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AAA gets behind push for lower petrol prices

Bowser woes: Motorists are still paying high petrol prices.

Oil companies defend pricing situation

General News logo17 Jan 2007

THE Australian Automobile Association and motoring organisations have welcomed calls by the Australian Competition and Consumer Commission for petrol prices to fall immediately in line with sustained reductions in world prices.

However, fuel companies have laid the blame for the high prices squarely on the petrol stations themselves, saying that there is usually a delay of up to 10 days before price cuts are passed on.

Earlier this week the ACCC said oil companies had not passed on savings as crude oil prices worldwide continue to fall.

Even the acting Prime Minister, Mark Vaile, has added his weight this week to the argument that prices should come down.

International crude oil prices have eased 30 per cent in the past six months, off from the volatile highs of 2006 as the US experiences a mild winter and demand eases in other northern hemisphere countries.

Motoring organisations in Australia say the $1.18 a litre average price of unleaded petrol is up to up to 10 cents a litre too much.

The new executive director of the AAA, John Metcalfe, said it was timely to see ACCC putting oil companies on notice that they should be reflecting the drop in world prices at the petrol pump to provide some relief for motorists.

"The current Singapore refined petrol price – the benchmark for Australian petrol prices – is around $A76 a barrel (it was around this price in June 2005)," Mr Metcalfe said.

"Then, the average capital city petrol price was around 107cents per litre, whereas today – normally a low point in the weekly cycle - it is 114 cents per litre.

"Prices should be more than 7cents per litre lower on average across Australia.

"Australian motorists are the ones suffering due to this failure to reflect lower world prices, and it is good to see ACCC Chief, Graeme Samuel, putting the oil companies on notice.

"AAA and Australian motoring clubs have long called for the ACCC to become more active in monitoring and reporting on the oil companies and we welcome this intervention." AAA figures on petrol prices show that the only capital city that has made any move to lower prices in line with international benchmarks is Hobart – whereas other capital cities are from 4cents per litre to 13 cents per litre higher than they should be, with the average for capital cities being around 7 cents per litre higher.

Mr Metcalfe said the oil industry needed to come clean "are motorists receiving any new service that justifies higher prices? The answer is no", he said.

"AAA has been in regular contact with ACCC in the past 18 months on our concerns about petrol prices. We hope ACCC’s recent demands represent a new positive direction in its approach to price monitoring."

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