D: Price differences (FAQ)
1) All the service stations in my town are charging the same price - is this collusion?
2) Is it illegal to monitor a competitor’s prices and charge the same price?
3) What is the retail price of petrol made up of?
4) How can prices be so different in the same town/suburb?
5) How can prices be so different for the same brand?
6) Why is there such a price difference between ULP and LPG/Diesel/PULP/ 98RON?
7) What is the price difference between Perth and the eastern states capitals?
8) The price on the price sign is different to the prices shown on FuelWatch/Media?
Back to FAQ main page.
1) All the service stations in my town are charging the same price - is this collusion?
When a small area has similar or identical prices across their service stations, it is usually a case of 'parallel pricing'. This means a retailer, seeing a competitor has raised prices, has decided to match that price to attract more customers or improve profitability while not pricing themselves out of the market. Similair retail prices may also reflect that retailers have purchased fuel at the same wholesale price, and have similair business costs.
2) Is it illegal to monitor a competitor’s prices and charge the same price?
Not if it is coincidental or parallel pricing (see previous question). However, price fixing or collusion is illegal. The Australian Competition and Consumer Commission is responsible for administering the legislation that prohibits collusive pricing practices. Where evidence is obtained to support a claim of price fixing they should be contacted on 1300 302 502.
3) What is the retail price of petrol made up of?
Fuel retail prices are made up of the wholesale price, excise, GST and retailer's margin (costs and profit). Click on the link for a more detailed picture of petrol prices.
4) How can prices be so different in the same town/suburb?
As with most commodities, competition, supply and demand influence fuel prices. Competition is the main reason for the variety in petrol prices. FuelWatch encourages competition so consumers can buy from the more competitive/cheaper retailers. Use our 'Quick Search' service to find the cheapest retailer in your area. You can also subscribe to our FREE personalised email, which lists the cheapest retailers in your area plus alerts you to price hikes.
When price cycles are occurring, different companies "hike" their prices on different days. This can mean prices vary widely between retailers in the same area, on the same day. By using the FuelWatch service to access prices in your local area, you can take advantage of these variations in pricing strategies.
5) How can prices be so different for the same brand?
Petrol is like any commodity and retailers are free to set their own prices. Even though a site may be branded a particular way the station may still be owned independently or it could just be a marketing strategy of the petrol company. In some cases petrol companies have used pricing strategies to be the cheapest and the most expensive, particularly on a price hike day. This is why we strongly encourage people to use FuelWatch to check prices before you fill up your car and make sure you are getting a competitive price.
6) Why is there such a price difference between ULP and LPG/Diesel/PULP/ 98RON?
It largely depends on the ULP price cycle which has high peaks and low troughs. The other fuels do not have such a high turnover of fuel and hence are marketed with a much more stable pricing structure.
7) What is the price difference between Perth and the eastern states capitals?
Perth prices have been, on average, cheaper since 2004. Previously Perth ULP prices were higher than the Eastern States.
In 2007, the ACCC released a report based on their Inquiry into Unleaded Petrol Prices which showed that Perth motorists saved about 2 cents per litre (cpl). This is equivalent to $32 million dollars being kept in WA pockets each year.
FuelWatch believes WA’s transparent fuel prices and 24 hour rule have helped Perth to maintain lower prices. Fuel retailers in the other states are not required to notify their fuel prices and are able to change their prices without notice, as often as they want, at any time throughout the day. With the 24 hour rule in WA, motorists are guaranteed that fuel prices will be the same all day plus are able to freely access the price information from the FuelWatch services.
8) The price on the priceboard is different to the prices shown on FuelWatch/Media?
Please contact us so we can investigate further.
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