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Report on the Australian petroleum market—December quarter 2016
February 2017
www.accc.gov.au
ISBN 978 1 920702 04 5
Australian Competition and Consumer Commission 23 Marcus Clarke Street, Canberra, Australian Capital Territory, 2601
© Commonwealth of Australia 2017
This work is copyright. In addition to any use permitted under the Copyright Act 1968, all material contained within this work is provided under a Creative Commons Attribution 3.0 Australia licence, with the exception of:• the Commonwealth Coat of Arms• the ACCC and AER logos• any illustration, diagram, photograph or graphic over which the Australian Competition and Consumer Commission does not hold
copyright, but which may be part of or contained within this publication.
The details of the relevant licence conditions are available on the Creative Commons website, as is the full legal code for the CC BY 3.0 AU licence.
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Important notice
The information in this publication is for general guidance only. It does not constitute legal or other professional advice, and should not be relied on as a statement of the law in any jurisdiction. Because it is intended only as a general guide, it may contain generalisations. You should obtain professional advice if you have any specific concern.
The ACCC has made every reasonable effort to provide current and accurate information, but it does not make any guarantees regarding the accuracy, currency or completeness of that information.
Parties who wish to republish or otherwise use the information in this publication must check this information for currency and accuracy prior to publication. This should be done prior to each publication edition, as ACCC guidance and relevant transitional legislation frequently change. Any queries parties have should be addressed to the Director, Corporate Communications, ACCC, GPO Box 3131, Canberra ACT 2601, or [email protected].
ACCC 02/17_1152
www.accc.gov.au
Contents
Key messages 1
1 Developments in the petroleum industry 5
1.1 OPEC agrees to first oil production cut in eight years 5
1.2 Caltex Australia to acquire Milemaker Petroleum 5
1.3 BP Australia to acquire Woolworths’ fuel and convenience sites across Australia 5
1.4 NSW IPART finalises its review into wholesale ethanol pricing 6
1.5 Queensland ethanol mandate 6
1.6 BP agrees to renew its State Agreement for the Kwinana refinery 6
1.7 Availability of fuel price data increased significantly in 2016 and was increasingly used by motorists 6
2 ACCC activities 10
2.1 ACCC and the petrol industry 10
2.2 Activities during the December quarter 10
3 Retail price movements in the capital cities 12
3.1 Retail prices over the year to December 2016 12
3.2 Retail prices compared with Mogas 95 prices 12
3.3 Gross indicative retail differences in 2016 13
3.4 Retail prices in Brisbane remain the highest among the five largest cities 14
3.5 Price cycles in the five largest cities 15
3.6 Prices in the three smaller capital cities 18
3.7 Retail prices of the different petrol grades 18
3.8 Petrol prices in Australia and other OECD countries 19
4 Retail price movements in regional locations 22
4.1 Influences on regional petrol prices 22
4.2 Regional petrol prices in aggregate 22
4.3 Prices in each of the states and the Northern Territory 23
4.4 Darwin petrol market study 26
4.5 Launceston petrol market study 28
4.6 Armidale petrol market study 30
5 International price movements 32
5.1 Crude oil and refined petrol 32
5.2 AUD–USD exchange rate 35
6 Diesel and LPG prices 37
6.1 Diesel price movements 37
6.2 LPG price movements 37
Appendix A—Petrol pricing information apps and websites 39
Appendix B—Petrol price data 49
1 Quarterly report on the Australian petroleum industry—December 2016
Key messages
Retail petrol prices in the five largest cities increased in the December quarter 2016
In the December quarter 2016 average retail petrol prices across the five largest cities (i.e. Sydney, Melbourne, Brisbane, Adelaide and Perth) were 122.0 cents per litre (cpl). This was an increase of 7.8 cpl from the September quarter 2016 (114.2 cpl).
Retail prices in Brisbane remained the highest of the five largest cities and the differential increased in the December quarter 2016. The average retail petrol price in Brisbane in the December quarter 2016 was 125.1 cpl, which was 3.8 cpl higher than the average across the other four largest cities. This differential was 2.5 cpl higher than in the previous quarter (1.3 cpl).
As part of the ACCC’s Cairns regional market study, late last year the ACCC wrote to the major petrol retailers in Brisbane seeking an explanation for the higher prices in Brisbane compared with the other four largest cities. Responses will be included in the Cairns report, expected to be released in the first half of 2017.
The OPEC cartel agreements in late 2016 led to increases in international prices
In late-November 2016 the Organisation of the Petroleum Exporting Countries (OPEC) announced an agreement to decrease crude oil production by around 1.2 million barrels per day (bpd) from 1 January 2017. This was the first time since 2008 that the OPEC cartel had agreed to limit production. In addition, in mid-December 2016 the OPEC cartel announced a further agreement with a number of non-OPEC countries (including Russia) to reduce production by around 600 000 bpd.
These announcements led to an increase in international crude oil and refined petrol prices. Between mid-November and the end of December 2016 international refined petrol prices increased by around 10 USD. Although the decreases in production were not to occur until January 2017, crude oil prices increased following the announcement as the market became concerned about ongoing supply. Australian wholesale prices reflected this increase, as well as the influence of a decrease in the AUD–USD exchange rate.
The increase in international crude oil and refined petrol prices, and the decrease in the AUD–USD exchange rate, were the primary reasons for the increase in retail prices in Australia in the December quarter 2016.
Margins increased in the quarter
A broad indicator of retail margins are gross indicative retail differences (GIRDs). These are calculated by subtracting average terminal gate prices (TGPs) from average retail petrol prices. TGPs are the prices at which petrol can be purchased from wholesalers in the spot market and are posted on a regular basis on the websites of the major wholesalers. TGPs vary across brands and across cities. TGPs reflect the wholesale price of petrol only, and exclude other retail operating costs (such as branding, transportation, and labour). As GIRDs include costs as well as profit, they should not be confused with actual retail profits.
Average GIRDs in the five largest cities increased by 0.9 cpl in the December quarter 2016 to 11.3 cpl. GIRDs in Melbourne, Brisbane, Adelaide and Perth increased in the quarter, while GIRDs in Sydney decreased. Average GIRDs in the five largest cities in the 2016 calendar year were 10.6 cpl, marginally higher than in 2015.
As noted in the September quarter 2016 report, a number of retailers have advised the ACCC that the increase in GIRDs may partly reflect actual and anticipated regulatory and compliance costs, especially in NSW. Other influences mentioned by retailers were: regulatory costs associated with the Queensland ethanol mandate (which commenced on 1 January 2017); costs
2 Quarterly report on the Australian petroleum industry—December 2016
associated with capital expenditure to maintain or upgrade sites; and increases in operating costs, freight and litigation. These factors have not been independently verified.
Availability and usage of fuel price data has increased significantly over the last year
Easy access to information about current retail petrol prices enables motorists to shop around and purchase fuel at relatively lower priced retail sites. The more information on petrol prices which is available to the public, the better informed motorists will be about when to buy petrol and from which retail site.
During 2016 a number of websites and apps were introduced in Australia which provide consumers with near real-time retail petrol pricing information. 7-Eleven introduced an app in February 2016 which provides information about retail prices at all 7-Eleven sites, and GasBuddy commenced operations in Australia in March 2016. The NSW FuelCheck website and NRMA app commenced in August 2016. The existing MotorMouth app and website were modified in May 2016 to provide near real-time prices.
These new and modified fuel pricing websites and apps joined existing ones, such as the Woolworths fuel app, and the Western Australian FuelWatch website.
Data collected by the ACCC from the operators of these fuel pricing websites and apps indicates that there has been a significant increase in the use of these tools over the last year. Usage of these websites and apps increased from around four million hits in the December quarter 2015 to around 21 million hits in the December quarter 2016.
Motorists can use these apps and websites to decide when to buy petrol and from which site. This is particularly relevant to those motorists living in cities with price cycles. During the decreasing phase of the price cycle, prices can vary between 10–15 cpl. When prices start to increase, the variation in prices can be in the region of 25–30 cpl. By timing their purchases of petrol, and choosing to buy from the lowest priced retailer, motorists filling up a vehicle with a 60 litre tank could save themselves in the region of $10–15 per tank of petrol.
The length and size of petrol price cycles have increased over the past decade in the four eastern capital cities
In 2007 petrol price cycles in Sydney, Melbourne, Brisbane and Adelaide had an average length of seven or eight days. By 2016 the average length of price cycles in Melbourne and Brisbane were over a month long, while those in Adelaide were around 26 days and those in Sydney were around 22 days. In contrast, the average length of price cycles in Perth moved in the opposite direction, decreasing from 15 days in 2007 to seven days in 2016.
Over the same period, the average size of the price cycle increase (i.e. the jump from the trough price to the peak price) more than doubled in the five largest cities. It increased from an average increase of around 9.0 cpl in the five cities in 2007 to an average of around 20 cpl in 2016.
The change in petrol price cycles over recent years has caused considerable consumer frustration, in particular because it is evident that price variations in the cycle are not cost based but reflect retailers seeking higher margins.
These changes to price cycles also highlight the importance of consumers being aware of the stage of the price cycle and, where possible, timing their purchases towards the bottom of the price cycle. This reinforces the usefulness to consumers of the increasing number of fuel price websites and apps.
3 Quarterly report on the Australian petroleum industry—December 2016
Proposed transactions in the retail sector have the potential to significantly impact the structure of the industry
Two major proposed transactions in the retail sector were announced during the December quarter 2016.
On 7 November 2016, Caltex Australia announced that it has entered into an agreement to purchase Milemaker Petroleum’s retail fuel business assets in Victoria. Under the proposed transaction, Caltex would acquire and operate 45 service stations and one site currently under development, with the majority of stations located in and around Melbourne.
On 28 December 2016, BP Australia and Woolworths announced that BP intends to acquire, rebrand and operate Woolworths’ existing 527 fuel and convenience sites, as well as an additional 16 sites currently under construction, across Australia. BP Australia said that it proposed to maintain the Woolworths’ 4.0 cpl redemption offer in the sites acquired from Woolworths, and would expand this offer to additional BP sites.
The proposed acquisition of Woolworths’ fuel and convenience sites would add to BP’s existing network of approximately 350 company-owned retail sites across Australia. The transaction is subject to approval from the ACCC and the Foreign Investment Review Board. The parties expect this transaction to complete over the next 12 months.
These transactions have the potential to alter the structure and competitive dynamics of the petroleum industry and are being closely analysed and assessed by the ACCC.
The city–country price differential decreased in the quarter
The ACCC monitors fuel prices in all capital cities and around 190 regional locations across Australia. The average differential between prices in these regional locations and prices in the five largest cities in the December quarter 2016 was 3.4 cpl. This was 2.8 cpl lower than the average differential in the September quarter 2016 (6.2 cpl).
In December 2016 monthly average prices in 81 regional locations (around 44 per cent of monitored locations) were lower than average prices in the five largest cities.
The annual average differential between regional prices and those in the five largest cities in calendar year 2016 was 4.9 cpl.
While the tax component of petrol prices in Australia is high, it is relatively low by international standards
Among countries in the Organisation for Economic Co-operation and Development (OECD), Australia had the fourth lowest retail petrol prices—both for regular unleaded petrol (RULP) and premium unleaded petrol (PULP) 95—in the September quarter 2016 (the latest data available).
The determinant of lower retail petrol prices in Australia is the relatively low rate of taxation on fuel. In the September quarter 2016 taxes represented around 40 per cent of the retail price of PULP 95 in Australia. While this is high, it is much lower than in many OECD countries (where the average tax component is around 60 per cent).
Excluding taxes, the price of PULP 95 in Australia is higher than in most OECD countries.
A degree of caution needs to be exercised when comparing international petrol prices, because fuel quality standards differ among countries, as does the availability and use of fuel types.
Darwin petrol prices remained low relative to the five largest cities
In November 2015, the ACCC released its first regional market study, reporting on the Darwin petrol market. The report noted that the average differential between prices in Darwin and the five largest cities in 2012–13 and 2013–14 was over 19 cpl. Since then, there has been a substantial decrease in the differential—it reached a record low point in the June quarter 2016 (–2.0 cpl) and remained low in the December quarter 2016 (4.0 cpl).
4 Quarterly report on the Australian petroleum industry—December 2016
In the December quarter 2016 GIRDs in Darwin were 10.6 cpl, an increase of 3.1 cpl from the previous quarter (7.5 cpl). Despite this increase, Darwin GIRDs remained lower than GIRDs in the five largest cities over the same period (11.3 cpl).
Launceston margins decreased in the quarter
The ACCC released its second market study in July 2016, reporting on the Launceston petrol market. The report found that between 2012–13 and the first half of 2015–16, motorists in Launceston paid on average around 12 cpl more for petrol than motorists in the five largest cities. In the December quarter 2016 this differential was 6.5 cpl.
Average prices in Launceston in the December quarter 2016 were 128.5 cpl, an increase of 3.3 cpl from the September quarter 2016. This increase was significantly lower than the increase in prices in the five largest cities over the same period (7.8 cpl).
GIRDs in Launceston decreased by 3.6 cpl to 12.6 cpl in the December quarter 2016. This was around 4.0 cpl lower than average annual GIRDs in 2015–16.
The differential between prices in Armidale and prices in the five largest cities decreased in the quarter
In November 2016, the ACCC released its third market study, reporting on the Armidale petrol market. The report found that relatively weak retail competition in Armidale, reflected by a lack of price discounting, contributed to prices being on average 8.0 cpl higher than those in the five largest cities between 2012–13 and 2014–15.
The differential between prices in Armidale and the five largest cities decreased by 0.9 cpl to 6.9 cpl in the December quarter 2016.
GIRDs in Armidale remained broadly stable between the September and December quarters at around 19 cpl. This is broadly similar to the annual average differential in 2014–15 (19.0 cpl) and 2015–16 (18.5 cpl).
Diesel and automotive LPG prices increased in the quarter
Diesel and automotive LPG prices in the five largest cities increased in the December quarter 2016:
• average retail diesel prices increased by 6.9 cpl in the quarter, from 118.3 cpl in the September quarter 2016 to 125.2cpl in the December quarter 2016
• average retail automotive LPG prices increased by 4.8 cpl in the quarter, from 62.1 cpl in the September quarter 2016 to 66.9 cpl in the December quarter 2016.
5 Quarterly report on the Australian petroleum industry—December 2016
1 Developments in the petroleum industry
1.1 OPEC agrees to first oil production cut in eight years
On 30 November 2016 the Organisation of the Petroleum Exporting Countries (OPEC) agreed to limit crude oil production for the first time since 2008. This involved a decrease of around 1.2 million barrels per day (bpd) from current production levels.1 Additionally, on 12 December 2016, OPEC announced that it had finalised a supply pact with 11 non-OPEC countries (including Russia). Collectively, these countries agreed to reduce production by 558 000 bpd.2
This represents around 2 per cent of global crude oil production.3 The agreement is effective for six months from 1 January 2017, and will be reviewed at OPEC’s next ministerial meeting in May 2017.
The extent to which this leads to a continuing increase in crude oil prices will depend on factors such as: countries’ commitment to meet the agreed production targets, US producers’ response to higher crude oil prices, supply disruptions and changes in the global economy.
1.2 Caltex Australia to acquire Milemaker Petroleum
Caltex Australia announced on 7 November 2016 that it has entered into an agreement to purchase Milemaker Petroleum’s retail fuel business assets in Victoria for $95 million.4 Caltex proposes to acquire and operate 45 service stations and one site under development in Victoria, with the majority of stations located in and around Melbourne. Caltex would also enter into long-term leases for each of the sites with options out to 30 years.
The ACCC is currently reviewing the proposed acquisition. The proposed date for announcement of the ACCC’s decision is currently 2 March 2017.
1.3 BP Australia to acquire Woolworths’ fuel and convenience sites across Australia
BP Australia and Woolworths Group (Woolworths) announced on 28 December 2016 that BP proposes to acquire, rebrand and operate Woolworths’ existing 527 fuel and convenience sites across Australia, as well as an additional 16 sites currently under construction, for a total consideration of US$1.3 billion.5
The acquisition of Woolworths’ fuel and convenience sites would add to BP’s existing network of approximately 350 company-owned retail sites across Australia. BP Australia would maintain the Woolworths’ 4.0 cpl redemption offer in the 527 fuel and convenience sites acquired from Woolworths, and expand the offer to additional BP sites.
The transaction is subject to approval from the ACCC and the Foreign Investment Review Board. The parties expect the transaction to complete over the next 12 months.
1 Bloomberg, OPEC Confounds Sceptics, Agrees to First Oil Cuts in 8 Years, https://www.bloomberg.com/news/articles/2016–11–30/opec-said-to-agree-oil-production-cuts-as-saudis-soften-on-iran, accessed on 20 January 2017.
2 Platts, Oil futures rally after non-OPEC countries agree to limit output, Oilgram Price Report, volume 94, number 239, 13 December 2016, p. 1.
3 MarketWatch, Oil futures log highest finish since July 2015, http://www.marketwatch.com/story/oil-soars-nearly-5-after-non-opec-producers-agree-to-cut-output-2016–12–12, accessed on 20 January 2017.
4 Caltex Australia, Caltex Australia agrees to purchase Milemaker Petroleum business, ASX press release, 7 November 2016, http://clients3.weblink.com.au/clients/caltex/headline.aspx?headlineid=2982957, accessed on 20 January 2017.
5 BP Australia, BP and Woolworths partnership will deliver a world-class fuel and convenience offer for Australian consumers, press release, 28 December 2016, http://www.bp.com/en/global/corporate/press/press-releases/bp-and-woolworths-partnership.html, accessed on 20 January 2017.
6 Quarterly report on the Australian petroleum industry—December 2016
1.4 NSW IPART finalises its review into wholesale ethanol pricing
On 22 December 2016 the New South Wales Independent Pricing and Regulatory Tribunal (IPART) published the final report of its review of a maximum price for wholesale ethanol in automotive fuel blends.6
IPART recommended a maximum price for the first quarter of 2017 of 115.2 cpl, excluding GST. The recommended maximum price is based on an estimate of an import parity price (IPP) for ethanol, including customs duty (39.6 cpl).
The IPART report noted that the recommended maximum price was at the upper end of its estimate of the efficient cost of producing ethanol. It is also higher than prices currently being negotiated in contracts between domestic ethanol producers and fuel wholesalers. IPART found that consumers currently have a range of fuel choices available, that competition is emerging in the wholesale ethanol market, and that low petroleum prices are placing a market constraint on ethanol prices.
IPART will update the maximum price using its IPP methodology and publish it on its website around two weeks before the beginning of each quarter.
1.5 Queensland ethanol mandate
The Queensland ethanol mandate took effect from 1 January 2017. The mandate requires that 3 per cent of the total volume of regular unleaded petrol (RULP) sales and ethanol blended fuel sales by eligible retailers must be bio-based petrol, such as E10 (i.e. RULP with up to 10 per cent ethanol). The ethanol mandate will increase to 4 per cent from 1 July 2018.7
1.6 BP agrees to renew its State Agreement for the Kwinana refinery
BP announced on 19 October 2016 that it had agreed to renew its State Agreement with the Western Australian Government for a further 30 years, subject to parliamentary approval. 8 The Kwinana refinery is Australia’s largest refinery and supplies more than six million tonnes of fuel each year to Western Australia, Tasmania and South Australia. The existing agreement, the Oil Refinery (Kwinana) Agreement Act 1952, was due to expire in 2020.
The renewal of the agreement will enable BP to continue to operate the Kwinana refinery. BP plans to spend more than $80 million in upcoming planned maintenance and investment activities.
1.7 Availability of fuel price data increased significantly in 2016 and was increasingly used by motorists
A number of websites and apps were introduced during 2016 which provide consumers with near real-time retail petrol pricing information. These include: the 7-Eleven app in February 2016, which provides information about retail prices at all 7-Eleven sites, and the GasBuddy app (which has operated in the United States since around 2000) which was introduced in Australia in March 2016. In addition, the NSW FuelCheck website and NRMA app commenced in August 2016. The existing MotorMouth app and website were modified in May 2016 to provide near real-time prices.
These new and modified fuel pricing websites and apps joined existing ones, such as the Woolworths fuel app and the Western Australian FuelWatch website.
6 IPART, Review of a maximum price for wholesale ethanol in automotive fuel blends, Other—Final Report December 2016, https://www.ipart.nsw.gov.au/files/sharedassets/website/shared-files/pricing-reviews-section-12a-publications-review-of-a-maximum-price-for-wholesale-ethanol/review-of-a-maximum-price-for-wholesale-ethanol-in-automotive-fuel-blends-december-2016.pdf, accessed on 20 January 2017.
7 Queensland Department of Energy and Water Supply, Queensland biofuel mandate, https://www.dews.qld.gov.au/electricity/renewables/fuels/mandate, accessed on 20 January 2016.
8 BP Australia, BP agrees to renew its State Agreement for Kwinana Refinery, media release, 19 October 2016, http://www.bp.com/content/dam/bp-country/en_au/media/media-releases/bp-agree-renew-state-agreement-kwinana-refinery.pdf, accessed on 20 January 2017.
7 Quarterly report on the Australian petroleum industry—December 2016
Further details about the fuel price apps and websites are in appendix A.
The ACCC has obtained data on the number of hits on these websites and apps since the December quarter 2015. Chart 1.1 shows that there has been a substantial increase in the use of fuel pricing websites and apps by motorists over the last 15 months.
Chart 1.1 Total petrol pricing app and website usage: December quarter 2015 to December quarter 2016
million hits
0
5
10
15
20
25
Dec qtr 2016 Jun qtr 2016Dec qtr 2015
Source: ACCC calculations based on data supplied by FuelWatch, FuelCheck, MotorMouth, 7-Eleven, GasBuddy, the NRMA and Woolworths.
Consumers can use these apps and websites to see the variation in retail prices across locations and help them choose where to buy petrol.
For example chart 1.2 shows the range of petrol prices across Brisbane during the downward phase of the price cycle. It indicates that at 4.30 pm on 8 February 2017 there was a variation of around 15 cpl between the highest and lowest price for RULP in Brisbane. It also shows that many high priced sites are located near other sites selling petrol at up to 10 cpl cheaper.
Chart 1.3 shows the range of prices available at the beginning of the price increase phase of the price cycle in Sydney. It shows that there was a variation of over 30 cpl between the lowest and the highest price for RULP in Sydney at 9.30 am on 8 February 2017.
8 Quarterly report on the Australian petroleum industry—December 2016
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9 Quarterly report on the Australian petroleum industry—December 2016
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10 Quarterly report on the Australian petroleum industry—December 2016
2 ACCC activities
2.1 ACCC and the petrol industry
The main role of the ACCC is to enforce the Competition and Consumer Act 2010 (the Act) across the Australian economy, including the fuel industry. The ACCC’s activities under the Act include enforcement and compliance, mergers and acquisitions assessments, authorisations and notifications, and administration of the Oilcode.
The ACCC does not determine wholesale and retail petrol prices in Australia. They are set by market forces. Through its petrol monitoring reports, market studies and other information channels, the ACCC promotes transparency in the Australian petroleum industry and improved public awareness of the factors that determine retail petrol prices.
2.2 Activities during the December quarter
2.2.1 Regional petrol market studies
The ACCC’s in-depth regional market studies aim to explain why petrol prices are higher in certain regional locations and where profit is being made in the petrol supply chain. The ACCC uses its mandatory information gathering powers to obtain relevant information for the studies.
On 21 November 2016 the ACCC released its report on the Armidale petrol market study.9 A summary of the key points was included in the ACCC’s Report on the Australian petroleum market—September quarter 2016.10 This was the third regional market study after Darwin and Launceston.
Work continued in the December quarter 2016 on the Cairns market study, which was announced in April 2016.11 This is expected to be released in the first half of 2017.
On completion of the Cairns regional market study the ACCC will review the overall lessons learned from the four regional market studies and how they may apply in other locations.
2.2.2 Implementation of fuel price information sharing undertakings by Informed Sources
Informed Sources (Australia) Pty Ltd (Informed Sources) operates a petrol price information exchange service which allows for subscribing petrol retailers to exchange prices on a near real time basis.
In August 2014, the ACCC commenced Federal Court proceedings against Informed Sources, Coles Express, 7-Eleven, BP, Caltex and Woolworths as the ACCC was concerned that the near real time exchange of retail petrol prices that consumers did not have access to may have had the effect or likely effect of substantially lessening competition. The proceedings were resolved in December 2015 with the ACCC accepting court enforceable undertakings from Coles Express to leave the Informed Sources service and terminate its contract on 15 April 2016.
The ACCC also accepted court enforceable undertakings from Informed Sources and four petrol retailers (7-Eleven, BP, Caltex and Woolworths) to make the retail petrol price information electronically exchanged between them available to consumers for free and to third party organisations on reasonable commercial terms. The purpose of the undertakings is to reduce the potential for adverse effects on competition arising from the exchange of near real time
9 Australian Competition and Consumer Commission (ACCC), Armidale petrol market has not had sufficient competition, media release, 21 November 2016, at: https://www.accc.gov.au/media-release/armidale-petrol-market-has-not-had-sufficient-competition.
10 ACCC, Report on the Australian petroleum market—September quarter 2016, at: https://www.accc.gov.au/publications/quarterly-reports-on-the-australian-petroleum-industry/quarterly-report-on-the-australian-petroleum-market-%E2%80%93-september-quarter-2016.
11 ACCC, ACCC announces fourth regional petrol market study in Cairns, media release, 19 April 2016, at: https://www.accc.gov.au/media-release/accc-announces-fourth-regional-petrol-market-study-in-cairns.
11 Quarterly report on the Australian petroleum industry—December 2016
retail price information between petrol retailers by assisting consumers to make more informed decisions about when and where to purchase petrol.
From 20 May 2016, site specific, near real time data has been available to consumers through Informed Sources’ MotorMouth app. Some third party organisations have reached agreement with Informed Sources for access to the petrol price information while others are still in negotiations. The ACCC will continue to engage with Informed Sources and third party organisations to monitor Informed Sources’ compliance with the undertaking.
2.2.3 Assessment of proposed mergers in the Australian fuel retail market
Caltex Australia Petroleum Pty Ltd—proposed acquisition of assets from Milemaker Petroleum
On 17 November 2016, the ACCC commenced a review of Caltex’s proposed acquisition of 45 retail service stations and one site under development from Milemaker in Victoria. The ACCC set a provisional date of 16 February 2017 to announce its decision for the review. On 25 January 2017, this decision date was extended to 2 March 2017.
Caltex is involved in the importation, production, wholesale distribution and retail supply of fuel in Australia. Milemaker owns service stations in Victoria which trade under the Caltex brand but operate independently of Caltex.
BP—proposed acquisition of Woolworths’ petrol retail sites
The ACCC has been notified of the proposed acquisition of Woolworths’ petrol retail sites by BP. Once a submission is received the ACCC will commence a public review of the proposed acquisition (which will include consultation with interested parties), and will place an indicative timeline on its public register.
2.2.4 Stakeholder engagement and communications activity
The ACCC hosted a meeting of the Fuel Consultative Committee (FuelCC) in November 2016, with participation from major fuel retailers, refiner-wholesalers, peak industry associations and motoring organisations. The ACCC provided an update on progress with its current petrol industry monitoring activities, and industry and consumer representatives gave updates on a range of industry developments and general stakeholder concerns about fuel prices.
The information and views shared at the FuelCC increase the ACCC’s understanding of fuel industry issues and assist it in undertaking its roles related to competition and consumer protection in the fuel industry.
In the December quarter 2016 the ACCC responded to fuel related media enquiries on price and competition issues. Responses were also prepared to Ministerial and other correspondence on fuel related competition and consumer matters, including fuel price movements in regional and metropolitan locations and the ACCC’s current fuel monitoring activities.
In the quarter the fuel related pages on the ACCC website received 82 115 page views. Of this total the petrol price cycle webpage received 78 912 page views, making it the second most viewed page on the ACCC website in the quarter.
12 Quarterly report on the Australian petroleum industry—December 2016
3 Retail price movements in the capital citiesThis chapter focuses on petrol prices across the five largest cities (i.e. Sydney, Melbourne, Brisbane, Adelaide and Perth).12 It also examines retail prices in the three smaller capital cities (Canberra, Hobart and Darwin). Petrol prices in regional locations across Australia are discussed in chapter 4.
3.1 Retail prices over the year to December 2016
Chart 3.1 shows that seven-day rolling average retail petrol prices in the five largest cities fluctuated throughout 2016. Prices ranged from the low of 102.6 cpl in late-February to a high of 128.6 cpl in mid-June.
Chart 3.1 Seven-day rolling average retail petrol prices in the five largest cities: 1 January to 31 December 201613
100
105
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Jan-16
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-16
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-16
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-16
cpl
Source: ACCC calculations based on FUELtrac data.
Note: The area to the right of the dotted vertical line in this and subsequent charts represents the December quarter 2016.
Over the December quarter, seven-day rolling average prices increased by around 9.0 cpl, from 117.2 cpl on 1 October to 126.3 cpl on 31 December 2016.
The average petrol price in the five largest cities in the December quarter 2016 was 122.0 cpl. This was 7.8 cpl higher than the average of 114.2 cpl in the September quarter 2016.
3.2 Retail prices compared with Mogas 95 prices
Retail petrol prices in Australia are primarily determined by international refined petrol prices. The relevant benchmark is the price of Singapore Mogas 95 Unleaded (Mogas 95).
Chart 3.2 shows that retail petrol prices in the five largest cities and Mogas 95 prices moved in a broadly similar pattern in the year to December 2016.
12 In this report references to petrol are to RULP unless otherwise specified. From 1 July 2014 the ACCC has used E10 prices instead of RULP prices for Sydney in the average price for the five largest cities.
13 A seven-day rolling average price is the average of the current day’s price and prices on the six previous days. Traditionally, the ACCC has used a seven-day rolling average to smooth out the influence of petrol price cycles in the larger capital cities on price movements. This has been less effective in recent years because the length of price cycles in all of the larger capital cities except Perth has become regularly greater than seven days.
13 Quarterly report on the Australian petroleum industry—December 2016
Chart 3.2 Monthly average retail petrol prices in the five largest cities and Mogas 95 prices: January to December 2016
cpl
cpl
Five largest cities (LHS) Mogas 95 (RHS)
Jan-16
Feb
-16
Mar-16
Apr-16
May
-16
Jun-16
Jul-16
Aug
-16
Sep
-16
Oct-16
Nov
-16
Dec
-16
95
100
105
110
115
120
125
130
35
40
45
50
55
60
65
70
Source: ACCC calculations based on FUELtrac, Platts and Reserve Bank of Australia (RBA) data.
In 2016 monthly average Mogas 95 prices in Australian cents per litre increased by around 12 cpl, from 45.4 cpl in January to 57.1 cpl in December. Monthly average retail prices in the five largest cities increased by around 11 cpl, from 114.7 cpl to 126.0 cpl.
In the December quarter 2016, monthly average Mogas 95 prices increased by around 5.0 cpl, from 52.0 cpl in October to 57.1 cpl in December. Monthly average retail prices in the five largest cities increased by around 7 cpl, from 118.6 cpl in October to 126.0 cpl in December.
More detail on recent movements in Mogas 95 prices is provided in chapter 5.
3.3 Gross indicative retail differences in 2016
Gross indicative retail differences (GIRDs) are calculated by subtracting average terminal gate prices (TGPs) from average retail petrol prices.
TGPs are the prices at which petrol can be purchased from wholesalers in the spot market and are posted on a regular basis on the websites of the major wholesalers. While not many wholesale transactions occur at TGP, they can be regarded as indicative wholesale prices. TGPs vary across companies and across cities. TGPs reflect the wholesale price of petrol only, and exclude other retail operating costs (such as branding, transportation, and labour). While GIRDs should not be confused with actual retail profits, they are a broad indicator of gross retail margins.
Table 3.1 shows that, in the five largest cities over the four quarters of 2016:
• Average GIRDs increased by 0.9 cpl in the December quarter 2016 to 11.3 cpl.
• Average GIRDs in the December quarter 2016 were highest in Brisbane (13.9 cpl) and lowest in Adelaide (9.6 cpl).
• Quarterly average GIRDs varied significantly over the period and across cities, ranging from a high of 14.8 cpl (in Brisbane in the June quarter 2016) to a low of 7.2 cpl (in Adelaide in the March quarter 2016).
• Average GIRDs in 2016 were 10.6 cpl, marginally higher than the 2015 average of 10.4 cpl.
14 Quarterly report on the Australian petroleum industry—December 2016
Table 3.1: Quarterly average retail petrol prices, TGPs and GIRDs in the five largest cities: March quarter to December quarter 2016
Location Quarter Retail prices cpl
TGPs cpl
GIRDs cpl
Five largest cities Mar-16 111.0 101.2 9.8
Jun-16 118.0 107.0 11.0
Sep-16 114.2 103.8 10.4
Dec-16 122.0 110.7 11.3
2016 average 116.3 105.7 10.6
Sydney Mar-16 108.0 100.5 7.5
Jun-16 117.4 106.1 11.3
Sep-16 114.0 103.0 11.0
Dec-16 119.7 109.7 10.0
2016 average 114.8 104.9 9.9
Melbourne Mar-16 110.3 101.2 9.1
Jun-16 119.2 107.0 12.2
Sep-16 113.8 103.8 10.0
Dec-16 123.0 110.7 12.3
2016 average 116.6 105.7 10.9
Brisbane Mar-16 114.8 101.6 13.2
Jun-16 122.2 107.4 14.8
Sep-16 115.2 104.2 11.0
Dec-16 125.1 111.1 13.9
2016 average 119.3 106.1 13.2
Adelaide Mar-16 108.5 101.3 7.2
Jun-16 115.2 107.1 8.1
Sep-16 113.1 103.9 9.2
Dec-16 120.3 110.8 9.6
2016 average 114.3 105.8 8.5
Perth Mar-16 113.3 101.6 11.7
Jun-16 116.0 107.4 8.6
Sep-16 114.8 104.2 10.6
Dec-16 122.0 111.2 10.8
2016 average 116.6 106.1 10.4
Source: ACCC calculations based on data from FUELtrac, FuelWatch and information provided by the monitored companies.
Note: Retail prices, TGPs and GIRDs in Sydney are for E10.
3.4 Retail prices in Brisbane remain the highest among the five largest cities
Retail prices in Brisbane are regularly higher than those in Sydney, Melbourne, Adelaide and Perth.
Chart 3.3 shows quarterly average retail prices in Brisbane and average prices across Sydney, Melbourne, Adelaide and Perth from the March quarter 2015 to the December quarter 2016. Over this period Brisbane retail prices were on average 3.6 cpl higher than the average across the other four cities (ranging from a high of 5.2 cpl in the June quarter 2016 to a low of 1.3 cpl in the September quarter 2016).
15 Quarterly report on the Australian petroleum industry—December 2016
In the December quarter 2016 average retail prices in Brisbane were 125.1 cpl, which was 3.8 cpl higher than the average across the other four largest cities. This was 2.5 cpl higher than the differential in the September quarter.
Chart 3.3 Quarterly average retail prices in Brisbane and the other four largest cities: March quarter 2015 to December quarter 2016
Other four largest citiesBrisbane
100
105
110
115
120
125
130
135
140
145
Dec-16Sep-16Jun-16Mar-16Dec-15Sep-15Jun-15Mar-15
cpl
Source: ACCC calculations based on FUELtrac data.
The ACCC is currently undertaking a market study into the Cairns petrol market and is looking at Brisbane petrol prices in that context.
3.5 Price cycles in the five largest cities
Retail petrol prices in the five largest cities in Australia move in cycles. These price cycles do not generally occur in Canberra, Hobart and Darwin, or in most regional locations. Price cycles arise for many reasons including the competitive dynamic between fuel retailers and the pricing policies of fuel retailers. They only occur at the retail level. Wholesale prices do not exhibit similar cyclical movements.
3.5.1 Price cycles over the two years to December 2016
Table 3.2 indicates that over the last two years the number of petrol price cycles per quarter in the five largest cities other than Perth has varied.
The number of price cycles in the December quarter 2016 was unchanged from the previous quarter in all cities except Brisbane, where it increased by one.
The average length of price cycles in 2016 in Sydney, Melbourne, Brisbane and Adelaide has increased compared with 2015. As a result, the number of price cycles in 2016 has decreased in those cities.
16 Quarterly report on the Australian petroleum industry—December 2016
Table 3.2 Number of price cycles per quarter in the five largest cities: March quarter 2015 to December quarter 201614
Quarter Sydney Melbourne Brisbane Adelaide Perth
Mar-15 3 3 2 1 13
Jun-15 5 4 4 5 13
Sep-15 7 3 5 5 13
Dec-15 5 3 2 6 13
2015 20 13 13 17 52
Mar-16 5 2 3 4 13
Jun-16 4 3 3 4 13
Sep-16 4 2 2 3 13
Dec-16 4 2 3 3 13
2016 17 9 11 14 52
Source: ACCC calculations based on FUELtrac data.
3.5.2 The length and size of petrol price cycles have increased over the past decade in the four eastern capital cities
A petrol price cycle is a movement in price from a trough to a peak to a subsequent trough. The length of a price cycle is the number of days between the first trough and the subsequent trough. A price cycle increase is the increase in price from the first trough to the peak. Chart 3.4 shows these elements of a price cycle using daily average retail prices in Perth in December 2016.
Chart 3.4 Elements of a price cycle in Perth in December 2016
cpl
110
115
120
125
130
135
15 Dec13 Dec11 Dec9 Dec7 Dec5 Dec3 Dec1 Dec
price cycle increase
peak
duration
trough
trough
Source: ACCC analysis based on FUELtrac data.
The length of price cycles and their increases in 2007 have been compared with those in 2016. Average retail petrol prices in the five largest cities were broadly the same in 2007 (116.3 cpl) and 2016 (115.2 cpl).
In 2007 petrol price cycles in Sydney, Melbourne, Brisbane and Adelaide had an average length of seven or eight days (see chart 3.5). By 2016 the average length of price cycles in Melbourne and Brisbane was over a month, while those in Adelaide were around 26 days and those in Sydney were around 22 days.
14 The number of price cycles in a period is defined as the number of peaks that occurred in that period. Sydney prices are E10 rather than RULP prices.
17 Quarterly report on the Australian petroleum industry—December 2016
In contrast, over the 10-year period, the average length of price cycles in Perth moved in the opposite direction, decreasing from 15 days in 2007 to seven days in 2016.
The reasons for the different behaviour in Perth compared with the other larger cities are not clear. However, one difference is that, unlike other states, Western Australia has fuel price regulations under which retail sites must keep their prices constant for a 24-hour period and the price at each retail site is publicly available on the FuelWatch website. Because of these arrangements, petrol retailers may be adopting different pricing strategies from those employed in the eastern capital cities.
Chart 3.5 Average length of price cycles in each of the five largest cities in 2007 and 2016
0
5
10
15
20
25
30
35
40
PerthAdelaideBrisbaneMelbourneSydney
day
s
20162007
Source: ACCC analysis based on Informed Sources and FUELtrac data.
During the same period, the average size of the price cycle increase more than doubled in the five largest cities—from around 9.0 cpl in 2007 to around 20 cpl in 2016 (see chart 3.6).
Chart 3.6 Average price cycle increase in each of the five largest cities in 2007 and 2016
20162007
PerthAdelaideBrisbaneMelbourneSydney0
5
10
15
20
25
cpl
Source: ACCC analysis based on Informed Sources and FUELtrac data.
The increase in the length of price cycles is not a recent phenomenon; it has been steadily increasing since 2009. The ACCC sought the views of the major petrol retailers in 2010 and 2012 about reasons for the change in the pattern of the price cycles and they identified several factors: an increase in the degree of retail price competition; some retailers had been delaying price increases in order to increase market share; changes in the behaviour of supermarkets by
18 Quarterly report on the Australian petroleum industry—December 2016
remaining longer at the trough of the price cycle; and a greater sensitivity among consumers of high petrol prices. These factors have not been independently verified.
3.6 Prices in the three smaller capital cities
Chart 3.7 shows that in the year to December 2016, monthly average retail petrol prices:
• in Hobart and Canberra were always higher than in the five largest cities
• in Darwin were generally higher than those in the five largest cities, but in May, June and September 2016, they were lower in Darwin than in the five largest cities
– Darwin prices in September 2016 were 5.3 cpl lower than the five largest cities, which was the largest monthly average difference since the ACCC began monitoring Darwin prices in 2004
• increased in each of the smaller capital cities over the December quarter 2016.
Chart 3.7 Monthly average retail petrol prices in Canberra, Hobart and Darwin and the five largest cities: January to December 2016
cpl
105
110
115
120
125
130
135
Five largest citiesHobart Canberra Darwin
Dec-16Nov-16Oct-16Sep-16Aug-16Jul-16Jun-16May-16Apr-16Mar-16Feb-16Jan-16
Source: ACCC calculations based on FUELtrac data.
In the December quarter 2016 average retail prices:
• in Hobart were 127.6 cpl, 5.6 cpl higher than in the five largest cities (122.0 cpl)
• in Canberra were 127.1 cpl (5.1 cpl higher)
• in Darwin were 126.0 cpl (4.0 cpl higher).
Factors that may lead to relatively higher prices in Canberra, Hobart and Darwin are similar to those factors influencing prices in regional locations outlined in section 4.1.
3.7 Retail prices of the different petrol grades
Chart 3.8 shows that retail prices of the different grades of unleaded petrol—RULP, premium unleaded petrol (PULP) 95, PULP 98, and E10—moved in a similar manner in the year to December 2016.15
15 E10 prices are for Sydney, Melbourne and Brisbane only.
19 Quarterly report on the Australian petroleum industry—December 2016
Chart 3.8 Monthly average retail prices of RULP, PULP 95, PULP 98 and E10 in the five largest cities: January to December 2016
cpl
100
105
110
115
120
125
130
135
140
145
150
E10RULP PULP 95 PULP 98
Dec-16Nov-16Oct-16Sep-16Aug-16Jul-16Jun-16May-16Apr-16Mar-16Feb-16Jan-16
Source: ACCC calculations based on FUELtrac data.
During this period in the five largest cities the average differential between:
• RULP and PULP 95 prices was 11.9 cpl in the December quarter 2016 (an increase of 0.9 cpl from the September quarter 2016)
• RULP and PULP 98 prices was 18.9 cpl in the December quarter 2016 (an increase of 0.9 cpl)
• E10 and RULP prices was 1.5 cpl in the December quarter 2016 (a decrease of 0.1 cpl).
Retail prices of the different grades of petrol move in a similar manner because they are all influenced by international refined petrol benchmark prices (which in turn predominantly move in line with changes in the price of crude oil).
However, the price differentials between the various types of petrol vary over time. For example, retailers will generally set the price of PULP at a fixed premium to RULP. Premiums are adjusted from time to time in response to factors such as in international benchmark differentials and local supply and demand conditions.
3.8 Petrol prices in Australia and other OECD countries
Compared with other developed countries Australia’s retail petrol prices are relatively low.
Chart 3.9 shows the retail price of PULP 95—both including and excluding taxes—among 32 countries in the Organisation for Economic Co-operation and Development (OECD) in the September quarter 2016 (the latest data available). It shows that Australia has the fourth lowest retail PULP 95 prices in the OECD.
20 Quarterly report on the Australian petroleum industry—December 2016
Chart 3.9 Average retail PULP 95 prices and taxes in OECD countries: Australian cents per litre, September quarter 2016
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250
Israel
Italy
Chile
United States
Mexico
Canada
Australia
Poland
Estonia
Hungary
Latvia
Czech Republic
Luxembourg
Austria
Spain
Slovenia
New Zealand
Slovak Republic
France
Ireland
United Kingdom
Germany
Switzerland
Belgium
Sweden
Turkey
Finland
Portugal
Greece
Korea
Norway
Netherlands
Australian cplPrice less tax Tax component Average price less tax
Source: Department of the Environment and Energy, Australian Petroleum Statistics, issue 245, December 2016.
Notes: All international prices shown are for PULP 95 RON, except for New Zealand (96 RON).
Chart 3.10 shows the retail price of RULP—both including and excluding taxes—among nine countries in the OECD in the September quarter 2016. In the majority of OECD countries RULP is not sold in significant quantities. It shows that Australia also has the fourth lowest retail RULP prices in the OECD.
Chart 3.10 Average retail RULP prices and taxes in OECD countries: Australian cents per litre, September quarter 2016
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200
United States
Mexico
Canada
Australia
Chile
Japan
Austria
New Zealand
Korea
Australian cplPrice less tax Tax component Average price less tax
Source: Department of the Environment and Energy, Australian Petroleum Statistics, issue 245, December 2016.
21 Quarterly report on the Australian petroleum industry—December 2016
The determinant of lower retail petrol prices in Australia is the relatively low rate of taxation on fuel. In the September quarter 2016 taxes represented around 40 per cent of the retail price of PULP 95 in Australia. While this is high, it is much lower than in many OECD countries (where the average tax component is around 60 per cent).
Excluding taxes, the price of PULP 95 in Australia is higher than in most OECD countries.
A degree of caution needs to be exercised when comparing international petrol prices, because fuel quality standards differ among countries, as does the availability and use of fuel types.
22 Quarterly report on the Australian petroleum industry—December 2016
4 Retail price movements in regional locationsThe ACCC monitors fuel prices in all capital cities and around 190 regional locations across Australia. These locations are identified in appendix B.
4.1 Influences on regional petrol prices
Movements in retail petrol prices in regional locations are largely driven by changes in international refined petrol prices and the AUD–USD exchange rate, as they are in the five largest cities.
However, prices are generally higher in regional locations. A number of factors may contribute to these higher prices: a lower level of local competition; lower volumes of fuel sold; distance/location factors; and lower convenience store sales. The influence of these factors varies significantly from location to location. This means that there may be substantial differences in prices between specific regional locations.
4.2 Regional petrol prices in aggregate
Chart 4.1 shows that monthly average prices in the regional locations in aggregate (regional prices) increased by 7.8 cpl over the December quarter 2016—from 119.0 cpl in September to 126.8 cpl in December 2016. The increase in regional prices was less than the increase in prices in the five largest cities over the same period (9.6 cpl).
Chart 4.1 Monthly average retail petrol prices in regional locations in aggregate and the five largest cities: January to December 2016
cpl
100
105
110
115
120
125
130
Dec-16Nov-16Oct-16Sep-16Aug-16Jul-16Jun-16May-16Apr-16Mar-16Feb-16Jan-16
Regional locationsFive largest cities
Source: ACCC calculations based on FUELtrac data.
The quarterly average differential between regional prices and prices in the five largest cities in the December quarter 2016 was 3.4 cpl. This was 2.8 cpl lower than the average differential in the September quarter 2016 (6.2 cpl). The average differential between regional prices and those in the five largest cities in 2016 was 4.9 cpl.
The monthly average differential between regional prices and prices in the five largest cities varied substantially over the 12 months to December 2016, ranging from a high of 9.9 cpl in February 2016 to a low of 0.8 cpl in December 2016. In December 2016 average prices in 81 regional locations (around 44 per cent of monitored locations) were lower than average prices in the five largest cities.
While retail petrol prices in regional locations generally follow movements in the international price of refined petrol, they often do not respond as quickly—either up or down—as prices in the five largest cities. For example, in September 2016 monthly average petrol prices in the five
23 Quarterly report on the Australian petroleum industry—December 2016
largest cities increased in response to an increase in international refined petrol prices, while monthly average regional prices continued to decrease.
Further information on petrol price movements in the December quarter 2016 in all locations monitored by the ACCC is presented in appendix B.
4.3 Prices in each of the states and the Northern Territory
Charts 4.2 to 4.8 show seven-day rolling average retail petrol prices in regional locations in each state and the Northern Territory, along with those of the relevant capital city, from 1 January to 31 December 2016.16 The charts also show the differential between prices in regional locations in the state/territory and the respective capital city in the months of September and December 2016, and in calendar year 2016.
In December 2016 monthly average regional prices were lower than average capital city prices in all states except New South Wales and Western Australia, and the Northern Territory.
The charts show that price comparisons between capital cities and regional locations are significantly influenced by price cycles in a number of the capital cities over the short term.
Chart 4.2 Seven-day rolling average petrol prices in Sydney and New South Wales regional locations: 1 January to 31 December 2016
NSW regional locations Sydney
cpl
90
100
110
120
130
140
150
Jan-16
Feb
-16
Mar-16
Apr-16
May
-16
Jun-16
Jul-16
Aug
-16
Sep
-16
Oct-16
Nov
-16
Dec
-16
Dec avg: 4.0 cplSep avg: 1.1 cpl2016 avg: 6.0 cpl
16 There are no prices available for locations in the Australian Capital Territory other than Canberra. The source for charts 4.2 to 4.8 is ACCC calculations based on FUELtrac data.
24 Quarterly report on the Australian petroleum industry—December 2016
Chart 4.3 Seven-day rolling average petrol prices in Melbourne and Victorian regional locations: 1 January to 31 December 2016
Vic regional locations Melbourne
cpl
90
100
110
120
130
140
150Ja
n-16
Feb
-16
Mar-16
Apr-16
May
-16
Jun-16
Jul-16
Aug
-16
Sep
-16
Oct-16
Nov
-16
Dec
-16
2016 avg: 1.8 cpl Dec avg: –2.9 cplSep avg: –0.1 cpl
Chart 4.4 Seven-day rolling average petrol prices in Brisbane and Queensland regional locations: 1 January to 31 December 2016
Qld regional locations Brisbane
cpl
90
100
110
120
130
140
150
Jan-16
Feb
-16
Mar-16
Apr-16
May
-16
Jun-16
Jul-16
Aug
-16
Sep
-16
Oct-16
Nov
-16
Dec
-16
Dec avg: –2.4 cplSep avg: 0.2 cpl2016 avg: 2.5 cpl
25 Quarterly report on the Australian petroleum industry—December 2016
Chart 4.5 Seven-day rolling average petrol prices in Adelaide and South Australian regional locations: 1 January to 31 December 2016
SA regional locations Adelaide
cpl
90
100
110
120
130
140
150
Sep avg: –2.7 cpl Dec avg: –0.2 cpl2016 avg: 2.8 cpl
Jan-16
Feb
-16
Mar-16
Apr-16
May
-16
Jun-16
Jul-16
Aug
-16
Sep
-16
Oct-16
Nov
-16
Dec
-16
Chart 4.6 Seven-day rolling average petrol prices in Perth and Western Australian regional locations: 1 January to 31 December 2016
WA regional locations Perth
cpl
90
100
110
120
130
140
150
Jan-16
Feb
-16
Mar-16
Apr-16
May
-16
Jun-16
Jul-16
Aug
-16
Sep
-16
Oct-16
Nov
-16
Dec
-16
Dec avg: 4.8 cplSep avg: 14.9 cpl2016 avg: 11.4 cpl
26 Quarterly report on the Australian petroleum industry—December 2016
Chart 4.7 Seven-day rolling average petrol prices in Hobart and Tasmanian regional locations: 1 January to 31 December 2016
Tas regional locations Hobart
cpl
90
100
110
120
130
140
150Ja
n-16
Feb
-16
Mar-16
Apr-16
May
-16
Jun-16
Jul-16
Aug
-16
Sep
-16
Oct-16
Nov
-16
Dec
-16
Dec avg: –1.3 cplSep avg: –2.2 cpl2016 avg: 0.0 cpl
Chart 4.8 Seven-day rolling average petrol prices in Darwin and Northern Territory regional locations: 1 January to 31 December 2016
cpl
90
100
110
120
130
140
150
Jan-16
Feb
-16
Mar-16
Apr-16
May
-16
Jun-16
Jul-16
Aug
-16
Sep
-16
Oct-16
Nov
-16
Dec
-16
Dec avg: 2.7cplSep avg: 15.6 cpl2016 avg: 10.3 cpl
NT regional locations Darwin
4.4 Darwin petrol market study
In March 2015 the ACCC announced that Darwin would be the first regional location for a petrol market study. The report on the Darwin petrol market was released in November 2015.17 The report found that the increase in retail petrol margins in Darwin in recent years had imposed a significant cost on motorists. Prices in Darwin were around 10 cpl higher than would be expected in a competitive market. The report noted that higher prices and profits in Darwin were the result of weak retail competition.
17 ACCC, Report on the Darwin petrol market, November 2015, at: https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-darwin-petrol-market.
27 Quarterly report on the Australian petroleum industry—December 2016
4.4.1 Darwin retail petrol prices remained low relative to the five largest cities in the December quarter 2016
Chart 4.9 shows quarterly average retail petrol prices in Darwin and the five largest cities from the March quarter 2014 to the December quarter 2016.
The market study noted that the average differential between prices in Darwin and the five largest cities in 2012–13 and 2013–14 was over 19 cpl. Since then, there has been a substantial decrease in the differential, which reached a low of –2.0 cpl in the June quarter 2016 and remained low in the December quarter 2016 (4.0 cpl).
Chart 4.9 Quarterly average retail petrol prices in Darwin and the five largest cities: March quarter 2014 to December quarter 2016
cpl
Mar-14
Jun-14
Sep
-14
Dec
-14
Mar-15
Jun-15
Sep
-15
Dec
-15
Mar-16
Jun-16
Sep
-16
Dec
-16
100
110
120
130
140
150
160
170
180
Five largest citiesDarwin
Source: ACCC calculations based on FUELtrac data.
4.4.2 Darwin petrol GIRDs remained below the five largest cities in the December quarter 2016
Chart 4.10 shows quarterly average GIRDs in Darwin over a three-year period from the March quarter 2014 to the December quarter 2016. GIRDs in Darwin reached a peak of 30.6 cpl in the September quarter 2014, the highest quarterly average GIRDs recorded for Darwin since the ACCC began monitoring them in July 2004.
In the December quarter 2016 GIRDs in Darwin were 10.6 cpl, an increase of 3.1 cpl from the previous quarter (7.5 cpl). Despite this increase, Darwin GIRDs remained lower than GIRDs in the five largest cities over the same period (11.3 cpl).
28 Quarterly report on the Australian petroleum industry—December 2016
Chart 4.10 Quarterly average petrol GIRDs in Darwin: March quarter 2014 to December quarter 2016cp
l
Mar-14
Jun-14
Sep
-14
Dec
-14
Mar-15
Jun-15
Sep
-15
Dec
-15
Mar-16
Jun-16
Sep
-16
Dec
-16
0
5
10
15
20
25
30
35
Five largest citiesDarwin
Source: ACCC calculations based on FUELtrac, Australian Institute of Petroleum (AIP), WA FuelWatch and information provided by monitored companies.
4.5 Launceston petrol market study
The ACCC announced Launceston as the location for its second regional fuel market study in May 2015. The report on the Launceston petrol market was released in July 2016.18 It found that between 2012–13 and the first half of 2015–16 Launceston motorists paid on average around 12 cpl more for petrol than motorists in the five largest cities. The report noted that if the Launceston market was more competitive motorists could expect savings of 4–5 cpl on a sustainable basis. The three main factors causing higher prices in Launceston were: higher transport costs; higher wholesale operating costs and margins; and higher retail operating costs and margins.
4.5.1 The increase in Launceston retail petrol prices was relatively small in the December quarter 2016
In the December quarter 2016 prices in Launceston were 128.5 cpl, an increase of 3.3 cpl from the previous quarter (see chart 4.11). This increase was significantly lower than the increase in prices in the five largest cities over the same period (7.8 cpl).
In the December quarter 2016 prices in Launceston were 6.5 cpl higher than those in the five largest cities, the lowest quarterly differential since the September quarter 2011 (3.3 cpl). This is almost half the differential for the period between 2012–13 and the first half of 2015–16.
18 ACCC, Report on the Launceston petrol market, July 2016, at: https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-launceston-petrol-market.
29 Quarterly report on the Australian petroleum industry—December 2016
Chart 4.11 Quarterly average retail petrol prices in Launceston and the five largest cities: March quarter 2014 to December quarter 2016
cpl
100
110
120
130
140
150
160
170
180
Five largest citiesLaunceston
Mar-14
Jun-14
Sep
-14
Dec
-14
Mar-15
Jun-15
Sep
-15
Dec
-15
Mar-16
Jun-16
Sep
-16
Dec
-16
Source: ACCC calculations based on FUELtrac data.
4.5.2 Launceston GIRDs decreased in the December quarter 2016
Chart 4.12 shows quarterly average GIRDs in Launceston and the five largest cities over the three-year period from the March quarter 2014 to the December quarter 2016.19 Launceston GIRDs were 12.6 cpl in the December quarter 2016, a decrease of 3.6 cpl from the previous quarter. Launceston GIRDs in the December quarter were around 4.0 cpl lower than average annual GIRDs in 2015–16.
They were also only 1.3 cpl higher than GIRDs in the five largest cities. This is the lowest differential between Launceston GIRDs and GIRDs in the five-largest cities since the September quarter 2011.
19 Hobart TGPs were used as a proxy for TGPs in Launceston.
30 Quarterly report on the Australian petroleum industry—December 2016
Chart 4.12 Quarterly average petrol GIRDs in Launceston and the five largest cities: March quarter 2014 to December quarter 2016
cpl
Mar-14
Jun-14
Sep
-14
Dec
-14
Mar-15
Jun-15
Sep
-15
Dec
-15
Mar-16
Jun-16
Sep
-16
Dec
-16
0
5
10
15
20
25
Five largest citiesLaunceston
Source: ACCC calculations based on FUELtrac, AIP, WA FuelWatch and information provided by monitored companies.
Note: Hobart TGPs were used as a proxy for TGPs in Launceston.
4.6 Armidale petrol market study
The ACCC announced Armidale as the location for its third regional fuel market study in August 2015. The report on the Armidale petrol market was released in November 2016.20 It found that relatively weak retail competition in Armidale, reflected by a lack of price discounting, contributed to prices being on average 8.0 cpl higher than those in the five largest cities between 2012–13 and 2014–15.21
4.6.1 The differential between prices in Armidale and prices in the five largest cities decreased in the December quarter 2016
Chart 4.13 shows quarterly average retail petrol prices in Armidale and the five largest cities from the March quarter 2014 to the December quarter 2016.
The differential between petrol prices in Armidale and the five largest cities decreased in the December quarter 2016 by 0.9 cpl to 6.9 cpl. This is lower than the average differential between 2012–13 and 2014–15.
20 ACCC, Report on the Armidale petrol market, November 2016, at: https://www.accc.gov.au/publications/petrol-market-studies/report-on-the-armidale-petrol-market.
21 E10 prices are used for Armidale in this section.
31 Quarterly report on the Australian petroleum industry—December 2016
Chart 4.13 Quarterly average retail petrol prices in Armidale and the five largest cities: March quarter 2014 to December quarter 2016
cpl
100
110
120
130
140
150
160
170
180
Five largest citiesArmidale
Mar-14
Jun-14
Sep
-14
Dec
-14
Mar-15
Jun-15
Sep
-15
Dec
-15
Mar-16
Jun-16
Sep
-16
Dec
-16
Source: ACCC calculations based on FUELtrac, WA FuelWatch and information provided by monitored companies.
4.6.2 Armidale GIRDs remained broadly stable in the December quarter 2016
Chart 4.14 shows quarterly average GIRDs in Armidale over a three-year period from the March quarter 2014 to the December quarter 2016. GIRDs in Armidale were broadly stable between the September and December quarters 2016 at around 19 cpl. This is broadly similar to the annual average differential of 19.0 cpl in 2014–15 and 18.5 cpl in 2015–16.
Chart 4.14 Quarterly average petrol GIRDs in Armidale and the five largest cities: March quarter 2014 to December quarter 2016
cpl
Mar-14
Jun-14
Sep
-14
Dec
-14
Mar-15
Jun-15
Sep
-15
Dec
-15
Mar-16
Jun-16
Sep
-16
Dec
-16
0
5
10
15
20
25
30
Five largest citiesArmidale
Source: ACCC calculations based on FUELtrac, WA FuelWatch and information provided by monitored companies.
Note: Sydney and Brisbane E10 TGPs from monitored companies were used as a proxy for Armidale TGPs.
32 Quarterly report on the Australian petroleum industry—December 2016
5 International price movementsThe main influences on movements in retail petrol prices in Australia are the international price of refined petrol (which is influenced in turn by the price of crude oil) and the AUD–USD exchange rate.
5.1 Crude oil and refined petrol
Crude oil prices are an important influence on movements in refined petrol prices around the world. There are a number of international benchmarks used for pricing crude oil, including West Texas Intermediate (WTI), Brent, Tapis and Dubai. The most widely used benchmark on global markets is Brent crude oil.
The relevant international benchmark price for petrol in Australia is the price of refined petrol in the Asia-Pacific region—Singapore Mogas 95 Unleaded (Mogas 95). This benchmark is used for pricing petrol in Australia due to Australia’s proximity to Singapore, which is one of the world’s most important trading and refining centres.
5.1.1 Price movements over the last two years
Chart 5.1 shows international crude oil and refined petrol prices in the two years to December 2016.
Chart 5.1 Weekly average Brent crude oil and Mogas 95 prices: 1 January 2015 to 31 December 2016
Brent crude oil Mogas 95
USD
per bl
20
30
40
50
60
70
80
90
Jan-15
Feb
-15
Mar-15
Apr-15
May
-15
Jun-15
Jul-15
Aug
-15
Sep
-15
Oct-15
Nov
-15
Dec
-15
Jan-16
Feb
-16
Mar-16
Apr-16
May
-16
Jun-16
Jul-16
Aug
-16
Sep
-16
Oct-16
Nov
-16
Dec
-16
Source: ACCC calculations based on Platts data.
Weekly average Brent crude oil prices fell in January and the first week of February 2015 before rebounding to around USD 65 per barrel in May 2015. They subsequently decreased by USD 37 per barrel (or 57 per cent) to around USD 28 per barrel in January 2016. The large overall decline in crude oil prices between May 2015 and early–2016 was influenced by weaker international economic conditions, and global oil production significantly exceeding consumption.
From January 2016, weekly average Brent prices increased by USD 27 per barrel to around USD 55 per barrel at the end of December 2016. This increase was influenced by improved economic sentiment, disruptions to supply and production, and agreements between OPEC
33 Quarterly report on the Australian petroleum industry—December 2016
members and some non-OPEC countries in late 2016 to decrease oil production volumes from January 2017 (see chapter 1).22
Mogas 95 prices moved in a similar manner to Brent crude oil over the two-year period. Weekly average Mogas 95 prices increased from around USD 55 per barrel in January 2015 to around USD 86 per barrel in June 2015. They subsequently decreased to around USD 41 per barrel in February 2016 before increasing by USD 29 per barrel to around USD 70 per barrel at the end of December 2016.
Brent crude oil and Mogas 95 prices fluctuated over the December quarter 2016:
• Weekly average Brent crude oil prices started the quarter at around USD 50 per barrel (A 41 cpl), decreased to around USD 43 per barrel (A 36 cpl) in November before finishing the quarter at around USD 55 per barrel (A 45 cpl).
– The December quarter 2016 average Brent crude oil price was around USD 49 per barrel, an increase of USD 3 per barrel from the average in the previous quarter.
• Weekly average Mogas 95 prices started the quarter at around USD 59 per barrel (A 48 cpl). They increased to around USD 65 per barrel (A 53 cpl) in late October, decreased to around USD 57 per barrel (A 47 cpl) in November before increasing again and finished the quarter at around USD 70 per barrel (A 57 cpl).
– The December quarter 2016 average Mogas 95 price was around USD 63 per barrel, an increase of USD 8 per barrel from the average in the previous quarter.
5.1.2 The refiner margin was lower in 2016
International refined petrol prices generally move in line with crude oil prices. This is because crude oil makes up the majority of the cost of refined petrol. However, like the prices of most internationally traded commodities, the price of Mogas 95 is also determined by global and regional supply and demand conditions.
The large fall in global crude oil prices in 2015 and 2016 was largely reflected in international refined petrol prices. However, demand for petrol was relatively strong in 2015, particularly in the US, India and Indonesia. This strong demand contributed to Mogas 95 prices being significantly higher than Brent crude oil prices in 2015.
The difference between the price of refined petrol and crude oil—which is called the refiner margin (or the gasoline crack)—is shown in chart 5.2.
In 2016 the annual average refiner margin was USD 12.40 per barrel, a decrease of USD 4.40 per barrel from the average in the previous year. The lower refiner margin in 2016 was largely driven by an increase in supply of refined petrol, particularly in the Asia–Pacific region.23
22 Reuters, Oil hits six-month highs on supply outages, Goldman forecast, 16 May 2016, at: http://www.reuters.com/article/us-global-oil-idUSKCN0Y703M, accessed on 3 August 2016 and Bloomberg, OPEC agrees to first oil output cut in eight years, 29 September 2016, at http://www.bloomberg.com/news/articles/2016–09–28/opec-said-to-agree-on-first-oil-output-cut-in-eight-years, accessed on 16 November 2016.
Reuters, OPEC, non-OPEC agree first global pact since 2001, 10 December 2016, at:http://www.reuters.com/article/us-opec-meeting-idUSKBN13Z0J8, accessed on 9 January 2017.
23 Platts, Singapore gasoline crack at 32-month low on stubborn supply glut, http://www.platts.com/latest-news/oil/singapore/singapore-gasoline-crack-at-32-month-low-on-stubborn-27622316, 11 July 2016, accessed on 4 November 2016.
Platts, Asian Gasoline crack seen steady to slightly higher in2017, http://www.platts.com/latest-news/oil/singapore/asian-gasoline-crack-seen-steady-to-slightly-27738078, 27 December 2016, accessed on 11 January 2017.
34 Quarterly report on the Australian petroleum industry—December 2016
Chart 5.2 Monthly average refiner margins: January 2015 to December 2016USD
per bl
0
5
10
15
20
25
2015 average: USD 16.80
2016 average: USD 12.40
Jan-15
Feb
-15
Mar-15
Apr-15
May
-15
Jun-15
Jul-15
Aug
-15
Sep
-15
Oct-15
Nov
-15
Dec
-15
Jan-16
Feb
-16
Mar-16
Apr-16
May
-16
Jun-16
Jul-16
Aug
-16
Sep
-16
Oct-16
Nov
-16
Dec
-16
Source: ACCC calculations based on Platts data.
The average refiner margin in the December quarter 2016 was around USD 13 per barrel (A 11.2 cpl), an increase of USD 4 per barrel (A 3.9 cpl) from the previous quarter (USD 9 per barrel or A 7.3 cpl).
5.1.3 Crude oil prices in the long term
As with many commodities, crude oil prices fluctuate greatly. In the short run, market sentiment about economic conditions and geo-political events can drive rapid movements in crude oil prices. Over the medium to longer term, prices are driven by supply and demand factors, with periods of high or low prices lasting several years.
Extended periods of high oil prices provide an incentive for oil producers to invest in exploration and expansion. This leads to an increase in supply which in turn puts downward pressure on prices. Conversely, when oil prices are low, oil producers tend not to invest, which puts upward pressure on prices as growth in demand is not met by supply.
Chart 5.3 shows that over the 40 years to December 2016 WTI crude oil prices in real terms were on average around USD 59 per barrel. Over the last 10 years prices were historically high, with the average around USD 84 per barrel.
Real WTI prices were on average around USD 49 per barrel in the December quarter 2016, which was USD 4 per barrel higher than in the September quarter 2016, and USD 10 per barrel lower than the 40-year average.
35 Quarterly report on the Australian petroleum industry—December 2016
Chart 5.3 Monthly average real WTI crude oil prices: January 1977 to December 2016USD
per bl
0
20
40
60
80
100
120
140
160
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
WTI 40-year average 10-year average
Source: ACCC calculations based on data used with permission from The Wall Street Journal, WSJ.com, Copyright 2015 Dow Jones & Company, Inc. All rights reserved, Reuters and U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index for all urban consumers, http://www.dlt.ri.gov/lmi/pdf/cpi.pdf, accessed on 23 January 2017.
Note: Real (inflation adjusted) values in December 2016 dollars.
5.2 AUD–USD exchange rate
The AUD–USD exchange rate is a significant determinant of Australian retail petrol prices because international refined petrol is bought and sold in United States dollars in global markets.
Chart 5.4 shows that in the two years to December 2016 the AUD–USD exchange rate decreased from a high of around USD 0.82 in January 2015 to a low of around USD 0.69 in January 2016. It subsequently increased to USD 0.78 in late April 2016, before ending the December quarter lower at USD 0.72.
Chart 5.4 Daily AUD–USD exchange rates: 1 January 2015 to 31 December 2016
USD
0.65
0.67
0.69
0.71
0.73
0.75
0.77
0.79
0.81
0.83
0.85
Jan-15
Feb
-15
Mar-15
Apr-15
May
-15
Jun-15
Jul-15
Aug
-15
Sep
-15
Oct-15
Nov
-15
Dec
-15
Jan-16
Feb
-16
Mar-16
Apr-16
May
-16
Jun-16
Jul-16
Aug
-16
Sep
-16
Oct-16
Nov
-16
Dec
-16
Source: RBA data.
Note: Exchange rates are the daily RBA 4 pm closing rates. See: http://www.rba.gov.au/statistics/frequency/exchange-rates.html.
During the December quarter 2016 the AUD–USD exchange rate decreased substantially. The daily exchange rate began the quarter at around USD 0.77 and finished the quarter at around USD 0.72.
36 Quarterly report on the Australian petroleum industry—December 2016
In the December quarter 2016 the average AUD–USD exchange rate was USD 0.75—around USD 0.01 lower than in the previous quarter. This quarterly average exchange rate was around USD 0.07 (9 per cent) lower than the two-year high exchange rate of USD 0.82 in January 2015. Had the AUD–USD exchange rate remained at USD 0.82, average retail petrol prices in the December quarter 2016 in Australia would have been around 4 cpl lower (everything else being equal).
37 Quarterly report on the Australian petroleum industry—December 2016
6 Diesel and LPG prices
6.1 Diesel price movements
Average retail diesel prices in the five largest cities increased during the December quarter 2016 (see chart 6.1). They averaged 125.2 cpl in the December quarter 2016, an increase of 6.9 cpl from the September quarter.
Chart 6.1 Seven-day rolling average retail diesel prices in the five largest cities and Gasoil 10 ppm prices: 1 January to 31 December 2016
cpl
cpl
Retail prices (LHS) Gasoil 10 ppm (lagged 11 days) (RHS)
Jan 16
Feb
16
Mar 16
Apr 16
May
16
Jun 16
Jul 1
6
Aug
16
Sep
16
Oct 16
Nov
16
Dec
16
20
30
40
50
60
70
80
80
90
100
110
120
130
140
Source: ACCC calculations based on FUELtrac, Platts and RBA data.
The appropriate international benchmark price for diesel is the price of Singapore Gasoil with 10 parts per million sulphur content (Gasoil 10 ppm). International demand for diesel is different from that for petrol, in part because of diesel’s off-road, industrial and electricity generation uses. However, both petrol and diesel are refined from crude oil and their prices will tend to follow broadly similar movements over the long term.
Chart 6.1 shows that seven-day rolling average retail diesel prices in the five largest cities broadly tracked Gasoil 10 ppm prices in 2016.
In the December quarter 2016, retail diesel prices steadily increased from a low of around 117 cpl at the beginning of October 2016 to a high of around 133 cpl in mid-December 2016—an increase of around 16 cpl. Gasoil 10 ppm prices increased by around 14 cpl from the trough in mid-August.
6.2 LPG price movements
In the December quarter 2016 average retail LPG prices in the five largest cities were 66.9 cpl, an increase of 4.8 cpl from the September quarter (62.1 cpl).
Seven-day rolling average retail LPG prices at the beginning of the quarter were around 60 cpl, their lowest level since August 2012. They increased by around 10 cpl between early September and mid-November 2016, due to an increase in the Saudi CP benchmarks of around 9.0 cpl between August and November. Retail prices largely remained around 70 cpl from mid-November to the end of the quarter (see chart 6.2).
38 Quarterly report on the Australian petroleum industry—December 2016
Chart 6.2 Seven-day rolling average retail LPG prices in the five largest cities and monthly Saudi CP benchmarks: 1 January to 31 December 2016
cpl
cpl
Retail prices (LHS) Saudi CP (RHS)
20
25
30
35
40
45
50
45
50
55
60
65
70
75Ja
n 16
Feb
16
Mar 16
Apr 16
May
16
Jun 16
Jul 1
6
Aug
16
Sep
16
Oct 16
Nov
16
Dec
16
Source: ACCC calculations based on FUELtrac, RBA and Gas Energy Australia data.
The appropriate benchmarks for LPG are the Saudi Aramco Contract Prices for propane and butane (Saudi CP). These prices only change once a month, at the start of each month. International LPG prices loosely move in line with international refined petrol or diesel prices.
As the Saudi CP benchmarks only change at the start of each month, the relationship between movements in the international benchmark prices and retail prices for LPG is somewhat different from petrol and diesel. Furthermore, international LPG prices are influenced by non-transport factors such as demand for heating particularly in the Northern Hemisphere.
Seven-day rolling average retail LPG prices in 2016 remained within a 10 cpl band, as did the Saudi CP benchmarks.
Like diesel prices, retail LPG prices tend to be less volatile than petrol prices and do not have price cycles. LPG usage in Australia is significantly less than petrol and diesel usage, and there are fewer retailers of LPG, particularly outside Victoria (where more than half of Australia’s automotive LPG is sold).
39 Quarterly report on the Australian petroleum industry—December 2016
Appendix A—Petrol pricing information apps and websites
40 Quarterly report on the Australian petroleum industry—December 2016
7-Eleven Fuel app
Cost: Free to download and use
Commencement date: 9 February 2016
Types of fuel data: All major consumer fuels including RULP, E10, PULP 95, PULP 98, diesel and LPG
Fuel pricing information for 7-Eleven service stations across Australia
Motorists have the option to lock in a price found at a 7-Eleven service station for up to seven days and redeem it at any 7-Eleven stores in Australia
Data source: Internal 7-Eleven system
Update frequency: Near real-time, within 90 seconds of a price change at a 7-Eleven service station
Figure A5 7-Eleven Fuel app screenshots
41 Quarterly report on the Australian petroleum industry—December 2016
GasBuddy app
Cost: Free to download and use; in-app advertisements
Commencement date: 6 March 2016
Types of fuel data: All major consumer fuels including RULP, E10, PULP 95, PULP 98, diesel and LPG
Fuel pricing information at most service stations across different brands, across Australia
Data source: Primarily crowd-sourced in real-time, with additional fuel price information from commercial fleet card swipe data and publicly provided government sources
Update frequency: Prices are updated into the app depending on the source frequency, usually on a slight time delay
Figure A6 GasBuddy app screenshots
42 Quarterly report on the Australian petroleum industry—December 2016
MotorMouth app
Cost: Free to download and use
Commencement date: 15 July 2013; revamped MotorMouth app launched on 14 December 2015; another revamp with near real-time site level pricing on 20 May 2016
Types of fuel data: All major consumer fuels including RULP, E10, PULP 95, PULP 98, diesel and LPG
Fuel pricing information at most service stations across different brands across Australia
Data source: Data from participating major fuel retailers; prices submitted by users and from service station site operators; and public sources such as WA FuelWatch and NSW FuelCheck
Update frequency: Near real-time
Figure A1 MotorMouth app screenshot
43 Quarterly report on the Australian petroleum industry—December 2016
MotorMouth website
Commencement date: 2001; revamped with near real-time site level pricing on 20 May 2016
Types of fuel data: All major consumer fuels including RULP, E10, PULP 95, PULP 98, diesel and LPG
Fuel pricing information at most service stations across different brands across Australia, with colour coded bands to reflect high and low priced fuel stations for comparison
Seven-day rolling averages for around 200 regional locations
Data source: Data from participating major fuel retailers; prices submitted by users and from service station site operators; and public sources such as WA FuelWatch and NSW FuelCheck
Update frequency: Near real-time
Figure A2 MotorMouth website screenshot
44 Quarterly report on the Australian petroleum industry—December 2016
NSW FuelCheck website
Commencement date: Officially launched on 24 August 2016
Types of fuel data: All major consumer fuels including RULP, E10, PULP 95, PULP 98, diesel and LPG
Fuel pricing information for almost all service stations in metropolitan Sydney and regional NSW
Data source: Data supplied directly by fuel retailers
Update frequency: Near real-time
Figure A3 FuelCheck website screenshots
45 Quarterly report on the Australian petroleum industry—December 2016
NRMA app
Cost: Free to download and use
Commencement date: 24 August 2016
Types of fuel data: All major consumer fuels including RULP, E10, PULP 95, PULP 98, diesel and LPG
Fuel pricing information for almost all service stations in metropolitan Sydney and regional NSW
Data source: NSW Government Fair Trading—FuelCheck
Update frequency: Near real-time
Figure A4 NRMA fuel app screenshot
46 Quarterly report on the Australian petroleum industry—December 2016
Woolworths app
Cost: Free to download and use; in-app Woolworths advertisements
Commencement date: 30 June 2014 for iOS and 16 July 2014 for Android
Types of fuel data: All major consumer fuels including RULP, E10, PULP 95, PULP 98, diesel and LPG
Fuel pricing information for Caltex Woolworths co-branded service stations operated by Woolworths, across Australia
Data source: Informed Sources
Update frequency: Near real-time
Figure A7 Woolworths fuel app screenshots
47 Quarterly report on the Australian petroleum industry—December 2016
WA FuelWatch website
Commencement date: 2 January 2001
Types of fuel data: All major consumer fuels including RULP, E10, PULP 95, PULP 98, diesel and LPG
Fuel pricing information for service stations in all of metropolitan Perth and most of regional WA
Data source: Data supplied directly by fuel retailers
Update frequency: Next day’s fuel prices are updated on the website at 2.30 pm each day. Compliance to prices displayed on the FuelWatch website is backed by legislation requiring retailers and wholesalers to sell at their reported prices for 24 hours, from 6 am
Figure A8 FuelWatch website screenshots
48 Quarterly report on the Australian petroleum industry—December 2016
49 Quarterly report on the Australian petroleum industry—December 2016
Appendix B—Petrol price dataThe ACCC monitors fuel prices in all capital cities and around 190 regional locations across Australia.
Monthly average retail petrol prices for September and December 2016, and the change between the two, are shown in table B1 below.24 The table also shows the differential between average petrol prices in the five largest cities and each regional location in December 2016 and 2015–16.25
Table B1 Monthly average petrol prices in September and December 2016 and the city–country differential in December 2016 and 2015–16
Location September 2016 December 2016 Change Sep to Dec
Differential Dec-16
Differential 2015–16
Sydney 116.3 124.5 8.2
Melbourne 117.6 125.9 8.3
Brisbane 120.2 128.1 7.9
Adelaide 116.5 124.2 7.7
Perth 111.2 127.4 16.2
Five largest cities 116.4 126.0 9.6
Hobart 124.5 129.2 4.7 3.2 8.5
Canberra 119.5 128.4 8.9 2.4 5.2
Darwin 111.0 129.8 18.8 3.8 2.7
New South Wales
Albury 112.0 122.1 10.1 –3.9 –0.5
Armidale 120.0 130.2 10.2 4.2 8.1
Ballina 119.5 134.1 14.6 8.1 6.3
Batemans Bay 111.7 133.9 22.2 7.9 6.9
Bathurst 112.4 126.5 14.1 0.5 2.4
Bega 125.9 130.9 5.0 4.9 2.0
Broken Hill 115.7 126.7 11.0 0.7 10.7
Bulahdelah 121.0 131.8 10.8 5.8 10.0
Casino 111.6 128.3 16.7 2.3 –3.4
Central Coast 110.2 127.4 17.2 1.4 3.1
Coffs Harbour 113.9 125.9 12.0 –0.1 1.2
Cooma 122.7 129.5 6.8 3.5 6.1
Coonabarabran 117.1 134.9 17.8 8.9 9.9
Cootamundra 117.0 126.1 9.1 0.1 5.1
Cowra 114.9 120.0 5.1 –6.0 –0.8
Deniliquin 121.8 129.0 7.2 3.0 7.1
Dubbo 115.6 132.5 16.9 6.5 6.8
Forbes 117.0 134.9 17.9 8.9 –2.0
Forster 121.9 136.3 14.4 10.3 10.2
Gilgandra 115.9 128.3 12.4 2.3 9.2
24 For a price to be included in the table there had to be a price observation on at least 75 per cent of days in the month/year. Ten locations—Buronga, Gundagai, Oberon, Blackall, Charleville, Cloncurry, Normanton, Weipa, Coober Pedy, Orbost, Boulder and Waroona—did not have sufficient data for September 2016 and/or December 2016. E10 prices instead of RULP prices are reported in Sydney, Bulahdelah, Coonabarabran, Cowra, Gilgandra, Glen Innes, Gunnedah, Lithgow, Mittagong, Murwillumbah, Ulladulla, Wellington and West Wyalong.
25 The source for all prices in this appendix is ACCC calculations based on FUELtrac data.
50 Quarterly report on the Australian petroleum industry—December 2016
Location September 2016 December 2016 Change Sep to Dec
Differential Dec-16
Differential 2015–16
Glen Innes 115.9 122.6 6.7 –3.4 –3.3
Goulburn 104.3 124.6 20.3 –1.4 0.3
Grafton 110.6 125.0 14.4 –1.0 0.5
Griffith 124.4 126.9 2.5 0.9 6.3
Gunnedah 121.9 125.4 3.5 –0.6 5.6
Hay 119.7 123.1 3.4 –2.9 4.9
Inverell 119.0 126.1 7.1 0.1 2.2
Jerilderie 122.2 128.0 5.8 2.0 6.5
Kempsey 119.9 122.5 2.6 –3.5 3.2
Leeton 114.9 123.9 9.0 –2.1 –1.2
Lismore 115.3 126.9 11.6 0.9 2.9
Lithgow 115.7 121.7 6.0 –4.3 n/a
Merimbula 115.3 126.3 11.0 0.3 3.2
Mittagong 121.0 132.9 11.9 6.9 7.3
Moama 116.2 121.0 4.8 –5.0 1.0
Moree 122.2 129.3 7.1 3.3 6.1
Moruya 119.3 125.4 6.1 –0.6 6.6
Moss Vale 111.8 131.5 19.7 5.5 9.6
Mudgee 122.2 128.5 6.3 2.5 9.0
Murwillumbah 106.4 128.5 22.1 2.5 –1.3
Muswellbrook 121.8 125.4 3.6 –0.6 4.4
Narrabri 124.4 129.7 5.3 3.7 8.8
Newcastle 109.2 126.1 16.9 0.1 –0.4
Nowra 114.4 133.5 19.1 7.5 1.5
Nyngan 119.9 131.3 11.4 5.3 7.2
Orange 106.6 128.0 21.4 2.0 3.6
Parkes 120.9 133.8 12.9 7.8 0.8
Port Macquarie 119.5 124.8 5.3 –1.2 8.0
Queanbeyan 116.9 127.4 10.5 1.4 3.3
Singleton 116.2 130.0 13.8 4.0 8.0
Tamworth 119.9 127.3 7.4 1.3 5.6
Taree 121.2 131.0 9.8 5.0 6.4
Temora 114.9 125.8 10.9 –0.2 3.5
Tumut 120.4 125.6 5.2 –0.4 8.2
Tweed Heads South 110.7 133.9 23.2 7.9 1.3
Ulladulla 113.1 129.4 16.3 3.4 7.9
Wagga Wagga 119.2 131.2 12.0 5.2 2.3
Wauchope 120.8 126.8 6.0 0.8 7.5
Wellington 110.9 114.9 4.0 –11.1 –1.5
West Wyalong 117.2 127.1 9.9 1.1 4.2
Wollongong 102.8 123.4 20.6 –2.6 –3.3
Woolgoolga 112.9 127.7 14.8 1.7 2.6
Yass 120.2 133.3 13.1 7.3 6.4
51 Quarterly report on the Australian petroleum industry—December 2016
Location September 2016 December 2016 Change Sep to Dec
Differential Dec-16
Differential 2015–16
Northern Territory
Alice Springs 125.0 130.8 5.8 4.8 13.2
Katherine 119.2 126.6 7.4 0.6 3.0
Tennant Creek 135.8 139.7 3.9 13.7 26.1
Queensland
Atherton 125.8 129.9 4.1 3.9 10.7
Ayr 109.0 117.7 8.7 –8.3 –4.4
Biloela 127.9 129.9 2.0 3.9 10.6
Blackwater 127.9 127.9 0.0 1.9 10.9
Bowen 119.0 129.8 10.8 3.8 7.1
Bundaberg 110.0 120.4 10.4 –5.6 2.0
Caboolture 125.9 128.3 2.4 2.3 3.8
Cairns 129.9 129.8 –0.1 3.8 10.9
Charters Towers 122.8 131.1 8.3 5.1 8.5
Childers 116.0 121.5 5.5 –4.5 3.2
Cunnamulla 127.9 129.9 2.0 3.9 10.8
Dalby 116.2 120.3 4.1 –5.7 5.6
Emerald 125.9 125.3 –0.6 –0.7 10.3
Gladstone 113.7 128.5 14.8 2.5 2.1
Gold Coast 119.3 130.6 11.3 4.6 2.4
Goondiwindi 116.9 118.4 1.5 –7.6 9.7
Gympie 113.2 122.7 9.5 –3.3 0.6
Hervey Bay 118.9 129.3 10.4 3.3 5.0
Ingham 112.7 121.3 8.6 –4.7 8.2
Innisfail 124.9 126.5 1.6 0.5 7.9
Ipswich 120.5 124.4 3.9 –1.6 1.4
Kingaroy 119.9 122.9 3.0 –3.1 7.5
Longreach 126.8 130.4 3.6 4.4 13.6
Mackay 125.2 125.0 –0.2 –1.0 2.5
Mareeba 127.8 127.9 0.1 1.9 9.2
Maryborough 115.4 124.1 8.7 –1.9 2.5
Miles 114.2 119.9 5.7 –6.1 8.4
Moranbah 119.2 123.6 4.4 –2.4 1.4
Mt Isa 120.1 119.9 –0.2 –6.1 12.0
Rockhampton 127.5 127.8 0.3 1.8 4.4
Roma 120.6 120.2 –0.4 –5.8 10.9
Sunshine Coast 120.9 127.9 7.0 1.9 3.9
Toowoomba 102.5 118.1 15.6 –7.9 3.6
Townsville 111.6 129.9 18.3 3.9 7.7
Tully 124.9 125.1 0.2 –0.9 9.1
Warwick 117.3 129.8 12.5 3.8 2.0
Whitsunday 113.2 120.8 7.6 –5.2 –3.1
Yeppoon 126.7 127.8 1.1 1.8 4.7
52 Quarterly report on the Australian petroleum industry—December 2016
Location September 2016 December 2016 Change Sep to Dec
Differential Dec-16
Differential 2015–16
South Australia
Bordertown 113.3 123.9 10.6 –2.1 –0.3
Ceduna 118.7 127.0 8.3 1.0 5.3
Clare 106.7 118.6 11.9 –7.4 –0.4
Gawler 120.2 124.8 4.6 –1.2 0.7
Kadina 109.3 120.4 11.1 –5.6 0.0
Keith 116.9 125.5 8.6 –0.5 3.0
Loxton 111.3 123.2 11.9 –2.8 –2.3
Mt Gambier 108.1 123.9 15.8 –2.1 1.3
Murray Bridge 106.8 123.0 16.2 –3.0 0.1
Naracoorte 117.3 124.2 6.9 –1.8 6.4
Port Augusta 112.9 126.1 13.2 0.1 5.0
Port Lincoln 116.3 122.4 6.1 –3.6 1.7
Port Pirie 110.1 119.4 9.3 –6.6 0.9
Renmark 105.7 123.1 17.4 –2.9 –4.5
Tailem Bend 111.9 123.5 11.6 –2.5 1.6
Victor Harbour 113.4 124.3 10.9 –1.7 0.6
Whyalla 114.2 126.4 12.2 0.4 –0.8
Tasmania
Burnie 120.2 126.8 6.6 0.8 8.4
Campbell Town 122.9 128.8 5.9 2.8 8.4
Devonport 120.9 127.6 6.7 1.6 8.2
Huonville 122.8 128.2 5.4 2.2 9.6
Launceston 123.9 131.1 7.2 5.1 10.6
New Norfolk 119.6 124.0 4.4 –2.0 10.7
Queenstown 128.1 135.8 7.7 9.8 13.7
Smithton 123.1 127.2 4.1 1.2 11.6
Sorell 119.6 126.2 6.6 0.2 7.0
Ulverstone 120.8 127.4 6.6 1.4 8.5
Wynyard 125.0 123.5 –1.5 –2.5 8.4
Victoria
Ararat 114.7 121.6 6.9 –4.4 –1.6
Bairnsdale 112.9 119.4 6.5 –6.6 –4.5
Ballarat 114.0 121.0 7.0 –5.0 –3.3
Benalla 119.0 122.9 3.9 –3.1 5.6
Bendigo 118.4 122.1 3.7 –3.9 –0.7
Cobram 118.9 124.7 5.8 –1.3 2.0
Colac 116.8 120.8 4.0 –5.2 4.3
Corryong 125.3 131.8 6.5 5.8 9.6
Echuca 116.5 121.8 5.3 –4.2 1.9
Euroa 119.3 123.0 3.7 –3.0 4.3
Geelong 117.3 126.0 8.7 0.0 –1.7
Hamilton 117.7 122.2 4.5 –3.8 6.2
Horsham 119.6 122.3 2.7 –3.7 6.7
Koo Wee Rup 117.0 126.2 9.2 0.2 –1.1
53 Quarterly report on the Australian petroleum industry—December 2016
Location September 2016 December 2016 Change Sep to Dec
Differential Dec-16
Differential 2015–16
Kyabram 119.8 120.3 0.5 –5.7 2.4
Lakes Entrance 116.2 121.9 5.7 –4.1 3.9
Leongatha 119.9 126.5 6.6 0.5 4.1
Mansfield 125.9 126.9 1.0 0.9 6.7
Mildura 116.7 123.4 6.7 –2.6 2.7
Moe 116.9 120.9 4.0 –5.1 0.9
Morwell 114.2 120.6 6.4 –5.4 3.1
Portland 112.9 121.2 8.3 –4.8 3.5
Sale 118.3 121.3 3.0 –4.7 5.2
Seymour 120.5 127.2 6.7 1.2 0.7
Shepparton 114.7 122.3 7.6 –3.7 –0.5
Swan Hill 118.7 124.0 5.3 –2.0 5.7
Traralgon 116.2 122.2 6.0 –3.8 2.7
Wallan 117.3 126.1 8.8 0.1 –1.5
Wangaratta 116.5 120.3 3.8 –5.7 –2.4
Warrnambool 114.7 121.3 6.6 –4.7 1.0
Wonthaggi 119.6 126.4 6.8 0.4 3.7
Wodonga 113.5 122.3 8.8 –3.7 –1.9
Yarrawonga 119.3 120.1 0.8 –5.9 0.9
Western Australia
Albany 111.2 129.5 18.3 3.5 4.0
Bridgetown 122.7 126.9 4.2 0.9 9.4
Broome 139.7 143.5 3.8 17.5 20.9
Bunbury 117.9 129.1 11.2 3.1 5.5
Busselton 117.7 121.8 4.1 –4.2 5.2
Carnarvon 136.3 140.3 4.0 14.3 23.1
Collie 114.1 129.7 15.6 3.7 6.0
Dongara 126.1 129.6 3.5 3.6 14.8
Esperance 126.9 130.1 3.2 4.1 11.0
Eucla 146.8 148.8 2.0 22.8 29.7
Geraldton 117.2 129.4 12.2 3.4 10.6
Kalgoorlie 125.9 129.9 4.0 3.9 9.6
Karratha 142.9 144.8 1.9 18.8 23.5
Manjimup 118.8 122.5 3.7 –3.5 1.9
Mount Barker 115.2 128.3 13.1 2.3 1.6
Port Hedland 136.9 136.8 –0.1 10.8 20.8