ACCC monitoring of petrol prices has found significant falls in retail prices in the major capital cities a week after the cut in fuel excise came into effect.
The fuel excise cut, announced in last week’s Federal Budget, is being passed on in full by wholesalers through reduced wholesale prices to retailers, ACCC analysis shows.
“Over the next weeks, as petrol stations use up their stocks of fuel on which the higher excise had already been paid, we expect the reduced wholesale price to be passed through at the bowser everywhere,” ACCC Chair Gina Cass-Gottlieb said.
Between 29 March and 5 April 2022, average daily regular unleaded petrol prices fell by between 25 cents per litre (cpl) and 27 cpl in Sydney, Melbourne and Brisbane, by around 31 cpl in Adelaide, and by 35 cpl in Perth.
Already the reduction in excise has been largely passed on to lower prices at the bowsers in these cities. Retail prices are influenced by a number of factors including the level of excise tax as well as reflecting movements in international refined petrol prices, and the foreign exchange rate.
“Despite the various factors impacting the fuel price, our analysis indicates that clearly a major part of the reduction in excise has already been passed through in the major capital cities.”
Prices have also fallen in the smaller capital cities (Canberra, Hobart and Darwin), dropping by between 19 and 24 cpl so far, while prices in many regional centres are also lower. For example, in Cairns and Launceston, petrol prices have fallen by about 24 cpl, and Armidale prices are down by 15 cpl in one week.
We are also seeing a reduction in diesel prices in many locations reflecting the cut in excise, but by not as much as petrol. This may reflect that turnover of diesel is often longer than turnover for petrol.
“It will take some time for petrol stations with lower turnover to use up existing stocks of petrol and diesel, and restock with fuel at the reduced wholesale price that takes account of the excise cut,” Ms Cass-Gottlieb said.
The ACCC has contacted major fuel wholesalers and retailers to set out its expectations that the full cut in fuel excise will flow into reduced retail prices as soon as possible.
On 30 March 2022, the day the excise was reduced, Viva Energy announced an immediate reduction of 10 cpl in prices at Coles Express service stations.
“This is a good example of competition at work and may have contributed to the sudden retail price falls in many locations,” Ms Cass-Gottlieb said.
“We encourage consumers everywhere to use fuel price comparison websites and apps which provide real time information about prices at individual petrol stations before deciding where to fill up. Consumers in the largest cities which have a regular price cycle should also consult the price cycle information on the ACCC website,” Ms Cass-Gottlieb said.
“Consumers who fill up at independent chains will generally save compared with those who shop only at major-branded petrol stations. Motorists who shop around can save money but also support competition between retailers, which helps to keep prices competitive.”
“We will continue to monitor the petrol prices to determine how the cut in excise is being passed on.”