What The ACCC Can Do About Petrol Prices

The Australian Competition and Consumer Commission (ACCC) has commenced an investigation into whether petrol companies illegally share pricing information in a way that reduces competition. That doesn't mean we'll see a fixed price for petrol, but it could see further shake-ups in the typical pattern of petrol becoming cheaper or more expensive on given days.

Picture by Newtown Graffiti

A point we often have to make about the ACCC is that it doesn't have the power to tell businesses to sell goods at a specific price. That's also true when it comes to petrol.

However, the ACCC can (and will) intervene if it believes competitors are colluding in order to stop price competition. Say a group of large businesses all agree that they won't charge less than a given price, or that they'll only reduce prices on a given day. That's a clear violation of anti-competition law.

The ACCC is now formally investigating whether large petrol companies have indulged in that kind of behaviour. As its announcement notes:

The petrol price sharing arrangements allow for the private and very frequent exchange of comprehensive price information between the major petrol retailers. The ACCC is concerned that this allows petrol retailers to quickly signal price movements, monitor competitors’ responses, and react to them.

We're not likely to see a major outcome from this for a while; the announcement notes that the investigation will take "some time". However, the mere fact an investigation is taking place may put petrol retailers into "best behaviour" mode, which might mean we see bursts of actual competition, not co-ordinated pricing cycles.

The most recent investigation into petrol prices by the ACCC suggested that petrol prices rose by eight cents a litre last year. If you're trying to save money, it definitely helps to buy on the "cheap" days, but you need to recognise that these change over time. The ACCC offers a weekly update on which days are cheapest in major capital cities.

ACCC


Comments

    Ultimately, this article could be retitled to "What the ACCC WILL do about petrol prices" and summed up into one word: Nothing.

    When it comes to fuel, the ACCC talks tough, but it can't walk the walk.

      Yep, exactly. Toothless pussy cats. May as well sack the lot of them and just leave Today Tonight to do a better job.

        indeed, i dont understand why they exist, if they are unable to enforce their rules.....

        kinda like having a cop who asks you nicely to stop killing people

          kinda like those rent-a-cops at shopping centres...

        Coming up on Today Tonight - How petrol is murdering you and your family. And is this Australia's worst builder? We follow the story of a 10 year old builder who used glue to construct this family's home, then demanded "a kajillion dollars" for his shoddy work.

      The problem isn't the ACCC. It's that it's incredibly difficult to prove collusion under the Competition and Consumer Act (and the Trade Practices Act before that). There have been very few successful prosecutions, and the ACCC know not to bother bringing a case if they have insufficient evidence. It's either that or waste taxpayer funds on ultimately futile cases. This is why they're focusing on whistleblower immunity, to encourage people within to provide sufficient evidence.

    Price cycles for fuel are fucking stupid. There shouldn't be any!

    around my area for the whole week the price appears to have been sitting around $1.50 on average. begining to think that getting some cold weather gear and HTFU and ride to work and sell my car.

      that is what i have done - cant afford the petrol anymore on my crappy wage - only 50k after tax :(

      note that you will get warm really quickly when riding, so might not beed the cold weather gear afterall - saving more $ :)

        Heh, try $50k (including super) before tax, with a couple of kids; everyone does what they can to get by :)

        We all know that fuel is a finite reserve, and we know that demand for it is the highest it's ever been (and likely to only continue to grow); but I struggle to understand how fuel prices have gained ~50% over the last 5-10 years.

          http://inflationdata.com/inflation/inflation_rate/historical_oil_prices_table.asp

          Oil prices have gained rapidly (as a result of high demand and supply constraints). Petrol is made of oil. So petrol prices have gained.

          A few years ago, we might have been confident that this would continue as cheaply-obtainable oil reserves ran out. Unfortunately, that's less certain now as shale oil other more 'difficult' oil sources are coming onstream. Couple that with redneck governments in the ascendancy here, and I think we'll see huge amounts of oil exploration in Australia. That might mean cheaper fuel sometime in the next few years.

          I say 'unfortunately' because the same redneck governments won't protect our aquifers (short-term issue), farmlands (medium-term issue) or atmosphere (long-term issue). The only thing that might protect us now is a serious economic downturn (which always reduces fuel use). But it's unlikely if such happens it'll last long enough to do much good. Bye bye water, food, and planet.

            Typical unthought-out babblings of a leftist greenie. You're speculating about stuff you believe the government will do in a situation that hasn't even began to arise yet.

              Leftist greenie? Probably a Jewish CIA-backed commo, too, eh? 'Aint tribalism great?
              In QLD CantReadCampbell has already started dumping environmental regulation where his miner mates require it; even delisting forests as containing protected species, by administrative fiat (without research).

              It's hardly *speculation* to suspect that most governments will privilege short-term economic/mining interests over issues that will play out over durations longer than a couple of government terms. It's the norm. For both sides of politics, but Lib/LNP governments are just more extreme on that front.

        I wish I only got $50k after tax, I wish I got $50k before tax even

          if you want it, go get a job holding a stop sign in construction - easy money (although very boring job)

          pretty much any job that requires you to wear a high visibility vest will give you more then $50k a year.

        Let me guess, your parents paid for you to go to University and everything?
        *Only* 50k after tax? Tell me how hard your life is.

    The website mentioned also only indicates the lowest/highest prices retrospectively.
    I would like to see how average Joe is going to fill up retrospectively or trying to gage which day the price will go up.

    As a side note also on the website in very small print it says: Vision impaired users can ring 1300 302 502 for a verbal description of this chart. (http://www.accc.gov.au/content/index.phtml/itemId/860639)
    I figured that by the time the vision impaired saw this, it would have seen the chart too, unless they used text-to-speech of course. I do applaud the effort though, don't get me wrong.

    so all fuel is bought on consignment from wholesalers, meaning the price changes on a whim, not on the actual cost of any specific load of fuel. if they can do that, then they oblt have to watch the outlets and match prices accordingly. they will always cover their costs and dint need to be cut throat.

    What do you expect the ACCC to do?

    Hmmm ... 'Today Tonight'. Most probably didn't read the article. More likely couldn't read the article. Just sayin' ...

    Fuel in the aviation industry follows monthly price cycles...

    What a waste of time and mental energy. Petrol in Australia is already priced too low -- lower than most developed countries, and not acting as a disincentive for people to drive (the only rational basis for petrol pricing).

    The only reliable strategy for reducing petrol costs is to *use less petrol*!!

      people need petrol to go about their daily lives mate, you cant put it out of the reach of the masses.

      now if we were all driving 100% electric cars it would be a different matter

    We just got home from Thailand. Petrol is selling there for a tad over a dollar per litre.

      Yea, i got back a month ago - was amazed how expensieve it was compared to everything else over there!!!!

    Working in the petrol market for a couple of years, I learned a few tricks when it comes to filling up at the pump.

    - On average the best day to fill up is Wednesday morning. At BP, my former employer, the price would always rise on Thursday to get the people filling up for weekend getaways.

    - Never go out of your way for those 4c off discount coupons. They are never worth the extra effort.

    - Always fill your tank and top off when price is low or as needed. This will help prevent those times when you're running on empty but the price has skyrocketed to 1.60 a liter.

    - Try to fill your car in the morning. Petrol, being a liquid, is affected by the temperature and the colder the petrol is, the denser it is per liter thus giving you a slight advantage.

    - Always maintain your car's tyre pressure! Under-inflated tyres lead to reduced fuel efficiency.

    I Live in a University town, were the majority of cars are older models driven by students, and they decide to no longer sell regular unleaded petrol, meaning my 1999 Hyundai has to take Premium petrol which costs me as of last week $165.9 a liter. Explain the logic in that to me.

      too bad, because you car will not be benifiting from that petrol either!

    Doesnt the ACCC threaten this shit at least once a year? Right after a drastic price jump?
    This year it comes right after Anzac day when prices hit a smidgen under 160c/litre.

    This always confuses me - the talk of petrol companies signalling price changes to their competitors. Legally, they have to display their prices on a giant sign outside their business. There's no other product in the market that legally requires that. How much more signalling could there possibly be?

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