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Australia's biggest motoring organisation says Sydneysiders are being taken for a ride at the petrol bowser, with a price difference of 70 cents per litre at some outlets today.
Key points:
- The average petrol price in Sydney today is just under $1.20
- That's about 30 cents higher than Adelaide
- Expert Dr Lurion De Mello says fuel companies deserve greater scrutiny
Global oil prices have hit 18-year lows, but the National Roads and Motoring Association (NRMA) says many retailers have not passed the savings on.
New figures show the average gap between the wholesale and pump price in Sydney is 30 cents today.
Motorists in the NSW capital are paying between 88 cents and $1.58 a litre.
Global oil prices have been decreasing since December amid the COVID-19 outbreak, and a price war between large producers Saudi Arabia and Russia.
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Peter Khoury from the NRMA encouraged consumers to shop around.
"We're now seeing the gap between the cheapest and the most expensive fuel is a massive 70 cents a litre," he said.
"We've never seen that before in Sydney — that's the equivalent to a 40 dollars extra [in some tanks]."
He said the average pump price in Sydney was just under $1.20 — 30 cents higher than in Adelaide.
Dr Lurion De Mello from Macquarie University's Business School said retailers were fixated on their profit margins.
"When crude oil prices go up the retailers jack up their prices overnight, but it always takes longer — up to a month — for prices to come back down when the crude oil price drops," Dr De Mello said.
He said fuel retailers usually operated on profit margins of 15 to 20 per cent, but that the current margins were significantly higher.
He expected fuel prices to drop in the coming weeks as demand eased on the back of new Coronavirus social-distancing laws.
In the meantime, fuel companies needed greater pressure to drop their prices.
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"There has to be more pressure on the fuel industry; the banks cop a lot of flack when they don't pass on the interest rates," he said.
Dr De Mello said consumers frequently overlooked independent fuel retailers and this could be costing them.
"People have a misconception they're going to get a lesser quality fuel at independents but that's incorrect," he said.
Topics: business-economics-and-finance, community-and-society, health, diseases-and-disorders, respiratory-diseases, diseases, sydney-2000, australia, nsw
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