Petrol prices are at their lowest level since 2002, but fuel retailers are also enjoying large margins, according to the Australian Competition and Consumer Commission (ACCC).
The consumer watchdog’s quarterly petroleum industry report for June found that retail margins remained high despite quarterly average petrol prices in the five largest cities dropping by 3.9 cents per litre (cpl) from the March quarter to 125.2 cpl.
In 2016-17, annual average petrol prices were at their lowest levels in real terms since 2001-02, with the annual average retail petrol prices in the five largest cities at 122.6 cpl in which is slightly higher than in 2015-16 in nominal terms.
ACCC Chairman Rod Sims said prices would be even lower if at wasn’t for “continuing high gross retail margins”.
Average gross retail margins in the five largest cities in the June quarter decreased by 0.6 cpl from the previous quarter to 11.7 cpl, but on an annual average basis, they were at the highest level in real terms in the 15 years since the ACCC began monitoring them.
In 2016-17 gross retail margins in Melbourne (12.3 cpl) and Perth (12.0 cpl) were also the highest in real terms since 2002.
Retail prices in Brisbane were the highest and 3.3 cpl higher than the average across the other four largest cities.
Sims said the ACCC is currently investigating why and will report in the next few weeks.
He added that pump prices reflect low international prices.
“Of the price paid at the bowser, 42% is the international price of refined petrol. Another 42% is taxes (i.e. GST and excise),” Sims said.
The ACCC has also been studying four regional areas and found three, with the exception of Darwin, had high margins.
“Motorists in Launceston, Armidale, and Cairns are paying too much for petrol,” Sims said.
Petrol stations in Cairns were making around 38% higher average net profits than other sites, the ACCC concluded.
“Competition is driven by the willingness of motorists to shop around for the best price. For example, in Cairns, motorists that shop around can find petrol that is consistently around 10 cpl lower than the average,” Sims said.
The international price of refined petrol and taxes continued to be the largest contributing costs to the average bowser price, at 42% each, with wholesale and retail costs and margins decreasing from 17% in 2015-16 to 16% in 2016-17.
The ACCC collects retail petrol prices for all capital cities and over 190 regional locations across Australia.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.