Australian Capital Territory stung in petrol pricing

October 30, 2013

Fleta Page

Reporter at The Canberra Times

Território da Capital Australiana, Comunidade da Austrália

Canberra is one of 28 regions nationally where motorists are more likely to be “ripped off” paying for petrol according to a study by the University of New England Business School.

The study monitored petrol prices at 111 locations across the country, looking at daily and weekly price data from 2007 to 2012, and identified a phenomenon it labelled rocket/feather pricing.

The phenomenon sees pump prices rocket up when wholesale fuel prices increase, while the downward price pressure is passed on to consumers much slower, descending like a feather.

“It appears that the vast majority of petrol stations are doing the right thing, however around a quarter of the service stations reviewed were participating in this rocket/feather pricing,” Professor Abbas Valadkhani said.


In the ACT and NSW combined, the study found 30 per cent of petrol stations were guilty of it. “The only place where everyone is doing the right thing is in Western Australia. While we can’t prove the connection, Western Australia is the only state with a Government backed Fuel Watch body.”

The study, published in the Energy Economics journal, used a complex formula to predict the expected price of petrol in each location, which it compared to the actual price, allowing it to see how fast each market corrected itself. In Canberra, it found that prices would come down nearly five times slower than the rate of increase.

But that “asymmetric pricing” is just one issue in the capital, which also has a higher than expected gross profit margins.

Other locations for asymmetric pricing include the Gold Coast, Hobart and Brisbane metro areas and Cooma.

The Canbera Times

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