The former head of Australia’s consumer watchdog has torpedoed petrol stations’ excuses for raising prices already due to the war in Iran, warning fuel companies seeking to use the situation as a smokescreen should be investigated.
While fuel prices have begun spiking in Australia’s two largest cities, some past $2.20 a litre, former Australian Competition and Consumer Commission chair Rod Sims has declared the timeline to link the rises to Middle East conflict does not add up.
Despite oil prices jumping 10 per cent during the past week amid the widening conflict in the Middle East, experts say it takes at least a week for global market swings to reach Australian bowsers.
“There can’t be any cost increases flowing through yet,” said Sims, the longest-serving chair in the ACCC’s history. He labelled suggestions that this week’s oil volatility has forced immediate hikes as “just not yet true”, and “misleading to consumers”.
“I’m sure [the ACCC] will be looking at it very closely,” he said.
The widening war in Iran has intensified concerns over global supplies of crude oil – the natural resource refined into petrol and diesel – and is expected to ultimately push up transport costs for consumers in Australia, even if the conflict is short-lived.
However, a new analysis from the National Roads and Motorists Association says more than half of the service stations in Sydney and Melbourne have moved to hike prices prematurely, selling regular unleaded for 5¢ to 10¢ above expected levels at the peak of both cities’ price cycles. This comes despite a direct warning from the Albanese government that price gouging will not be tolerated.
Australia’s major petrol-station operators – Ampol, Viva Energy, BP and ExxonMobil – all refused to comment.
Australian fuel prices go through cycles of varying durations, during which retailers progressively discount their fuel by a few cents each day to compete for market share until prices bottom out, then spike again by as much as 25¢ to 40¢ a litre in one day. Both Melbourne and Sydney coincidentally reached the peak of their regular price cycles just as the United States and Israel launched their attacks on Iran.
Industry representatives for Australian fuel retailers said global markets for refined fuels had been rocked by “sharp price increases in recent days”, and price cycles had generally been trending up since February.
“Fuel retailers don’t all buy fuel the same way. Some purchase on a daily spot price, while others buy on contracts based on 7-day, 14-day, 21-day or 28-day price averages,” said Rowan Lee, chief executive of the Australasian Convenience and Petroleum Marketers Association.
“This means some retailers see international price changes immediately, while others experience them with a delay.”
NRMA spokesman Peter Khoury said average fuel prices across most of both cities’ service stations were “way over where they should be” at this stage of the cycles, given it was too early for so many retailers to have felt the impact of a 5.5¢ rise in wholesale prices since the conflict in Iran over the weekend.
“Neither a daily spot price nor a 14- day contract purchase justifies half the service stations in Australia’s three largest capital cities currently selling fuel at 60¢ or 70¢ per litre higher than what they bought it for at the terminal gate price, depending on when they restocked their tanks,” he said.
The regular unleaded price in Melbourne on Thursday was $2.09, NRMA data shows, while Sydney has become home to the most expensive fuel in the country with an average of $2.13 per litre
Two Sydney outlets were charging almost $2.28 a litre for unleaded on Thursday afternoon, and a growing number of retailers were blowing past the $2 mark.
“Half [of the service stations] are exorbitant right now, meaning the other half … is seeing a rush to those service stations because the discrepancy is so high,” Khoury said.
“It’s clearly working against Sydney motorists at a time when they can afford it the least.”
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Nick Toscano is a business reporter for The Age and Sydney Morning Herald.Connect via X or email.
Daniel Lo Surdo is a breaking news reporter for The Sydney Morning Herald. He previously helmed the national news live blog for The Sydney Morning Herald and The Age.Connect via email.
