The last time we saw petrol prices this low, we were all worrying about our computer systems shutting down when the Millennium turned. Since then petrol prices have risen and fallen with the economy and as it stands today, they're now sitting at a 17-year low.
The Australian Competition and Consumer Commission’s (ACCC) latest report has revealed that the recent March quarter witnessed the lowest prices in the last 17 years, which means the average cost per litre was just 111¢. That is a significant 13.4¢ cheaper than the previous quarter and 22.2¢ cheaper than the September quarter. But are prices expected to remain this low?
An ‘NRMA Insurance’ spokesman who goes by the name of Peter Khoury advised motorists to fill up as soon as possible, because he believes that the current fuel slump we are experiencing is coming to an end (and soon). He also suggested that prices on average across Sydney, for example, will jump from being the cheapest at $1.094 per litre, to almost $1.30 potentially as soon as 12th June.
The relatively strong Aussie dollar at the beginning of this year and the glut of fuel around the world has helped the country access cheaper fuel prices. However, since January the Australian international fuel benchmark has risen by almost US$18. Whilst there isn’t much we can do about the prices if they do start to go up, we can at least enjoy the fact that the government secured an obligation with fuel stations to publish their prices in real time. This provides us with the ability to choose where we can refuel for less.
The reason for such low fuel prices is related to two main influences. Firstly, the price of crude oil and refined international petrol prices in terms of inflation fell to new lows that haven’t been seen since 2002 and 2008. Secondly, gross retail margins decreased in the second half of 2015, which the ACCC believes were unreasonably high. As a result the they wrote to the major petrol retailers in early February 2016 asking why high retail margins were still being used.
There were some big contributors to the fact that petrol prices decreased by 13.4¢, one of which was related to the reduction in price per litre of international crude oil that dropped by 8.3¢.
Brisbane was hit the hardest with oil prices because unlike the other 4 major cities in Australia, which all had fuel on average costing 110¢ per litre, Brisbane’ prices sat at 114.8¢. This higher average price in Brisbane is most likely related to the lack of competition at the retail level. The ACCC hopes that the new fuel price transparency will help bring Brisbane closer in line with the rest of the country.
Darwin has decreased its prices substantially after the area received attention from the watchdog’s local petrol market report. It was revealed that Darwin's petrol prices were higher on average by 21.3¢ per litre compared to the 5 largest cities in Australia.
There has also been a technological movement within the fuel sector that has effected prices at the pump which can be linked back to mobile apps popping up to display fuel prices within your area. GasBuddy, which launched in March 2016, is a crowdsourcing app that allows motorists to share information about fuel prices within the area. MotorMouth has also recently updated its app to include access to real-time petrol price information. The release of this kind of new information has not been seen before in Australia and is a result of the ACCC’s battle with the company Informed Sources, as mentioned in my previous article.
So there's no excuse to overspend on fuel unnecessarily anymore, as these new mobile apps make it easy to find the most convenient location to fill up for less.