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Queensland Economic Advocacy Solutions

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Why Brisbane fuel prices are so high

The ACCC has released a report on why motoring fuel prices in Brisbane are higher than other capital cities in Australia.  Whilst specific to the Sunshine State’s capital city there are lessons that can be extrapolated more widely.

Key findings include:

  • Petrol prices in Brisbane have been significantly higher than those in the other four largest cities (i.e. Sydney, Melbourne, Adelaide and Perth) in Australia for the last eight years.
  • Between 2009–10 and 2016–17, Brisbane motorists paid on average 3.3 cents per litre (cpl) more for petrol than motorists in the other four largest cities.
  • The main factor influencing the higher prices in Brisbane is higher retail margins on petrol, which have contributed to profits in Brisbane being significantly higher than the average across Australia.
  • Over the last 10 years the number of retail sites in Brisbane has been broadly stable, at around 400 sites.
  • However, compared with Sydney, Brisbane has fewer independent chains operating in the retail market, and they do not price as aggressively.
  • The cost to motorists in Brisbane of higher petrol prices has been significant, at around $50 million per annum. Over the eight-year period the estimated cost is in the region of $400 million.

The key solution highlighted by the ACCC for high fuel prices honed in on the promotion of vigorous and effective price competition and promoting increased transparency of prices available through retail outlets.

The ACCC wrote:

In Brisbane there is usually a wide range of prices at retail petrol sites across the city. Readily available information about current retail petrol prices, from fuel price websites and apps, enables motorists to shop around and purchase petrol at relatively lower priced retail sites. Not only do motorists benefit from those lower prices, but the availability of petrol price data may promote competitive market behaviour. It will reward those retailers that are prepared to actively compete on price, because their pricing behaviour can be seen, and acted upon, by motorists.

TO this end I have provided below links to websites that can assist motorists to make better decisions about where they can purchase their fuel based on price.

https://www.racq.com.au/cars-and-driving/driving/fair-fuel-prices

http://gasbuddy.com.au/

https://motormouth.com.au/

 

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