An investigation by the Australian Competition and Consumer Commission (ACCC) has found that Brisbane motorists are paying too much for fuel – a combined $50 million per year.

ACCC Chairman, Rod Sims, said a lack of competition was behind the high prices at the bowser, with service stations enjoying high profit margins at the expense of consumers.

According to the report, the average net profit per service station in Brisbane is 55 per cent higher than other capital cities.

“It’s a huge gap,” Mr Sims said.

“And from a motorist’s point of view, it’s simply unacceptable. 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 investigation found that even though wholesale fuel prices were slightly lower in Brisbane than other cities, retail prices for the past eight years have been an average of 3.3c per litre higher than in Sydney, Melbourne, Adelaide and Perth.

Coles Express is the worst offender, with prices more than 4c per litre above the market average.

BP-owned and operated outlets were the next highest, followed by Freedom Fuels and Caltex owned and operated. The lowest average prices were 7-Eleven, followed by Woolworths, Puma and United.

The investigation came after the Queensland Government ordered a Fuel Price Summit last year, which itself followed a campaign by the Courier-Mail/Sunday Mail.

The ACCC wrote to 10 major fuel sellers but has not found any justification for the higher Brisbane prices.

“The responses received by the ACCC were largely disappointing,” the report said.

“Most retailers stated that they were unable to provide an explanation, with a few noting that their pricing policy was to follow the market.”
Mr Sims said the lack of competition from independent chains in Brisbane, compared to Sydney and Melbourne, was behind the price difference.

“This is simply a case of (them saying) ‘we are not facing the same competition so we can make more profit’,” he said.

Brisbane has four independent chains – 7-Eleven, Puma Energy, Freedom Fuels and United – making up 34 per cent of the market.

Sydney has seven independent chains accounting for 40 per cent of all service stations.

Not only does Brisbane have fewer independents, but they do not price as aggressively as in other states.

The cost of fuel from Brisbane independents averaged only 1.3c per litre below the market average, while Sydney’s bigger number of independents resulted in prices as much as 3.8c per litre below average.

The report pointed out that the Queensland Government had scrapped its petrol subsidy eight years ago after an inquiry found that only 7.8c of the 9.2c per litre subsidy was being passed on to motorists.

“This lack of competitiveness appears to have persisted in the Brisbane market beyond the cessation of the subsidy in mid-2009.”

Mr Sims said the ACCC did not have the power to regulate fuel prices.

“It would be strange if we did,” he said, pointing out that it was up to motorists to use apps such as GasBuddy and MotorMouth to save.

“You can save 20c or more per litre by choosing when and where to buy,” Mr Sims said.

“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 to $15 per tank.’’

Mr Sims said the inquiry did nothing to explain the regular petrol price cycle.

“It is one of life’s most baffling unknowns. It drives motorists mad. They feel they are being ripped off and it does the industry enormous damage as a result.”

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