Petrol prices fell to their lowest level in more than two decades for the June quarter, as pandemic restrictions hit the industry hard.
In the Australian Competition and Consumer Commission’s latest petrol monitoring report released this week, the average retail price for the quarter across Sydney, Melbourne, Brisbane, Adelaide and Perth was just 109 cents per litre (cpl) – a significant 28.8cpl drop from the March quarter.
In response, retailers hiked up their retail margins across the five largest cities, the report found, with the annual average gross retail margins for 2019-20 at their highest recorded in the 17 years the watchdog has been calculating them.
Annual gross indicative retail differences (GIRDs) – the difference between retail and terminal gate prices, for 2019-20 were also found to be 2.7cpl higher than the previous year across the five cities at an average of 14.7cpl.
ACCC Chair Rod Sims said the watchdog was concerned petrol retailers appeared to be holding on to higher gross margins but noted this may be due to pandemic’s significant impact on dropping petrol demand, which was 27% lower for the June quarter compared to 2019.
“There are some fixed costs involved in petrol retailing and it’s likely that businesses have increased gross retail margins, to some degree, to offset lower sales volumes,” Mr Sims said.
“While less petrol being sold during COVID-19 restrictions may be a contributing factor to the record high gross retail margins, we’re not convinced that this fully explains the levels we’re seeing.”
Average fuel prices have recovered slightly from the historic low in April, finishing the June quarter at an average of 119.3cpl, however, this is still down on the annual average. In regional areas, prices were an average 7.5cpl more than the five largest cities, at 116.5cpl for the quarter. Price differences between city and regional areas were found to be lessening, however, with the annual average gap down 2.5cpl on last year.
