FORSTER’S high fuel prices are attracting increased criticism across the Great Lakes as local motorists continue to pay more at the bowser than residents in neighbouring areas.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
A snapshot of fuel prices in the region has revealed Forster’s prices have been consistently higher over the past six months.
While prices in Newcastle, Taree, Nabiac and Bulahdelah have reflected the ups and downs of a suppliers wholesale cost (the TGP), Forster’s fuel prices have remained more or less static. As a result, local consumers have been paying some of the highest prices in the state to fill their tanks.
While prices in Newcastle, Taree, Nabiac and Bulahdelah have reflected the ups and downs of a suppliers wholesale cost (the TGP), Forster’s fuel prices have remained more or less static. As a result, local consumers have been paying some of the highest prices in the state to fill their tanks.
“It just stinks” said Wendy Machin, deputy president of the National Roads and Motoring Association (NRMA).
“There’s no rational reason for setting prices so high.”
The Australian Institute of Petroleum states that Australian wholesale prices for petrol and diesel are not linked to crude oil prices, but are instead linked to Singapore’s prices plus shipping costs and Australian taxes. Taxes currently include an excise of 38 cents/litre, plus 10 per cent GST. This all contributes to the Terminal Gate Price (TGP), which is topped up by insurance, wharf and terminal costs, and a wholesale marketing margin. The NRMA said that the TGP represents around 95 per cent of the retail price paid by the consumer at the bowser.
Forster’s fuel comes from the Newcastle fuel depots, which according to Caltex’s Terminal Gate Pricing webpage is hovering around 120 cents/litre. This is a 30 cent drop since six months ago. But the average price in Forster has only fallen 2 cents/litre over the same period, making it the fourth most expensive town out of the 54 surveyed by the NRMA.
The NRMA believe that considering the TGP, Great Lakes motorists should not be paying more than 135 cents/litre for regular unleaded.
At the time of writing however, Forster’s average fuel price for regular unleaded was sitting at 153.9c.
The Australian Competition and Consumer Commission (ACCC) said that fuel prices are generally higher in regional Australia compared with the larger capital cities because of its lower population and subsequent demand, resulting in few outlets and less competition; costs for transport and fuel storage; less demand for convenience sales like drinks, food, and newspapers; and the location of outlets.
Breaking this down a little, the NRMA costs the transport of fuel to regional NSW as no more than four cents per litre. Depending on their circumstances, retailers make between two and four cents for every litre of fuel sold, but the prices themselves are mostly preset by external powers beyond the retailer, such as the supplier.
The ACCC and the NRMA said that independent fuel retailers often encourage competition. But Tuncurry Matilda Blue’s independent fuel retailer Mark Smith said that he does not have a say in what prices are set.
“When I start in the morning, I’m told what to pay the supplier per litre, what to charge the consumer per litre, and what I will make per litre” said Mr Smith.
“I would love to see lower petrol prices, because then people would come and buy more petrol. But I make more money if you come in and buy a can of coke, than if you fill up your whole tank of petrol,” he said.
According to Caltex’s spokesperson Sam Collyer, Forster has eight service stations, for which Caltex is responsible for prices at one. Woolworths price the Woolworths Caltex, and an independently operated Caltex prices their own.
Taree has around 16 service stations, for which Caltex is responsible for fuel prices at two. It also decides the fuel price at Nabiac. Both Taree and Nabiac have prices consistently lower than Forster. Mr Collyer attributes differences in fuel prices between regional towns to different volumes of customers, how much fuel they purchase, and the location of the service centre.
“A site on a major highway, for instance, tends to sell substantially more fuel than it would if it were located in a town that had a smaller number of potential customers” he said.
Mr Collyer explained that if a site sells more fuel, then the operator may choose to set a lower price per litre than a site in a different town that sells less fuel and therefore needs to recoup more money per-litre.
“Sales of convenience products can also assist a service station operator to cover operating costs at the site such as rent, wages, power and maintenance” he said.
With the oncoming summer holidays, an increasing amount of Great Lakes Advocate readers have expressed concern in letters and online about Forster Tuncurry’s petrol prices. Although regional areas are not privy to the weekly price cycle discrepancies enjoyed by major cities, the NRMA said that petrol prices over the holidays should continue to fall.
Wendy Machin said the NRMA will continue to monitor the situation in Forster, but the ACCC’s spokesperson Duncan Harrod pointed out that high prices themselves are not evidence of anti-competitive behaviour.
“The best thing to do is follow Newcastle, Canberra, and Coffs Harbour’s example” said Ms Machin.
“Try to get a campaign going using social media, encourage locals to report petrol prices and support the cheapest retailer. This creates competition and can bring the price down”.
So much so that earlier this year Newcastle’s name and shame social media campaign brought prices down, in some cases 10 cents/litre, taking Newcastle prices from the 44th lowest in the state, to the sixth lowest. Similarly, within three hours of a Costco fuel station opening in Canberra, a Caltex dropped its price by 14 cents to 1.29c/litre.
“I don’t know about the longterm impact, but at least it’s something," Ms Machin said.
The NRMA’s Bowser Buster website: mynrma.com.au/bowserbuster.
Regional fuel snapshot from Friday December 12, 2014
PETROL:
Forster 153.9
Bulahdelah 143.9
Taree 145.1
Newcastle 137.2
Sydney 126.0
DIESEL:
Forster 157.4*
Bulahdelah 145.9
Taree 145.2
Newcastle 145.8
Sydney 140.3
*Highest in NSW of NRMA’s 54 towns)