Industry News

Feds are watching fuel prices

The Australian competition watchdog will be monitoring fuel prices following the Budget fuel excise cut.

This week it was announced by the Federal Government that there would be a six-month reduction in the fuel excise.

The excise on petrol and diesel will be cut from 44.2 cents per litre to 22.1 cents per litre and is expected to ‘flow’ through to lower petrol prices over the next fortnight.

Under direction from the Federal Government, the Australian Competition & Consumer Commission (ACCC) currently monitors fuel prices, costs and profits and reports on these each quarter. The ACCC can compel refiners, importers, terminal operators, wholesalers and retailers to provide information relating to fuel prices where necessary.

“We expect that fuel retailers will pass on the cut in fuel excise to reduce the price at the bowser as soon as possible, as existing petrol stock levels are used up,” said ACCC Chair, Gina Cass-Gottlieb.

The ACCC’s petrol team is expected to focus on price monitoring work for the next six months to determine how retailers are passing through the excise reduction to consumers.

The excise has reportedly already been paid on existing stocks of fuel which will be run down first.
This lag in the adjustment of wholesale prices is shorter in larger cities and sites with large turnover, but is often longer in regional locations where lower volumes of fuel are sold and fuel is replenished less frequently.

The major component of wholesale prices is the international price of petrol, according to the ACCC, which is largely influenced by the continuing fluctuations in international crude oil prices. The changes in the AUD/USD exchange rate also influences the petrol prices in Australia.

Any change in these factors would mean that the change in petrol prices may differ at certain times from the reduction in excise of 22cpl.

In other news, more than $4 billion in potential investment has been proposed in response to a recent call for expressions of interest for the the Hunter and Illawarra Hydrogen Hubs.

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