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Petrol price spike hits east coast

They might not be building many cars in Adelaide these days, but car owners in the City of Churches are getting the cheapest petrol in the country.

And it seems that the big petrol companies are forcing drivers in Brisbane and Sydney to subsidise the discounting in South Australia.

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A price war in the Adelaide market in the last three months has driven the average price to under $1.39 a litre.

But Adelaide is the only place in the nation where petrol prices are on a consistent slide.

newdaily_140514_petrolThe latest data released by the Australian Institute of Petroleum shows the average bowser price across Australia soared more than five cents to $1.49 a litre last week even though international oil prices were still trading near a six-month low.

Average prices rose in the largest capital cities, with Brisbane (up 14.5 cents) recording the biggest hike.

Prices fell in Adelaide, Perth and Canberra.

Adelaidians paid an average $1.39 a litre – five cents less than the second week of October.

In a stark contrast Brisbanites paid almost $1.53 a litre last week.

The Royal Automobile Club of Queensland (RACQ) believes that movements in retail price cycles in Brisbane have become more extreme this year.

“The whole price cycle system seems to be evolving,” said RACQ’s head of public policy Michael Roth.

“Brisbane prices have increased dramatically to a new peak in the last week following an extended period where we saw the retail prices trading lower than the wholesale cost.”

Mr Roth highlighted variation in the level of competition among retail petrol sellers as the main reason for regional price differences in Australia.

“The wild fluctuations in each of the city markets is also influenced by competition cycles in each market,” Mr Roth said.

“In Adelaide the level of competition is strong so the price movements are less extreme compared to other cities.”

According to the Australian Competition and Consumer Commission, local petrol prices are linked closely to the movements in a Singapore benchmark known as Mogas95. And that benchmark fell to a six-month low last week.

Mr Roth said the depreciation of the Australian dollar had meant that the full impact of falling world oil prices for local petrol customers had been crimped.

“Some of our members are concerned about how the prices have gone up because of expectations set by the falling wholesale price,” he said.

“But the drop in the Australian dollar has meant that our prices haven’t dropped as much as other countries.”

Earlier this year the competition regulator launched legal action against the petrol industry, alleging that market participants such as Caltex, BP and Woolworths were sharing sensitive price information that was not available to the public.

The ACCC is concerned that information sharing between the retailers may have caused consumers to pay more for petrol.

Mr Roth said some organisations such as the RACQ also had “limited access” to the information, but were not permitted to make it publicly available.

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