For the first time in almost two years, average retail petrol prices in Australia’s five largest cities fell in the latest quarter, dropping by 10.3 cents per litre (cpl) from the June quarter 2022 to 177.7 cpl in the September quarter 2022, the ACCC’s latest quarterly petrol monitoring report says.
This drop reflects a 34 per cent fall in international refined petrol prices, as monthly average Mogas 95 prices, which is the Asia-Pacific benchmark, decreased from 138.7 cpl in June 2022 to 91.6 cpl in September 2022. This reflected weaker global demand and concerns about a looming global recession.
As in previous years, agreements by the OPEC cartel and other oil producing countries (including Russia) to limit supply, the impact of the COVID-19 pandemic, and the Russian invasion of Ukraine have been largely responsible for the changes in crude oil prices.
“While international factors drove up prices steeply earlier this year, they contributed to price drops in the September quarter,” ACCC Deputy Chair Mick Keogh said.
Monthly average retail petrol prices in the five largest cities and Mogas 95 prices in nominal terms: January 2020 to September 2022
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Source: ACCC calculations based on data from FUELtrac, Argus Media and the Reserve Bank of Australia
Notes: The shaded area represents the September quarter 2022.
The decrease in retail prices in April 2022 reflects the temporarily cut in fuel excise.
Petrol prices in most locations did not increase by as much as the restored excise amount
On 29 September 2022, the full fuel excise was restored, after being halved for six months from 30 March 2022 by the then Australian Government. Fuel excise is charged on wholesale fuel prices, and changes feed through to retail prices after a lag period, which varies between outlets depending on stock levels and retail turnover.
Prior to, and after, the restoration of the full fuel excise from 29 September, the ACCC communicated with industry, state and territory governments and consumers (via the media, the ACCC website and social media) about its expectations about price increases following the restoration of excise. The ACCC has closely monitored price movements including in the period before the excise was restored in full and in the six weeks afterwards to allow for the lag in retail prices.
The monitoring has shown that after 29 September, retail petrol prices in most locations increased by less than the expected 25.3 cpl from the excise restoration.
“We have looked at the impact of the excise being restored, and, allowing for movements in international prices and the price cycles in the major cities, we found only a small number of unexpected increases in average retail petrol prices,” Mr Keogh said.
The existence of petrol price cycles in the five largest cities means that the impact of the restoration of the full excise on retail petrol prices may not be clear to motorists.
In Sydney, Melbourne, Brisbane and Adelaide daily average petrol prices increased by between 15.9 cpl and 21.9 cpl between 28 September and 9 November. Price cycles in all four cities peaked in the days before, or just after, the restoration of the full fuel excise and then generally decreased in the following weeks as part of the regular price cycles.
In Perth, average petrol prices increased by 34.1 cpl in the six weeks after the excise was restored. However, the restoration of the full fuel excise coincided with the increasing phase of its petrol price cycle. Perth’s average prices often increase by between 25.0 cpl and 30.0 cpl during the increasing phase of its price cycle, before falling again.
In the capital cities without price cycles, prices increased by between 11.7 cpl (Canberra) and 23.2 cpl (Hobart). In regional locations the average increase was 18.0 cpl.
ACCC analysis found that there were 18 regional locations which had price increases above 25.3 cpl. There were a couple of locations where the retail price increases were higher than the combined increase in excise and international prices. The ACCC is undertaking further examination of these locations.
September quarter prices in smaller cities and regional locations also dropped
Over the September quarter, average retail petrol prices also decreased in the smaller capital cities, Hobart by 10.5 cpl, Darwin by 3.4 cpl and Canberra by 1.3 cpl, though prices remained generally higher than in the five larger capitals.
Average retail petrol prices in regional locations were 186.9 cpl in the quarter, a fall of 6.2 cpl from the June quarter 2022. Regional prices were 9.2 cpl higher than average prices in the five largest cities.
The ACCC welcomes the fuel price transparency scheme in the ACT
The ACCC has long supported fuel price transparency schemes which can help consumers save money on fuel and promote retail competition. In early November 2022 the ACT and New South Wales governments agreed that the NSW fuel price transparency scheme (FuelCheck) would expand to include retail sites in the ACT.
“This is welcome news for motorists in the ACT, who can now access real-time and comprehensive fuel price information through the NSW FuelCheck app and website,” Mr Keogh said.
This leaves Victoria as the only jurisdiction without a real-time and comprehensive fuel price transparency scheme.
Diesel prices were higher than petrol prices
As shown in the diagram below, average retail diesel prices were significantly above average retail petrol prices in the five largest cities in the September quarter 2022.
Source: ACCC calculations based on data from FUELtrac
Note: The numbers in the diagram are cents per litre.
Six weeks after the full excise restoration, amid rising wholesale diesel prices, daily average diesel prices in the
capital cities increased by between 29.0 cpl (in Hobart) and 37.6 cpl (in Perth). The average increase in all regional locations was around 32.0 cpl.
However, the increase in retail diesel prices in the six weeks after the full excise restoration was no higher than the combined impact of the restoration of the full excise and the increase in wholesale diesel prices due to the external factors.