Fuel prices are a farce

By Charmayne Allison

LOCALS are still being bled dry at Echuca-Moama bowsers, despite fuel prices in Melbourne plummeting to record lows for 2018 during the holidays.

Surprisingly, it’s a struggle not shared in many neighbouring regional hubs, with Shepparton, Bendigo and Seymour also experiencing a welcome dive in prices.

At the time of writing, had the average price of petrol in the twin towns pegged at 143.9 cents per litre (CPL).

In stark contrast, metropolitan stations averaged 115.3 CPL, with several stations on the edges of Melbourne hovering around 110.

While in Shepparton, Bendigo and Seymour, average petrol prices sit as much as 30 cents lower than Echuca-Moama at 120.1, 118.1 and 113.9 respectively.

Echuca’s Bill Harriss is among the many locals outraged by this disparity.

‘‘I was in Shepparton on Monday and it was 119 for unleaded petrol, not including discounts,’’ he said.

‘‘So while I’d normally spend $74 filling up in Echuca, it cost me only $53 to fill up there.

‘‘RACV often says it’s transport costs that determine petrol prices.

‘‘But the distance is no different between Melbourne and Shepp and Melbourne and Echuca.

‘‘We’re consistently getting ripped off here.

‘‘I’m just shocked they haven’t reduced prices here as well, it makes no sense.’’

RACV said the discrepancy between regional and metropolitan prices was due to the contrast between the fuel price cycle in the city and ‘‘sticky pricing’’ in regional towns.

While competing fuel stations’ attempts to undercut each other can see Melbourne prices plunge, RACV said this fluctuation tended not to affect regional areas.

However, this does little to explain the recent inequality between prices in regional towns.

‘‘The price cycle is ... driven by competing fuel stations attempting to undercut each other in order to sell more petrol,’’ RACV vehicle engineering manager Michael Case said.

‘‘When this discounting reaches an unsustainable level where profit margins are very low or even running at a loss, the fuel price gets driven back up again by some of the retailers.

‘‘Wholesale pricing has little effect on the short term of the petrol price cycle, primarily affecting the peaks and troughs which can be seen when analysing the long term trends.

‘‘(In most regional towns across Victoria) prices remain consistent for extended periods regardless of Melbourne fuel price cycle trends or wholesale prices.

‘‘Overall, regional towns tend to respond slower to changes in wholesale prices.

‘‘Reduced competition and lower sales volumes compared to metropolitan Melbourne may contribute to the slower price movements and absence of cyclic behaviour in regional areas.’’