Fed: $1 petrol - heaven for motorists but small servos face ruin
By Doug Conway, Senior Correspondent, and AAP reporters26 Nov 2008 3:31 PM
SYDNEY, Nov 26 AAP - Australian motorists are discovering that every cloud has a silver lining, as the global recession drives petrol prices down to their lowest level in three years, in some cases under $1 a litre.
But some retailers have been branded "idiots" for selling at less than cost, a practice one motoring group warns could send smaller independent stations to the wall.
In the meantime, filling up the tank hasn't been so cheap since 2005, giving welcome relief to many families in the lead-up to Christmas.
The cheapest regular unleaded petrol (ULP) in Sydney was 100.9 cents per litre in the inner-west, though ethanol-blended E10 fuel was on offer for 98.7 cents in the western suburbs.
Most bowsers in Brisbane had ULP at 99 cents a litre, with 97.9 the cheapest reported in the northern suburbs.
In Adelaide the lowest was 98.7 cents and in Melbourne 103.9.
WA's cheapest petrol was 105 cents at Coolup, south of Perth, but it should be even cheaper, according to RAC vehicle policy manager Mike Upton, who accused fuel companies of gouging.
Regional centres are not expected to experience such low prices because they don't have the same level of retail competition, according to industry sources.
But the heavy cost-cutting was not greeted with joy by everyone.
The Motor Trade Association in Adelaide said independent operators faced ruin, and called for an urgent investigation by the consumer watchdog.
"We are concerned that our members are being forced into a loss making situation and this may be occurring due to a predatory pricing behaviour by big players in the market," said executive director John Chapman.
"Should the independents drop out and the market is left to big business, we will see the end of the competitive petrol market."
A spokeswoman for the Australian Competition and Consumer Commission said there was no specific information to suggest the discount was inappropriate.
"We understand prices can and will fall below cost price at the bottom of the weekly cycle, but we will be keeping an eye on it," she said.
The independent consultancy Fueltrac said some Sydney outlets were selling fuel for less than they were paying.
"But unless there's 10,000 other idiots in Sydney they won't be selling it at that price, will they? They'd all go broke," said spokesman Geoff Trotter.
The current drop in prices follows a stunt last month when a dozen independent petrol stations slashed 40 cents off the fuel price, selling it for 94.9 cents to protest against what they said were anti-competitive practices by the oil giants.
Blacktown BP service station owner Marie El-Khoury, who led the campaign, said she did not know why people were still under-pricing, but was happy that the protest seemed to have had some influence on wholesale prices.
Ms El-Khoury predicted further price drops at the bowser before Christmas.
"I think these prices will remain at least until January," said David Cumming from Victoria's RACV.
"The wholesale price has been reduced by 42 cents since October 24, when we started seeing huge decreases in the price of crude.
"A few months ago it was $140 for a barrel of crude, now it is $52."
"OPEC (Organisation of Petroleum Exporting Countries) are meeting on November 29 and they might see if they can stop any further decreases by limiting supply.
"I don't know if that will work because demand is down in the US."
Queensland's RACQ said it was too hard to predict because "anything could happen to crude oil prices".
