Thursday, June 17, 2021

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Tags Australian Competition and Consumer Commission

Tag: Australian Competition and Consumer Commission

Fuel rip-off: Town Council challenged to put their hands to the pump

The Town Council has been challenged to go into the fuel retail business, possibly as a joint venturer. Failing that they should form a collective bargaining group with other regional councils to negotiate a better deal on petrol prices for the community.

So urged Frank Zumbo, Associate Professor of Business Law at the University of New South Wales (pictured at left), for whom a fairer price at the pump around Australia, and especially in the regions, is an enduring research interest.

Invited to speak to council at their committee meeting last night, Prof Zumbo said motorists in Alice, as elsewhere in the regions, are getting "ripped off" by major oil company and retailer price gouging.

"When margins get close to 30 cents a litre at the retail end, you start to think there's something wrong in the whole process."

He based his estimation of the rip-off on a comparison of the average notional wholesale price of petrol around the country – 137.7 cents/litre – with the average retail prices in Darwin, Katherine and Alice Springs: these are 154.2, 146.1 and 165.5 respectively.

He surmised that the consistently lower price in Katherine is because the market has effective competition, while the consistently higher prices in Darwin and Alice are due to a lack of competition, with the major oil companies and retailers forming "a cozy club" with a "collective interest" in having their prices and profit margins as high as possible. KIERAN FINNANE reports.

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