 9.4

Rockhampton 133.1 141.7 8.6 3.0 11.8

Roma 124.9 140.1 15.2 1.4 5.1

Sunshine Coast 128.6 141.2 12.6 2.5 5.2

Toowoomba 125.7 139.6 13.9 0.9 0.7

Townsville 124.6 141.7 17.1 3.0 5.3

Tully 129.9 140.2 10.3 1.5 10.3

Warwick 127.9 140.4 12.5 1.7 7.8

Whitsunday 119.9 141.1 21.2 2.4 –2.0

Yeppoon 131.6 141.0 9.4 2.3 11.5




Change Sep to Dec



South Australia

Bordertown 125.6 135.1 9.5 –3.6 0.1

Ceduna 129.1 137.5 8.4 –1.2 3.3

Clare 124.2 135.4 11.2 –3.3 –4.6

Gawler 130.9 139.8 8.9 1.1 –0.2

Kadina 127.0 135.6 8.6 –3.1 –3.0

Keith 127.4 139.0 11.6 0.3 1.3

Loxton 124.9 138.5 13.6 –0.2 –1.6

Mt Gambier 122.2 137.8 15.6 –0.9 –1.6

Murray Bridge 125.0 135.6 10.6 –3.1 –0.9

Naracoorte 129.2 138.8 9.6 0.1 2.6

Port Augusta 127.3 139.3 12.0 0.6 0.6

Port Lincoln 125.4 138.9 13.5 0.2 1.5

Port Pirie 125.2 135.3 10.1 –3.4 –2.3

Renmark 125.1 138.9 13.8 0.2 –2.0

Tailem Bend 127.7 137.5 9.8 –1.2 0.4

Victor Harbour 124.8 139.6 14.8 0.9 1.6

Whyalla 126.7 139.0 12.3 0.3 1.9

Tasmania

Burnie 135.1 143.9 8.8 5.2 8.3

Campbell Town 135.9 145.3 9.4 6.6 10.7

Devonport 133.7 141.2 7.5 2.5 9.3

Huonville 133.4 144.9 11.5 6.2 9.6

Launceston 137.9 147.1 9.2 8.4 11.9

Queenstown 138.9 147.0 8.1 8.3 12.9

Smithton 134.2 141.2 7.0 2.5 8.7

Sorell 138.6 143.7 5.1 5.0 9.2

Ulverstone 134.9 144.4 9.5 5.7 8.6

Wynyard 136.1 143.4 7.3 4.7 9.0

Victoria

Ararat 126.8 140.0 13.2 1.3 0.7

Bairnsdale 120.0 135.3 15.3 –3.4 –3.0

Ballarat 122.9 138.2 15.3 –0.5 –1.0

Benalla 127.9 138.8 10.9 0.1 2.7

Bendigo 122.7 139.5 16.8 0.8 1.5

Cobram 128.3 138.4 10.1 –0.3 2.0

Colac 125.9 137.1 11.2 –1.6 –0.1

Corryong 137.4 147.2 9.8 8.5 9.1

Echuca 122.9 139.5 16.6 0.8 –1.1

Euroa 129.7 138.7 9.0 0.0 2.5

Geelong 125.3 140.3 15.0 1.6 0.2

Hamilton 127.1 139.4 12.3 0.7 2.0

Horsham 130.3 140.1 9.8 1.4 2.4

Koo Wee Rup 126.7 143.8 17.1 5.1 0.1

Kyabram 127.3 140.3 13.0 1.6 2.0




Change Sep to Dec



Lakes Entrance 129.3 137.7 8.4 –1.0 1.1

Leongatha 128.8 139.1 10.3 0.4 3.6

Mansfield 132.3 139.9 7.6 1.2 6.5

Mildura 127.8 138.6 10.8 –0.1 2.3

Moe 128.3 139.9 11.6 1.2 1.6

Morwell 128.3 133.5 5.2 –5.2 0.5

Portland 131.5 139.1 7.6 0.4 0.9

Sale 128.3 140.5 12.2 1.8 2.0

Seymour 126.1 141.6 15.5 2.9 1.8

Shepparton 125.2 135.6 10.4 –3.1 0.6

Swan Hill 127.3 136.3 9.0 –2.4 2.4

Traralgon 128.8 140.3 11.5 1.6 1.8

Wallan 126.0 140.5 14.5 1.8 0.9

Wangaratta 126.7 139.6 12.9 0.9 0.5

Warrnambool 129.4 140.4 11.0 1.7 0.9

Wodonga 123.0 137.6 14.6 –1.1 0.4

Wonthaggi 129.7 139.5 9.8 0.8 3.4

Yarrawonga 131.9 139.8 7.9 1.1 1.7

Western Australia

Albany 127.5 139.6 12.1 0.9 2.0

Boulder 135.3 139.9 4.6 1.2 9.1

Bridgetown 127.2 137.1 9.9 –1.6 4.4

Broome 144.2 155.0 10.8 16.3 21.1

Bunbury 129.7 139.5 9.8 0.8 4.5

Busselton 129.4 137.2 7.8 –1.5 2.0

Carnarvon 142.1 144.8 2.7 6.1 17.4

Collie 128.5 138.0 9.5 –0.7 4.3

Dongara 127.5 136.3 8.8 –2.4 5.9

Esperance 130.1 139.7 9.6 1.0 7.7

Eucla 148.9 156.9 8.0 18.2 25.5

Kalgoorlie 135.4 139.3 3.9 0.6 8.7

Karratha 139.9 149.8 9.9 11.1 21.6

Manjimup 125.6 136.7 11.1 –2.0 1.2

Mount Barker 126.6 134.3 7.7 –4.4 3.1

Port Hedland 136.8 145.9 9.1 7.2 15.3

Waroona 128.9 135.1 6.2 –3.6 n/a


Appendix B—Update on regional market studiesUnder the previous monitoring direction the ACCC undertook regional petrol market studies in Darwin, Launceston, Armidale and Cairns, and continues to monitor prices and GIRDs in those locations.

DarwinThe ACCC’s report on the Darwin petrol market was released in November 2015.30 It found that the increase in retail petrol margins in Darwin in recent years had imposed a significant cost on motorists. The report noted that higher prices and profits in Darwin were the result of weak retail competition.

Darwin petrol prices increased in the December quarter 2017Chart B1 shows quarterly average retail petrol prices in Darwin and the five largest cities from the March quarter 2015 to the December quarter 2017.

Chart B1: Quarterly average retail petrol prices in Darwin and the five largest cities: March quarter 2015 to December quarter 2017

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In the December quarter 2017 average retail petrol prices in Darwin were 140.0 cpl, an increase of 11.5 cpl from the September quarter 2017 (128.5 cpl).

The market study noted that the average differential between prices in Darwin and the five largest cities in 2012–13 and 2013–14 was over 19.0 cpl. Since then it has decreased significantly. The quarterly average differential has ranged from a low of –2.0 cpl in the June quarter 2016 to a high of 13.7 cpl in the March quarter 2015.

In the December quarter 2017 the average differential was 4.9 cpl, a decrease of 1.1 cpl from the September quarter 2017 (6.0 cpl). In 2017, the annual average differential was 6.6 cpl, an increase of 3.3 cpl from 2016.

30 ACCC, Report on the Darwin petrol market, November 2015, at: https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-darwin-petrol-market.

https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-darwin-petrol-market

https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-darwin-petrol-market


Darwin petrol prices are marginally above a long-term competitive cost-based price The ACCC’s Darwin report noted that motorists were paying around 10 cpl more than they should have been in a competitive market. This was based on a comparison of GIRDs in Darwin with those in the larger capital cities.

Chart B2 shows Darwin petrol prices on a rolling annual average basis from 1 January 2015 to 31 December 2017. Each daily price in the chart is the average of that day’s price and prices on 364 previous days. Analysis of prices over the long term enables short-term influences (such as lags in regional price movements) to be smoothed out.

The chart also shows estimated Darwin prices calculated on a long-term cost basis. This calculation reflects the fact that costs (such as freight and operating costs per litre) are higher in Darwin, and assumes that retail margins in Darwin should be broadly similar to long-term average retail margins in the five largest cities. This long-term competitive cost-based price provides a benchmark against which to compare current price levels. It is not static and will change as its underlying elements change over time. If retail prices are constantly above this benchmark price for a sustained period, this may be indicative of a less competitive market in which retailers are earning higher margins at the expense of consumers.

Chart B2: Rolling annual average retail prices and a long-term competitive cost-based price in Darwin, and the difference: 1 January 2015 to 31 December 2017

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Retail price (LHS) Competitive cost-based price (LHS) Di�erence (RHS)

ACCC announces Darwin market study 10 Mar 2015

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ACCC report released23 Nov 2015

Source: ACCC calculations based on FUELtrac and Informed Sources data, and data from the companies that participated in the Darwin market study.

The chart indicates that petrol prices in Darwin were marginally above a long-term competitive cost-based price in the December quarter 2017.

Darwin GIRDs increased in the December quarter 2017Chart B3 shows quarterly average GIRDs in Darwin over a three-year period from the March quarter 2015 to the December quarter 2017. In the December quarter 2017 Darwin GIRDs were 14.5 cpl, an increase of 2.8 cpl from the September quarter 2017 (11.7 cpl). Darwin GIRDs were marginally higher than those in the five largest cities (by 0.3 cpl). Annual average GIRDs in Darwin were 14.1 cpl in 2017, an increase of 4.7 from 2016.


Chart B3: Quarterly average petrol GIRDs in Darwin: March quarter 2015 to December quarter 2017cp

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Source: ACCC calculations based on FUELtrac, Australian Institute of Petroleum (AIP), BP, Caltex, Mobil, Viva Energy and WA FuelWatch data.

Darwin retail prices since the introduction of MyFuel NTOn 1 November 2017, the MyFuel NT scheme commenced. It is a territory-wide real-time mandatory retail fuel price-reporting scheme, which gives consumers access (via website or mobile app) to live data from every fuel retailer in the NT.

Chart B4 shows daily average petrol prices and TGPs (lagged by five days) in Darwin over the period 1 September 2017 to 31 January 2018. Retail prices increased significantly prior to the introduction of MyFuel NT following an increase in TGPs. However, the increase in retail prices (around 11.0 cpl) was larger than the increase in TGPs (around 8.0 cpl) and occurred immediately.

Retail prices increased in mid-November 2017 by around 5.0 cpl, and again in early-December 2017 by a further 4.0 cpl to around 149.0 cpl and have been relatively unchanged since then. TGPs remained broadly stable from mid-November 2017.

Consumers can use the MyFuel NT scheme to identify the highest and lowest priced retail sites in Darwin and buy petrol at the lower priced sites. For example, on 13 February 2018, Coles Express had the highest priced retail sites (at 149.9 cpl) and FuelXpress Winnellie had the lowest (at 137.5 cpl). There were five United retail sites at 144.7 cpl.


Chart B4: Daily average petrol prices and TGPs (lagged five days) in Darwin: 1 September 2017 and 31 January 2018

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MyFuel NT introduced1 November 2017

Source: ACCC calculations based on FUELtrac and AIP data.

LauncestonThe ACCC report on the Launceston petrol market was released in July 2016.31 It found that between 2012–13 and the first half of 2015–16 Launceston motorists paid on average around 12 cpl more for petrol than motorists in the five largest cities. The report noted that if the Launceston market was more competitive motorists could expect savings of 4–5 cpl on a sustainable basis. The three main factors causing higher prices in Launceston were higher transport costs; higher wholesale operating costs and margins; and higher retail operating costs and margins.

Launceston petrol prices increased in the December quarter 2017In the December quarter 2017 average retail petrol prices in Launceston were 143.3 cpl, an increase of 5.1 cpl from the September quarter 2017 (138.2 cpl) (see chart B5). The differential between prices in Launceston and the five largest cities was 8.2 cpl. This was a significant decrease from the September quarter 2017 (15.7 cpl). In 2017 the average differential was 13.5 cpl.

31 ACCC, Report on the Launceston petrol market, July 2016, at: https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-launceston-petrol-market.

https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-launceston-petrol-market

https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-launceston-petrol-market


Chart B5: Quarterly average retail petrol prices in Launceston and the five largest cities: March quarter 2015 to December quarter 2017

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Launceston petrol prices remain above a long-term competitive cost-based price Chart B6 shows Launceston petrol prices on a rolling annual average basis and estimated Launceston prices calculated on a long-term competitive cost basis from 1 January 2015 to 31 December 2017. These prices have been calculated on the basis outlined for Darwin. The chart shows that petrol prices in Launceston are currently above a long-term competitive cost-based price, and that the difference between average retail prices and the long-term competitive cost-based price increased marginally in the December quarter 2017. This may reflect the absence of vigorous and effective competition in Launceston.

Chart B6: Rolling annual average retail prices and a long-term competitive cost-based price in Launceston, and the difference: 1 January 2015 to 31 December 2017

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ACCC announces Launceston market study 10 May 2015

Source: ACCC calculations based on FUELtrac and Informed Sources data, and data from the companies that participated in the Launceston market study.


Launceston GIRDs decreased in the December quarter 2017Chart B7 shows quarterly average GIRDs in Launceston and the five largest cities over the three-year period from the March quarter 2015 to the December quarter 2017.32

In the December quarter 2017 average GIRDs in Launceston were 16.8 cpl, a decrease of 3.8 cpl from the September quarter 2017 (20.6 cpl). They were 2.6 cpl higher in Launceston than the five largest cities in the December quarter 2017.

Chart B7: Quarterly average petrol GIRDs in Launceston and the five largest cities: March quarter 2015 to December quarter 2017

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Source: ACCC calculations based on FUELtrac, AIP, BP, Caltex, Mobil, Viva Energy and WA FuelWatch data.

Annual average GIRDs in Launceston were 20.3 cpl in 2017, an increase of 5.5 cpl from 2016.

ArmidaleThe ACCC report on the Armidale petrol market was released in November 2016.33 It found that relatively weak retail competition in Armidale, reflected by a lack of price discounting, contributed to E10 prices in Armidale being on average 8 cpl higher than RULP prices in the five largest cities between 2012–13 and 2014–15.

Armidale petrol prices increased in the December quarter 2017Chart B8 shows quarterly average retail petrol prices in Armidale and the five largest cities from the March quarter 2015 to the December quarter 2017.

In the December quarter 2017 average retail petrol prices in Armidale were 135.2 cpl, an increase of 10.7 cpl from the September quarter 2017 (124.5 cpl). The average differential between prices in Armidale and the five largest cities was 0.1 cpl, the lowest differential since the June quarter 2016 (–0.3 cpl). In 2017, the annual average differential was 3.9 cpl.

32 Hobart TGPs were used as a proxy for TGPs in Launceston.

33 ACCC, Report on the Armidale petrol market, November 2016, at: https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-armidale-petrol-market. References to petrol prices in Armidale are to E10 prices.

https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-armidale-petrol-market

https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-armidale-petrol-market


Chart B8: Quarterly average retail petrol prices in Armidale and the five largest cities: March quarter 2015 to December quarter 2017

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Source: ACCC calculations based on FUELtrac.

Armidale petrol prices remain above a long-term competitive cost-based price Chart B9 shows Armidale petrol prices on a rolling annual average basis and estimated Armidale prices calculated on a long-term competitive cost basis from 1 January 2015 to 31 December 2017. These prices have been calculated on the basis outlined for Darwin. The chart indicates that petrol prices in Armidale remain above a long-term competitive cost-based price. This may reflect the absence of vigorous and effective competition in Armidale.

Chart B9: Rolling annual average retail prices and a long-term competitive cost-based price in Armidale, and the difference: 1 January 2015 to 31 December 2017

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ACCC report released21 Nov 2016

ACCC announces Armidale market study 3 Aug 2015

Source: ACCC calculations based on FUELtrac and Informed Sources data, and data from the companies that participated in the Armidale market study.


Armidale GIRDs increased in the December quarter 2017Chart B10 shows quarterly average GIRDs in Armidale over a three-year period from the March quarter 2015 to the December quarter 2017.

In the December quarter 2017 average GIRDs in Armidale were 15.3 cpl, an increase of 2.2 cpl from the September quarter 2017 (13.1 cpl). In 2017, annual average GIRDs in Armidale were 17.1 cpl.

Chart B10: Quarterly average petrol GIRDs in Armidale and the five largest cities: March quarter 2015 to December quarter 2017

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Note: Sydney and Brisbane E10 TGPs from monitored companies were used as a proxy for Armidale TGPs.

Cairns The ACCC report on the Cairns petrol market was released in May 2017.34 It found that the lack of vigorous and effective retail price competition in Cairns contributed to the increase in retail margins and profits in recent years.

Cairns petrol prices decreased marginally in the December quarter 2017Chart B11 shows quarterly average retail petrol prices in Cairns and the five largest cities from the March quarter 2015 to the December quarter 2017.

In the December quarter 2017 average retail petrol prices in Cairns were 137.7 cpl, a decrease of 0.4 cpl from the September quarter 2017 (138.1 cpl). The average differential between prices in Cairns and the five largest cities was 2.6 cpl, a decrease of 13.0 cpl from the September quarter 2017. In 2017, the annual average differential was 11.8 cpl.

34 ACCC, Report on the Cairns petrol market, May 2017, at: https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-cairns-petrol-market.

https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-cairns-petrol-market

https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-cairns-petrol-market


Chart B11: Quarterly average retail petrol prices in Cairns and the five largest cities: March quarter 2015 to December quarter 2017

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Cairns petrol prices are above a long-term competitive cost-based price Chart B12 shows Cairns petrol prices on a rolling annual average basis and estimated Cairns prices calculated on a long-term competitive cost basis from 1 January 2015 to 31 December 2017. These prices have been calculated on the basis outlined for Darwin. The chart indicates that petrol prices in Cairns are currently above a long-term competitive cost-based price, which may reflect the absence of vigorous and effective competition.

Chart B12: Rolling annual average retail prices and a long-term competitive cost-based price in Cairns, and the difference: 1 January 2015 to 31 December 2017

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ACCC report released30 May 2017


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70ACCC announces Cairns

market study 19 Apr 2016

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Source: ACCC calculations based on FUELtrac and Informed Sources data, and data from the companies that participated in the Cairns market study.


Cairns GIRDs decreased significantly in the December quarter 2017Chart B13 shows quarterly average GIRDs in Cairns over the three-year period from the March quarter 2015 to the December quarter 2017.

In the December quarter 2017 average GIRDs in Cairns were 13.2 cpl, a decrease of 9.3 cpl from the September quarter 2017 (22.5 cpl). Annual average GIRDs in Cairns were 20.4 cpl in 2017, an increase of 2.6 cpl from 2016.

Chart B13: Quarterly average petrol GIRDs in Cairns and the five largest cities: March quarter 2015 to December quarter 2017

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