The ACCC and fuel prices in Australia

Australia is a bloody big place with a small population spread mostly along the coast lines, in particular the Eastern coast and southern. The country has large open spaces, big highways and bugger all in the middle of the country. It takes a lot of fuel to get around. Melbourne to Sydney is 900kms and it takes about 9 hours to drive (without breaks). We need a lot of juice to travel this country and people living in regional areas in particular are reliant on cars and trucks because of the crap public transport infrastructure outside of metropolitan areas. So when I see fuel prices going up and down cyclically that has nothing to do with wholesale prices and note that the big fuel retailers are making 24c a litre on fuel that costs us $1.40 AUD/L then I get cranky. I also get cranky because so much of that fuel price is excise and taxes. The current fuel excise is as follows (from the ACCC website here: https://www.accc.gov.au/consumers/petrol-diesel-lpg/about-fuel-prices) for Unleaded (regular or premium) and Diesel 41.2c/L and 13.4c/L for LPG. Plus the usual 10% GST. So our $1.40/l for diesel is actually 14c of GST and 41.2c of excise which means that the fuel itself is $0.848/L.

Over a third of our cost is taxes either in the form of the GST (Goods and Services Tax) or the fuel excise. And the retailers happily put the price up or down on a whim. Currently the retailers are making a huge 24c/L in profit off the selling price. This is up from quite low margins in the past. It also means that the 84.8c/L is one quarter profit. Not bad eh? I bet that the excise is passed straight along and so is GST so the retailers are doing well.

I’m not cranky that they’re making a buck. What shits me is that the consumer is getting screwed by artificial price changes left and right and our government agency supposed to stop this – the ACCC – is doing bugger all about it. Imagine if the price of beer went up on a Wednesday or near a weekend. It’s always $5.20 for a schooner (or pint depending on your state) but just for weekends it went up 10% to $5.70. There would be riots in the streets! But fuel jumps up and down and no-one says boo. Has the wholesale price (set overseas) changed in this very short amount of time? Are the stocks of beer (fuel) so short that the immediate price change is reflected in that? No! Of course not. There is a large amount of fuel purchased at one price and then this is sold, more is bought later and the price might change – so the price for the motorist changes. But it doesn’t happen with the speed the retailers make it happen.

I write this because it puts so much pressure on our household to have such variability in costs. We’re not rich by any stretch of the imagination and there is no public transport available for us to get around with, so we’re stuck with the cars. I can’t help but feel for families out there doing it tougher than we are and how much pressure it must put on them. I’m not against a business making a buck, but I am against business making money off struggling Aussies. I’ve written to the ACCC about this and I’m going to continue writing to them. I actually had no idea that so much of our fuel price was government taxes. I think 41c/L is pretty bloody steep and a “Please Explain” is warranted. Where does all that money get spent? It must be a fortune! And sadly fossil fuels are a critical part of our day to day life at the moment so it’s not like there is an alternative for us to go for. Even electric cars with great range will barely get me to our furthest office and that’s the benchmark for my needs.

Join with me and question this cost – after all it affects all Australians. Even if it’s a letter, email or call to a local, state or federal representative or to the ACCC itself, let’s get something happening around this sad state of affairs.

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