Victoria’s first petrol price app could increase prices but is still worthwhile: report

An app displaying real-time fuel prices at Victorian petrol stations will cost about $2.4 million a year to run and may save customers only $5 or $10 a year – and could contribute to price increases – but will still be worthwhile, research has found.

The Allan government wants to publish up-to-date fuel prices on the Service Victoria app to save drivers time in finding the cheapest petrol. The scheme would cost the government $1.3 million and the industry $1.15 million per year to run, totalling an annual $2.4 million.

Ben Wrigley thinks petrol is a bargain but still seeks out the cheapest prices. Credit: Eddie Jim

Consultants asked by the government to assess the plan say it’s unclear whether it would decrease costs for consumers — or increase them.

Some fuel price transparency schemes lead to cheaper prices, while others lead to higher prices, advisory firm Sapere said.

But Sapere concluded that real-time price disclosure would still be worthwhile by saving motorists time.

“On balance, we expect that in the medium to long-term there will be net benefits,” it said in its recent regulatory impact statement.

Consultants said it was unclear whether real-time price disclosure would cut or increase petrol prices.Credit: Matthew Absalom-Wong

Victoria is the only state or territory without a fuel price transparency scheme. The Australian Competition and Consumer Commission, which monitors the retail price of unleaded petrol, diesel and LPG, found Melburnians could have saved $333 by comparing petrol prices in 2023.

Unleaded prices currently range from as low as $1.49 a litre to as high as $2.09 a litre. It takes about 6½ weeks for Melbourne’s petrol prices to move from a low point to a peak and back to a low point.

Under the government’s plan, fuel retailers would have 30 minutes to tell Service Victoria every time they cut or increase prices. The Service Victoria app would then publish that information for consumers.

Mark McKenzie, chief executive of the Australasian Convenience and Petroleum Marketers Association, said while there was no evidence that fuel price apps reduced overall prices, they empowered consumers to shop around. “They create tension in the market and reward those who discount,” he said.

How to cut fuel costs

• Use comparison sites to identify when prices are lowest
• Put in a higher-performing fuel on cheapest days
• Consider storing fuel in case of an emergency
• If customers must fill up when the fuel price market is peaking, they should top up only
• Regularly service car
• Don’t ignore an engine light
• Check tyre pressure regularly
• Avoid excess weight or loads in the car
• Remove roof rack if not needed
• Turn down windows rather than use airconditioning when travelling at low speeds
• Drive smoothly
• Try to avoid driving in peak hour
• Catch public transport instead
• Turn off the engine at red lights or prolonged stops. 

Source: Compare the Market, RACV

Bendigo freelance photographer Ben Wrigley said petrol prices were cheap when considering the work of extracting crude oil and its environmental impact. “In the late ’90s, I was paying 70¢ a litre,” he said.

“It’s just cheap as chips.”

That’s not to say Wrigley doesn’t shop around. On Monday, he paid $1.69 a litre in Carlton, and he regularly seeks out a petrol station in Bendigo that is 5¢ to 10¢ cheaper than other retailers.

“Using apps, I wouldn’t bother,” he said.

Bill, Johnny and Danny Jorgovic of independent petrol retailer and mechanics, BJK Service Centre.Credit: Simon Schluter

McKenzie said data collected by Service Victoria should be shared with third-party publishers such as the RACV, MotorMouth and Petrol Spy, rather than just the Service Victoria app. Price comparison apps published data from 60 per cent of Victorian petrol stations, Sapere estimated.

BJK Service Centre, an independent petrol and mechanic businesses in Frankston South, attracts customers by publishing its prices on Petrol Spy.

“When we have a really good price compared to the competition we definitely will notice a lot of new faces,” said Johnny Jorgovic, who works at BJK with his family.

“We use that to check on our competitors or take a quick drive around to see if there’s any sudden movement and try to adjust where we can,” he said.

Shadow Minister for Consumer Affairs Tim McCurdy said real-time price disclosure was “not a proven method of reducing petrol prices and may even result in motorists paying more at the bowser”.

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