Coronavirus slowdown puts brakes on Adelaide petrol prices
Petrol prices have tumbled to their lowest levels in years as the world shuts down and workers shut themselves in.
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One in every five Adelaide petrol stations is selling unleaded petrol for less than $1 per litre as they struggle to compete for motorists’ attention.
By 11am on Thursday MotorMouth revealed its data showed “22 per cent of servos in Adelaide are currently selling unleaded for 99.9 cents per litre or less”.
RAA spokesman Mark Borlace said wholesale fuel prices had crashed in the last week and petrol stations had failed to sustain the regular price spike in the market that some had tried to begin last week.
“Mid last week they tried to spike the price but it only got to 139c/L and everyone bailed and the terminal gate price was in free fall,’’ he said.
“The terminal gate price has dropped 25c/L in the last two weeks. The average in Adelaide is now 109c/L but there are many stations selling for under $1.’’
Adelaide unleaded petrol last sold for 99c/l in November last year, but only at a small number of outlets.
Mr Borlace said the oil industry had become a victim of one of the early side-effects of the coronavirus.
“The dominoes have fallen. The Russians and Saudis were fighting over price, the Caronavirus hit and demand from airlines and shipping crashed, and prices are in free fall,’’ he said.
“We think as long as there is a lack of demand the low prices should last for a couple of months.’’
Today, the wholesale unleaded petrol price in Adelaide is 105c/L, more than many petrol stations are selling for.
Australasian Convenience and Petroleum Marketers Association spokesman Mark McKenzie said low wholesale price was only one factor in the discounting war, which was driven by Adelaide’s highly competitive market.
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“Oil price is only 30-35 per cent of the price you pay at the pump,’’ he said.
“Also what is happening is that there is a concern about a drop off in demand in Adelaide and several other markets, because people are worried the coronavirus will cut demand.
“Petrol stations are trying to keep their cash levels and volume of sales up and are using a very deep level of discounting to do that.
“These low prices at the bowser could never be sustained because you are just losing money but if your choice is going to be sell at a slight loss or just lose totally, then most retailers will just go into their cash reserves and try to bring some cash in at a low sale price.’’