Why The Woolworths Petrol 14 Cents Off Deal Isn't A Great Money Saver

Woolworths has just announced a scheme where you can get up to 14 cents off the per-litre price for petrol at its outlets. That might sound tempting — but it pays to do the calculations carefully, because the chances are the savings will be illusory.

Picture:

Like arch-rival Coles, Woolworths already runs a scheme where you can get 4 cents a litre off petrol in its outlets if you have spent more than $30 at one of its supermarkets. It is now offering an additional deal: spend $10 in the store at the fuel outlet and you'll get an additional 10 cents off each litre. Combine those and you're potentially saving 14 cents a litre. The offer runs until February 4.

Falling oil prices have meant that there's a widespread expectation that petrol prices will fall this year, and we have seen cheap prices already in some locations. From that viewpoint, the Woolworths move seems cynical: you can have cheaper petrol, but only by handing over more money. You're not seeing the benefit of a price reduction automatically; you have to pay for it.

And when you do the analysis, you realise the savings are quite likely to be illusory. Let's presume that you fill up with 50 litres (which is close to a full tank). That will save you $5 — but you'll have to spend $10 to do so. Your total spend is higher than if you hadn't aimed for the discount.

Not only that, you'll have to spend $10 at service station prices, which are considerably inflated relative to supermarkets themselves. The chances are very good that if you purchased that bread and milk, or that bottle of Coke and packet of chips, at the supermarket, you would save as much or more than the "discount" offer gets you. (Note also that cigarettes and tobacco are not eligible.) You might have better odds purchasing a magazine or newspaper, which have standardised prices — but even there, subscribing will be cheaper if you're serious about saving money.

Spending $30 in a supermarket isn't difficult, so that 4 cent saving is welcome. I'm a lot less persuaded that spending an extra $10 to save $5 makes good financial sense. Buying when petrol is cheapest from whoever has it cheapest will save you more in the long run.

Woolworths has 24 per cent of the local fuel market (equal with Coles), so it's to be expected that some consumers will be tempted by this offer. But if you're committed to saving money, do the maths carefully. Don't let the headline "14 cent" claim fool you.

Lifehacker's Loaded column looks at better ways to manage (and stop worrying about) your money.


Comments

    Easy. Milk is the same price as in the supermarket. 5x2L gets the job done.

    If you're going to buy that same product anyway, you might as well fill up and your milk is half price (or fill up two cars, and it's essentially free - multi vehicle fills are allowed up to 150L total).

      5x2L

      Jesus... How many cats do you own?

      Yep definitely. I have a Commodore Station Wagon that I run as dry as I can before refilling (wasting time at petrol stations makes me want to slit my wrists) so I fill up on 80L or more which brings me very close to making the extra discount pay for itself.

      So if I can find something that isn't too much of an impulse purchase I'm golden. Milk and bread are your friends.

      The more you are stretching to find $10 worth of items the less additional utility you obtain (or if you aren't careful you can hit negative additional utility).

      As the article says, do the maths carefully. Or as I prefer, do the maths to the extent that doing the maths improves marginal returns. If you spend too much time doing the maths, you've glubbed up through time wasting.

      Last edited 12/01/15 11:03 am

    However if you own a larger car then these deals can work for you. The fuel discounts cap at 150 litres per transaction. So if you have a larger car you can effectively get 'free' stuff, if you are going to buy the fuel there anyway why not take advantage. So when I fill up my big tanked 4WD I can spend $10 in store and still save 9c per litre. Sounds like an alright deal to me.

    Let's not forget what all this is doing to the competition either!

    Our family drinks lots of milk. Buying 10 litres at $1 is well within our usage pattern. It makes sense then.

    Otherwise I agree with the conclusion.

      but do you really want to buy that woolworths swill branded milk that rips off Farmers... no thanks!

        Yes, yes I do.

        I also wholeheartedly encourage the milk wholesalers to move away from a profit system that relies on 'premium' branding for the same product.

        I used to fap to the Pura brand because of advertising and nostalgia, but I moved on. A lot of people are doing so and it's usually considered a good thing. Wholesalers need to keep this trend in mind when negotiating their next contracts.

        Last edited 12/01/15 11:07 am

    Are cigarettes the same price at servos?
    Smokers can make up that $10 with just half a pack of fags.

    I only have a 30L tank, when I get delivery of my new car it won't have a fuel tank at all.

      You didn't rtfa, did you?

        Nope. But then again Gizmodo and Lifehacker aren't known for accurate reporting even on their best day.

    One thing you can do, is if you have a prepaid phone, you can buy a voucher at the service station to make your purchase. They are the same price as the supermarkets, and it will be something you use.

      I guess this would probably work with paper travel tickets at well. I usually buy mine at Woolworths to get the 4c fuel discount, might as well buy it at the servo to get 10c instead.

    Another way to look at this deal - "Your minimal $10 purchase will translate into $4 purchase, fuel price remains discounted at 4c."
    Say you're filling up 60L of fuel, then the additional 10c off will translate to -$6 to your additional in-store purchase. So when you want something there, just think "I will get $6 off - is it worth it?"

      Exactly. That's the easiest way to do it.

    You could convert those supermarket fuel discount dockets into real fuel in your tank with a free fuel calculator like the Bowser Buster Supermarket Discount Fuel Coupon Calculator. See www.bowbus.com/

    Bowser Buster

    We just did a road trip up the Newell from Melbourne to Queensland and I'll be damned if l could find a Woolies petrol station on the way. Coles/Shell all the way. Good thing we had some of those dockets too.
    One startling observation: unleaded petrol $1.56/litre at Coles/Shell at Boggabilla and $1.38 two kilometres down the road at Coles/Shell in Goondiwindi! Saved an extra $10 by trying for Goondiwindi.

    Weren't the super markets made to stop offering (deceptive) deals to boost the fuel discount, I'm guessing the at the servo spend part gets them around that

    I'll just leave this here...
    https://www.youtube.com/watch?v=ihQ1CxY_CGg

    Another thought, if you use a prepaid mobile phone, you could purchase your prepaid phone voucher at the same time, especially if you are only a couple of days out. I did that today, with a pump price of $1.079, and walked out paying 93.9c/litre on 43 litres of fuel, as I already had a 4c docket. Discounts were: 4c/Docket $1.75, Spend $5/4c - $1.75, Spend $10/6c, $2.63, thus a $6 savings, and with a voucher I had to buy anyway! Without the docket, you'd still be near $4.50 on the same quantity.

    Having never used vouchers yet. Woolies let you buy $30 of groceries then allow you to fill your car with $100 of fuel and discount the entire $100 of fuel? Or do they only give you back an equivalent discount on only the $30 spent. We live in the country so fuel is always dearer, and thinking 70litres at $1.50/l would give me $2.80 off at 4 cents. This would be close to their profit margin?

Join the discussion!

Trending Stories Right Now