City motorists enjoy cheap fuel, but can it go lower?
Ultra-low petrol prices in capital cities are set to stay low, and the Australian Competition and Consumer Commission is warning fuel retailers in smaller cities and regions to step up too.
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Petrol prices plunging towards 20-year lows are prompting motorists to wonder just how cheap our fuel can get.
The answer, according to those in the know, is not too much further in the capital cities where fuel has already dipped below 90c a litre.
Other capitals and regional areas still have some way to go, and pump prices are likely to stay low for months.
The cost of filling a family car or SUV has already dropped about $30 since last year.
While negative crude oil prices grabbed international headlines late last month, the current oil price near $US20 a barrel represents about 20 per cent of the retail cost of a litre of fuel.
Australian Competition and Consumer Commission chair Rod Sims said government fuel excise plus GST – currently totalling about 50c per litre – ensured there was a floor on pump prices.
“I doubt we will get, on average, prices much below 80c,” he said.
“I don’t think they have got much further to fall in places like Sydney, Adelaide and Perth.”
However, Melbourne prices were averaging around 93c last week and should come down more, Mr Sims said, and in smaller cities such as Darwin, Hobart and Canberra prices were taking “way too long” to drop.
He said the ACCC had been calling out slow-to-act petrol retailers in metropolitan and regional areas. He said that, combined with public pressure, should force prices lower in places that still charged more than $1.15.
Motorists should also use government or commercial price monitoring apps and websites to check where cheap fuel is.
In several capital cities today there are price differences between retailers of up to 40c a litre.
“You can certainly save money by using those apps,” Mr Sims said.
Motorists should understand that the most expensive prices were charged by service stations in the most convenient locations, he said.
“We have a monitoring role given to us by government – we have no price control powers,” Mr Sims said.
CommSec senior economist Ryan Felsman said he expected pump prices to fall to their lowest levels since the early 2000s, back when the oil price was last below $US25 a barrel.
“I would be surprised in the next month if we don’t see prices drop to that 2002 level of low-80 to mid-80 cents per litre,” he said.
“The only we way we would get prices lower is for the government to decrease those taxes.
“With excise of 42c a litre plus GST it’s difficult to get prices much lower than 70c-to-80c a litre even if things go pear-shaped from here.”
WHO GETS A CUT OF A LITRE OF PETROL
(Based on 92.4 cents per litre )
49.6 cents - Tax, including GST
20.0c - Petrol from refinery
12.5c - Retailer costs and profits
10.3c - Shipping, import, storage
Source: ACCC
Originally published as City motorists enjoy cheap fuel, but can it go lower?
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