In tough economic times, Australian drivers are being told to keep an eye out for a significant drop in fuel prices following a recent fall in international crude oil costs.
Over the coming weeks, the ACCC says it will be closely monitoring retail petrol price movements in Australia to see whether service stations are following suit by reducing their fuel prices to benefit customers.
Weekly average crude oil prices saw a 20 per cent decrease per barrel in the first two months of the year while international refined petrol prices have fallen by a similar amount. In February, the average retail price for petrol in the five largest cities in Australia – Adelaide, Brisbane, Melbourne, Perth and Sydney – sat at 1.41 cents per litre which was around 8.2 cents per litre lower than prices in December 2019.
Following this gradual decline, last week saw a sharp fall of a further 22 per cent per barrel which is expected to heavily influence service station prices if sustained. However, customers shouldn’t hold their breath as changes in international prices generally take a week or two to be reflected in retail prices in larger capital cities and even longer in smaller cities and regional areas.
Speaking to Prime Minister Scott Morrison this morning on 2GB, Alan Jones said that Australians don’t deserve to be ripped off by fluctuating prices for unleaded fuel as the entire country is already experiencing a tough financial period. Morrison responded saying he would be leaving the job of monitoring petrol prices up to the ACCC.
“Well I’ll raise that with Rod Sims at the ACCC,” he said. “We know where oil prices have gone over the last few weeks. And so I’m sure he’s taking a closer look. He’s the cop on the beat on that. So I’ll let him do his job on that. And we’ll get about the job of keeping Australians safe and we’ll do everything we can to keep them in jobs and businesses in business.”
Meanwhile, Chairman of the ACCC Rod Sims has assured that the regulatory body will be looking very closely at the market. He said that following the predicted fall in retail prices, they plan to name and shame any retailers that are not passing cost reductions on to consumers and are instead continuing to provide unnecessarily high prices at the petrol pump.
“The ACCC cannot control the petrol prices companies set but we can call out problematic price setting which can influence company behaviour,” he said. “At this time the Australian economy needs all the assistance it can get, and lower world oil prices are one of the few positives from current world events. Hopefully, the recent break between Russia and OPEC marks the start of the waning influence of this dreadful cartel on international crude oil prices.”
According to the ACCC’s latest quarterly petrol monitoring report, the average retail petrol price in December was up by 7 cents per litre on the September quarter in all five of the major cities in Australia. This was heavily due to increases in international refined petrol prices due factors such as oil producers cutting production, US-China trade talks and increased demands for oil imports by China.
“The international price of refined petrol and the tax component, which account for more than 80 per cent of the retail price, remain the largest factors in the price we pay at the pump,” Sims said.
Consumers looking to find the cheapest petrol rates in their city should be taking advantage of petrol price apps and government-run comparison schemes that do all of the hard work for them. In 2019, the RACQ estimated that Queenslanders using the government’s fuel transparency scheme had saved more than $120 million in total in its first year of operation.