Australia's petrol prices hit lowest level in 21 years during COVID-19

Australia's petrol prices have fallen to their lowest level in 21 years, when adjusted for inflation.

The latest petrol monitoring report from the Australian Competition and Consumer Commission (ACCC) shows the average retail price for petrol in the June quarter was 109 cents per litre – a decrease of 28.8 cents per litre.

Of course, this new low is adjusted for inflation – meaning while the actual list price of petrol in 1999 was lower, it was more expensive relative to current wages and the cost of living.

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For context, the price of petrol in 1999 in Australia's capital cities hovered around 70 cents per litre.

Despite the fall, the ACCC reported it believed gross retail margins – that is how much mark-up a supplier receives from selling the fuel to a customer – has hit an all-time annual high.

Across Australia's five largest cities, the ACCC found that service stations were on an annual average taking home 14.7 cents per litre.

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This retail margin still has the consumer watchdogs concerned.

"Many Australian motorists benefited from lower petrol prices over the first half of this year, but we have some concerns about the higher gross margins that petrol retailers seem to be holding on to," ACCC Chair Rod Sims said.

One reason for this, reasons the ACCC, is that petrol retailers were attempting to recoup costs of employee wages and supply during COVID-19 where remarkably small amounts of fuel were sold.

"There are some fixed costs involved in petrol retailing and it's likely that businesses have increased gross retail margins, to some degree, to offset lower sales volumes," Mr Sims said.

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"While less petrol being sold during COVID-19 restrictions may be a contributing factor to the record high gross retail margins, we're not convinced that this fully explains the levels we're seeing."

"Owning and operating a car is a major expense at the best of times, let along during the current economic crisis, and Australian drivers want to see lower global oil prices passed on to them in a timely manner."

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The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.

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