Petrol Prices Australia New WA country differentials increase   also update 3 Dec   2004 of daily Perth prices showing that Coles & Woolworths  impact on market has given us lowest pump prices for years, compared to world oil. Signs are that prices could have been held down in run up to the Fed Election  ? Post 9 Oct Fed Election margins jump, HELLO !!  Daily pump prices from FuelWatch.
Melbourne price trend to July, very similar to Perth. 3 Nov new page for Diesel price trends
Over  41 months from Jan 2001 Australian pump price trend continues to increase compared to  world oil price while USA and Bangkok pump price trends are competitive with world oil (all in A$).

These pages are written with the underpinning idea that the Australian petroleum industry should be as competitive as other industries which would mean that the main drivers of petrol pump price variations should be changes in the world oil price and our currency.  It will have to be recognized at a political level that the vertical integration Australia has tolerated in the oil industry has allowed the industry enormous market power for decades, making frequent sudden price rises unrelated to the cost of oil. It is clear from the graphics presented here of the last three years monthly average pump prices and world oil spot price plus my Osama Index, that all Australian capital city pump prices tend to be  inflated with higher margins in periods when world oil prices have fallen.   It so happens that Perth motorists have suffered the biggest increase over the three year period, so graphics for Perth are used. Figures for all state capitals are given on the Osama Index page, click on blue link above.
Click for chart of Sydney price comparisons to Feb 2004 and you see it is very similar to Perth but Perth motorists are ripped off that little bit more.
Thai petroleum price statistics (see links section below), allow us to make comparisons from a free market economy very close to Singapore, which our oil industry is always telling us is the source of our price trends.
Funny that the Thai price trends are not dominated by Singapore, do they know something we do not ?
The graphic above, monthly average Perth ULP, BangkokUG95 and "USA regular conventional"  pump price trends are compared in A$ cents per litre showing clearly that the trendline for Bangkok and USA pump prices has fallen over the 41 months in line with world oil, while the trendline for Perth prices have risen. 
For those interested in numbers, the linear trends calculated by MS Excel over 41 months since January 2001 show Perth pump prices have increased 19 cents compared with the USA and about 17 cents compared with Bangkok.  It is interesting that after 2002 Perth prices diverged greatly from Bangkok, demonstrating our grossly uncompetitive market; were we suckered by war talk ?
June 2004 notes on graphic above; during April Woolworths and Coles rolled out their retail petrol outlets in Perth (and I assume Nationally). To date this has caused lower pump prices than we might have otherwise had, note how my Osama Index has pulled back to pre-Iraq levels.  I am preparing some daily statistics from FuelWatch comparing outlets in my local area of Perth. I would say any economy minded  motorists should obtain the FuelWatch daily figures for their  area.  The interesting point to watch over time will be whether the competition between Woolworths and Coles will continue to deliver fairer prices. The Osama Index and my comparisons with the Thai market will tell.
Looking back at the Osama Index it seems obvious that through 2003 our OilCo's built their margins higher with the Woolworths/Coles deals in mind. The Caltex share price trend will keep us in touch with how well they are travelling.  Woolworths and Coles should be able to access wholesale or imported petrol at prices comparable to the Thais; until then we will continue to be ripped off.
A frequent drumbeat by apologists for the Australian system of "petrol pricing ripoffs" is that prices are tied to some Import Parity Indicator which derives from some Singapore petrol price index which of course is rising.  All my enquires to obtain data histories for this have drawn blank, which tells me the data is is secret and only available to those in the Oil Club. The ACCC told me the OilCos asked them to stop making the numbers public !!
Through McGraw Hill / Platts I was offered the Singapore cargoes  data at $14,000 PA.  What a loony toon  situation our politicians have woven for us when a key price indicator is in effect secret !!!  
Making a "back of an envelope" calculation allowing for say 15 billion litres of ULP consumed each year, the Australian economy has been paying circa A$850 million per year too much for ULP on the basis of the above comparison with the Bangkok retail market. One might think that politicians attention could be drawn to an issue on this scale which is of course a serious impost on the entire Australian economy.    The Thais are clever enough to have their pump prices trending similar to world oil, why aren't we ???

Clearly we can not expect our economy to work as efficiently as the US economy does with the benefit of huge volumes and obviously tanker freight rates mean that we have to look for petrol supplies close to our region.  Perhaps we need a petroleum import agency, similar to the Australian Wheat Board. Few seriously question that it is in our national interest to sell grains through the AWB rather than having smaller sellers at the mercy of large powerful buyers. Looking at the magnitude of the increasing trend in our petrol retail market compared to falling trends in more efficient markets, it is clear that in our national interest a proper investigation is made to see what savings in our annual fuel bill would emerge from a national fuels importer.

These pages are dedicated to getting a fairer outcome for the millions of Australian motorists paying too much for their petrol.
Our too many politicians,  both State and Federal, should recognize that fuel costs are a large component of all family and business spending and after decades of policy failure some intervention may be needed to facilitate a free market and combat the huge powers of the vertically integrated international Oil Companies. The simplest way I can see is for politicians to to facilitate petrol imports. Any impeding of imports, for example introducing rules on petrol quality for spurious air quality reasons will only play into the hands of the OilCo's, as is already happening in Perth, a system planned to go Austrlia wide in 2005. Consumers watch out then.   Another problem is that our Govts. get higher taxes as pump prices rise.  It is up to voters to make their voices heard in favour of freeing up petrol and fuel imports.  Eight Govts. dabbling in fuel price policy has grown a too complex system that helps the Oil Companies who while they may compete on this site or that issue, can quietly act in their common interest and whose experts outlive the ever-changing Govts.
Politicians need to work for a pricing environment that stops this crazy saw-tooth price pattern where periodically prices shoot upward instantly over 10 cents then slowly trickle down under the influence of competition. Do not let the Oil Companies fool you on this one. It is NOT competition that shoots the price up suddenly, that is a product of their predatory pricing power which derives from being vertically integrated. This saw-tooth price pattern impedes and attacks their competition, the independent retailers are constantly kept off balance as they ponder when the next irrational wholesale price jump is coming. How can the Oil Companies be taken seriously when their "terminal gate prices" (TGP) are often above pump prices ? We know they are supplying at rates under the TGP. Consumers should expect nothing less than a transparent and understandable system, tied to world prices, beyond opportunistic manipulation and should demand an end to the secretive, expensive and blitheringly complex fuel pricing system Australia is stuck with.
A recent example of competition driving prices down, is the introduction of Woolworths petrol outlets to country towns in NSW in the mid-1990's pushing prices down by 5 cents or more. Note it took a company the size of Woolworths to do this. Politicians should be encouraging competition by ensuring that the business environment does not inhibit the independent importers and suppliers.   In late 2003 the agreements between Shell and Coles Myer, Caltex and Woolworths, are very interesting and probably not good news for motorists. You would need to check carefully what higher prices you are paying for groceries, in order to qualify for your petrol discount.
An example of a local impediment to imports is the silly WA regulation that mandates on spurious air quality grounds, petrol of a higher quality than is used in Sydney or Melbourne, a specification not imported from Singapore. This is done as a  sop to the Greens who hold the balance of power in WA upper house.  It is plain from this graphic (and others see links below) that AQ has been improving over decades in all Australian cities.  The Perth BP refinery can produce that specification, surprise, surprise.  I understand SA has a similar specification and that this petrol specification is likely to go nationwide in 2005, putting more upward pressure on prices.  Motorists have the future in their own hands; if enough objections are made to politicians then this idiot plan will be axed.  To see graphic evidence that our air quality is improving and has been for over a decade, see the links below to Melbourne and Perth air quality.  There are utterly no reasons on air quality grounds, for Australian families to pay more for a "higher quality" petrol.  Extra money for petrol means less money to spend on your children. Ethanol has been an issue showing the Federal Govt's lack of interest on consumer concerns and willingness to tolerate a "rafferties rules" regime where the percentage of ethanol in petrol is concerned.
Another furphy is the claim of refinery job losses if petrol imports increase. What is the big deal here, tell it to the rag trade and bank employees thrown out of work. Can anyone have sympathies with coddled refinery workers ?, just remember the strikes of not so long ago when motorists had to keep tins of petrol in their garages. Take a look at the Shell web site and you will see how the Oil Companies cry poor with graphs showing declining returns on their investment. If things are this bad; and who would believe them, one option is to sell their businesses here to people who can work at a profit. If Australian OilCo's has to be divided up so companies are not vertically integrated, thus freeing up competition, so be it.
Obviously a major rip-off in the Australian petrol pricing structure are the huge country / city differentials which can not be justified by freight costs. Maybe aided and abetted by cosy deals,  a lack of opposition and no doubt higher unit costs in small operations.  The entry of Woolworths into rural NSW petrol retailing in the mid-1990's brought pump prices down by 5 cents in places like Young, Forbes etc.   In remote farming areas it might be possible for groups of  farmers to form fuel co-ops if the present sytem is is giving them fuels at too high a cost.   I hear that in Inglewood in Victoria people have formed a fuel co-operative.  Good luck but I bet the Oil Companies are already striking back with lower prices in nearby towns.  Right ?     It seems odd that despite the influence of rural voters Governments for all their power can not get much of an improvement for rural consumers.

Press articles worthy of attention. If anyone has seen anything noteworthy, please send them in.

Back to http://www.warwickhughes.com/

Links:
Australian Automobile Association, Canberra based body representing the NSW NRMA and the various State RAC's. You can download fuel price data from FuelTrac. Links to all the auto clubs. What do the clubs do about petrol prices ?
http://www.aaa.asn.au

USA Dept. of Energy, page for world oil price and many fuel types price data downloadable.
http://www.eia.doe.gov/oil_gas/petroleum/info_glance/prices.html

Thai petroleum price statistics
http://www.eppo.go.th/info/

Currency & exchange rate computation site.
http://www.oanda.com/convert/fxhistory

Trinity College Library in Perth, very large site covering many subjects has some pages with a range of articles on petrol pricing.
http://library.trinity.wa.edu.au/subjects/sose/economics/petrol.htm

Motor Traders Association of WA, run by Peter Fitzpatrick, often quoted in media articles on fuel prices, always worth reading.
http://www.mta_wa.com.au/

Fuel Watch, WA Govt. site helping us to find the best fuel prices.
http://www.fuelwatch.wa.gov.au/

Caltex Australia price data going back a few years
http://www.caltex.com.au/pricing.asp

Shell Australia  various graphics of price histories
http://www.shell.com.au/petrolpricing/

Melbourne air quality improving  graphics of decreasing pollution
http://www.warwickhughes.com/air/epa.htm

Perth and Kwinana air improving  many graphics showing air quality improving
http://www.warwickhughes.com/air/aqual.htm

Crikey.Com sure to have a thing or two to say on petrol prices
http://www.crikey.com.au/

The ACCC  "The ACCC monitors the prices of petrol, diesel and LPG. Following the deregulation of petrol and diesel prices on 1 August 1998, the ACCC has had an informal price monitoring role. The ACCC collects and analyses the retail prices of unleaded petrol, diesel and automotive liquefied petroleum gas in the capital cities and around 110 country towns."
The ACCC say they concentrate their monitoring efforts on price cycles, it looks to me as if anything meaningful is too hard for them. As if motorists can not tell that 94 is a bigger number than 86 !!  The ACCC started a huge inquiry in 2001, submissions are dated just prior to 9/11, cosmic bad luck for the ACCC as the OilCo's grab for extra margins after 9/11 made their enquiry obsolete.  Clearly our complex of State and Federal laws make it too easy for the Oil Co's to keep ahead of the ACCC.
http://www.accc.gov.au/content/index.phtml/itemId/11938/fromItemId/3671

Fuel prices all over Australia handy if you have to know up to date pump prices anywhere
http://www.exploroz.com/Interact/FuelPrices_NSW.asp

I looked at the BP site which did not work for me and Esso / Mobil had no price data I could find.
If anyone knows of other sites with downloadable price data, please pass the secret on.

If any OilCo (or other) insiders are interested in spilling any beans, then total confidentiality is assured.
My name is Warwick Hughes and I can be emailed on sanur2007 at sign warwickhughes.com
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