Fuel rip-off hot spots identified across Australia

Published 29 October 2013

petrolOnly an effective government-led fuel watch pricing agency will have any impact on the rapid increase and subsequent slow decrease in the price motorists pay at the bowser, a review of fuel pricing data by UNE Business School has found.

Professor Abbas Valadkhani says the study clearly identified the phenomenon of pump prices rocketing up when the cost of crude increases, while the downward price pressure is much slower, descending like a feather.

“We looked at 111 locations across Australia covering the daily and weekly data for the period (2007-2012) and it appears that the vast majority of petrol stations are doing the right thing, however around a quarter of the service stations reviewed were participating in this rocket/feather pricing.”

“The only place where everyone is doing the right thing is in Western Australia. While we can’t prove the connection, Western Australia is the only state with a Government backed Fuel Watch body.”

Professor Valadkhani says the impact of large numbers of independent retailers in South Australia can be seen with a much quicker return to ‘normal’ in that State after any sudden retail petrol price increase.

He says the study conducted by the UNE Business School compared like with like, looking at petrol stations facing similar transport costs to determine a list of 28 places where motorists were more likely to be ripped off at the pump.

These locations are: Ararat, Benalla, Bendigo, Brisbane Metro, Broken Hill, Burnie, Campbell Town (TAS), Canberra Metro, Casino, Charters Towers, Coffs Harbour, Cooma, Dubbo, Emerald, Forster, Gladstone, Gold Coast, Goondiwindi, Hobart Metro, Longreach, Maryborough, Mt Isa, Newcastle, Port Lincoln, Port Macquarie, Roma, Tennant Creek, and Yarrawonga.

Professor Valadkhani says identifying exactly who is profiting from this sudden price rise and very slow price decline pattern will be the subject of more research by UNE’s Business School.

“The reason we see petrol stations ripping motorists off is simply because they can, the evidence is clear that only effective government regulation and monitoring can ensure petrol stations ‘do the right thing’.

“Until the ACCC decides that they should actually be looking at petrol prices, motorists will continue to pay more at the pump.”