Fuel price crisis: some local sellers caught in the middle

FUEL prices have increased markedly all over Australia since the start of the Iran war.

The Federal Government has explained this increase by the fact that ships have been unable to transport oil through the Strait of Hormuz, but what is not so clear is why fuel prices sometimes vary significantly between retail outlets in the same area.

Gloucester has four fuel retail outlets, and motorists are likely to have noticed that prices from one outlet to the other sometimes vary significantly.

On 1 April one Gloucester service station was charging 253.8 cents per litre for unleaded petrol whilst it was 320.9c/l at another.

When there is such a huge price variation it is tempting to blame the service station owner, and comments from the authorities are often directed at retailers.

“We expect petrol retailers to explain to us and the Australian public how they have arrived at their prices,” Australian Competition and Consumer Commission (ACCC) Commissioner Anna Brakey said recently.

But such blame might sometimes be misplaced.

NOTA spoke to one retailer whose prices were recently much higher than nearby service stations, and was informed that the price they were charging was simply the wholesale price they had been charged plus 10 percent.

This information was confirmed by the invoice from the supplier, Access Fuels.

The retailer told NOTA that because they were forced to charge such high prices the business was experiencing significant loss of custom.

But why, NOTA wondered, was this supplier charging such high prices?

Was it a case of price gouging?

“Access Fuels is an Independent Fuel Distributor founded in Bulahdelah on the Mid North Coast and has been servicing customers across the region including Gloucester for over 40 years,” said a spokesperson for Access Fuels.

“The vast majority of the volume of Access Fuels comes from the ‘Spot Market’, meaning that it is not under a supply contract with an importer or supplier.

“This has worked successfully for the last 16 years and has been the bedrock of how Access Fuels has kept competitive pricing to the regional areas.

“Unfortunately, the ‘spot’ market prices have increased drastically, well in excess of the contract price for fuel in recent weeks.

“Supply availability has also been greatly reduced.

“Access Fuels has not changed any of our pricing methods for our customers and are just passing on the costs of product we are unfortunately being charged, when we are able to get product to supply.

“This has been extraordinarily frustrating for us as a wholesale business and clearly for the retail customers that we supply to.”

By John WATTS