ACCC found the petrol price is right

A watchdog report has found that we are not being ripped off at the bowser. The Australian Competition and Consumer Commission (ACCC) have released the findings of its first annual report into unleaded petrol prices.

The report found that Australian petrol prices were still relatively low compared to international prices. The report has enabled the ACCC to further explore, factors influencing petrol prices, and the industry's profits, revenue, and costs, after releasing recommendations from its 2007 petrol price inquiry.

The ACCC said that the unleaded petrol price closely followed the price of Singapore Mogas 95, which is used as the regional benchmark for prices.

ACCC commissioner Joe Dimasi said in a statement that movements in Australian petrol prices are determined by international petrol prices. In the period between mid-July and mid-December retail prices had fallen by at least the same amount as Mogas prices had fallen.

There was however a short period between December 2007 and October 2008 that petrol prices deviated from the international price. It was also found when city and country petrol prices were examined that prices in country towns and the three smaller capital cities were six to seven cents a litre more expensive than the five largest metropolitan cities. The differences were due to a combination of factors including higher transport costs, lower volumes and less competition in the smaller centers.

The federal government has asked the ACCC to produce two more annual reports into petrol prices within the next two years.

Published on December 12-rd, 2008 in Financial Planning
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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