Petrol prices

Unleaded petrol prices jumped to just under $1.50 a litre in Sydney and Melbourne yesterday and will pass that threshold over coming weeks if the new oil price record is maintained."There is no doubt that world oil prices will have an impact on Australian petrol prices, but if there is anyone thinking of using the spike in the market to make extra profits, they will be dealt with," Assistant Treasurer Chris Bowen said.The jump in petrol prices is a challenge both to the Rudd Government's commitment to stop price gouging in the petrol industry and to its economic strategy.Treasurer Wayne Swan said yesterday that in addition to the burden on motorists, higher petrol prices could flow through to other prices."Higher world oil prices may well put upward pressure on production costs and the costs of other goods and services, meaning the already difficult inflation challenge we've inherited from the previous government could be exacerbated."Economists expect the jump in petrol prices to flow rapidly through to inflation, forcing the Reserve Bank to raise rates further to slow the economy.Opposition Leader Brendan Nelson said the Government had an obligation to explain the spike in petrol prices to voters."Kevin Rudd spent most of 2007 trying to convince Australians he had a silver bullet for petrol pricing," he said."Mr Rudd now needs to explain in 2008 why it is that petrol that was put into a service station on one day increases by 12c a litre overnight."Motoring organisations said the jump in petrol prices on Wednesday night could not be justified."We've seen jumps of around 10c a litre, which is not warranted by this movement in world oil prices," NRMA president Alan Evans said.Australian Competition and Consumer Commission chairman Graeme Samuel said the NRMA's assessment may be correct and that he was concerned some recent increases may be excessive."My warning to the oil companies and the petrol companies is to say to them, 'Do not use the $US100 headline oil price as an excuse for artificially inflating prices because now you are subject to formal price monitoring'.”The Government gave the ACCC the power to monitor petrol prices shortly before Christmas after it had subpoenaed information from oil companies. It is also appointing a new commissioner to the ACCC to take charge of petrol pricing.It may take until next month before the ACCC is ready to start collecting price information, but Mr Bowen said it had the power to investigate any unusual price movements going back to December when he issued the instruction.Mr Samuel said the $US100 a barrel price was only about a 3 per cent increase and there was usually a lag of at least a week before higher oil prices were reflected at the bowser.“Any attempt to connect the current price increases to the $US100 barrel price of crude oil is ingenuous,” he said.Oil companies and retailers denied recent increases in petrol prices were the result of anything other than rises in costs.A spokesman for Coles Express said fuel prices were largely determined by prices beyond the control of retailers, including the oil price, the exchange rate, refiners' margins and taxes. “Fuel retailing is very competitive and motorists are keenly aware of even the smallest price differential,” he said.A spokesman for BP said the ACCC itself had found that their retail prices were based on international market movements: “We have been, and will continue to be, more than co-operative from the ACCC.” What do you think about the artificially inflated petrol prices? Do you believe the ACCC are doing their job effectively? 

A carbon tax is one of several so-called 'transparent' charges proposed by the RACQ to replace the Federal Government's 38.1 a litre excise charge.The idea of slugging motorists to combat climate change emerged yesterday as the Government prepared to release the findings of a study into petrol prices by the Australian Competition and Consumer Commission.The report is expected to show that motorists have in recent times been paying the price for reduced competition in the market.The RACQ's proposed carbon tax would be levied on petrol, with the revenue used by the big oil companies to buy credits to offset the industry's carbon emissions.RACQ external affairs manager Gary Fites said a 'fundamental overhaul' of motoring charges was needed to meet the challenge of climate change.“There needs to be a new paradigm which has benefits that are transparent and motorists can relate to and sends them clear signals about driving in congested conditions or using gas-guzzling cars,” Mr Fites said.The Government collects about $14 billion annually from its excise charge, of which only 15 in every $1 is spent on building, maintaining and planning roads.But in a separate report to be released today, economic consultants Access Economics said the Howard Government's decision to freeze the petrol excise in 2001 was 'bad policy.'It goes on to recommend the excise again be indexed to inflation.The ACCC inquiry heard how Australia's big four petrol companies were locked in a do-or-die battle for market domination, and motorists were paying the price.Oil giants Shell and Caltex were reportedly on a mission to destroy rivals BP and Mobil, the inquiry was told.Opposition competition policy spokesman Peter Dutton said Prime Minister Kevin Rudd had given the impression at the election that he would bring down petrol prices.“I believe leading Australians to believe that petrol prices would fall under Rudd was a lie,” Mr Dutton said. Is it fair to add a carbon tax just because someone chooses to drive an SUV, 4WD or even a van?  

Dick Honan, the man who sparked the political debate that led to oil companies being forced to offer motorists ethanol/petrol blends, has won again.BP announced yesterday it had contracted with Mr Honan's Manildra Group for the supply of 40 million litres of ethanol during the next year, with the possibility of extending the agreement for a further two years.Manildra Group is Australia's biggest producer of ethanol, which is a by-product of its wheat-based industrial starch business, based at Bomaderry in southeastern NSW.For years Mr Honan conducted an acrimonious debate with the major oil companies, accusing them of refusing to supply him with wholesale supplies of petrol so that he could distribute a 20 per cent ethanol petrol blend.The use of ethanol reduces the petroleum industry's share of the fuel market.In 2003, it was revealed that Mr Honan had met secretly with Prime Minister John Howard in August 2002 before the Government introduced a scheme under which ethanol would not attract excise until 2011, thus destroying an ethanol import market.That policy was designed to force oil companies to supply ethanol blends, so that the Government's uncosted 2002 federal election promise to develop biofuels industry of 350 million litres a year by 2010, originally seen as a boost to the struggling sugar industry, which could be achieved.While the federal Government has encouraged oil companies to blend ethanol with petrol, up to a maximum of 10 per cent, the NSW Government has mandated a 2 per cent ethanol level across the product range from October 1.Oil company representatives said yesterday this was not achievable across the whole of the retail business, as many petrol distributors and wholesalers would not be ready in time.Effectively, the switch to E10 blends will see the gradual wind-back of the existing 91-octane unleaded petrol, with the ethanol blends having octane ratings of about 94 , making them compatible with new, fuel-efficient car engines.BP said yesterday that, as a result of its deal with Manildra, it would offer new BP Unleaded 91 to NSW motorists at a 3c a litre discount through its Biorewards program.Currently, BP's 88 sites across Queensland, NSW and the ACT are being supplied with the new fuel. By the end of the year all 50 BP branded service stations in NSW will be selling the new product in place of regular unleaded petrol.BP Australia president Gerry Hueston said the company's actions demonstrated its commitment to create a sustainable future for biofuels in Australia.Both Shell and Caltex said yesterday that BP was well behind in supplying ethanol-petrol blends across Australia. 

Petrol giant BP Australia has conceded price cycles are confusing and causing 'angst' to the motoring public.However BP, in its submission to the Australian Competition and Consumer Competition's petrol inquiry, says the cycles are indicative of a competitive petrol industry and do benefit consumers.“However many consumers do not perceive it to be a good thing,” it says.It concedes that public perception of the industry is poor, but refutes the common criticism that petrol companies increase prices before weekends and public holidays.“Price movements leading up to long weekends are generally exactly as they would be in any other period,” it says.BP said movements in retail petrol prices at its outlets closely followed movements in the Singapore parity price. “At times we see divergence between movements in the Singapore price and local retail petrol prices,” BP says.However, it said divergences were the result of "market behaviour," and “offset each other over a period of time”.BP agreed with the statements made to the committee by Shell and Mobil, that a highly competitive market had contributed to Australian motorists paying among the lowest prices in the developed world.BP Australia, in its submission, also say, supermarket shopper dockets face an "uncertain future” because of intense competition in the supermarket business.An increasing number of imports have entered Adelaide since the closure of Port Stanvac, with the trend expected to continue.Price cycles are not unique to Australia, yet the “short and sharp” nature of the cycles is uncommon.The ACCC inquiry is expected to report to federal Treasurer Peter Costello by October 15.The committee will hold a public hearing in Adelaide on August 29. 

Petrol shopper docket schemes could be scrapped if Australia's consumer watchdog rules they are pushing up fuel prices.There is growing industry concern the schemes used by millions of supermarket shoppers to get 4 cents off per litre for their fuel bills may have backfired on motorists.Independent petrol companies and service stations, which blame shopper dockets for driving them out of business, have appealed to the Australian Competition and Consumer Commission.They argue the popular schemes are eroding competition and contributing to motorists being ripped off at the bowser.In Brisbane, supermarket affiliated petrol stations control an estimated 70 per cent of the unleaded petrol market. Skyrocketing petrol prices, which are biting household budgets, have become an election issue.An inquiry into the price of unleaded petrol was launched by the ACCC in June, which is also examining the structure of the industry, the extent of competition and barriers to 'efficient petrol pricing.' In its submission to the inquiry, Australia's largest independent petrol retailer United Petroleum said the shopper docket had lead to supermarkets "absolutely dominating" the retail market.“The ACCC must take steps to even up the playing field,” it said. It recommends the watchdog either scrap the scheme or restrict the discount to such a level that it cannot be used as a “predatory tool.”Analysis by Professor Joshua Gans, from Core Research, also raises doubts about the benefits of shopper dockets to motorists.“I urge the ACCC to take another look at these shopper docket schemes and use the data available to them to see whether these have improved or reduced the overall benefits of competition in petrol retailing,” he said.The Motor Trades Association of Queensland said the domination of the market by supermarkets and oil majors was impacting on “genuine sustainable competition”.It also expressed concern about the reduction in the number of service station outlets in small country towns, especially on major western highways.Dannie and June O'Connell, both 56 from Graceville, filled up their four-wheel-drive yesterday at a northern suburbs petrol station.The couple said they “benefited” from the discount petrol vouchers. “But we're not under any illusions that you pay more for your groceries to counteract for the fuel prices,” Mr O'Connell said. 

Fuel prices appear set to increase by the end of the month after the International Energy Agency warned that many refineries around the world seem unable to process sufficient quantities of crude oil.The Paris-based organisation, which acts as an energy adviser to 26 developed countries, made the comment after crude oil prices reached a 10-month high in New York on fears that refinery breakdowns would slow US petrol production.According to a survey published in the US, refinery output was just over 90 per cent last month, compared with more than 93 per cent at the same time last year.In Singapore yesterday crude oil for August delivery was at $US71.31 a barrel, down US10c on the New York close on Tuesday.The August contract had risen US32c, or 0.5 per cent, to $US71.41 a barrel during Tuesday, reaching its highest close since August 25.On the London market, which accounts for more than 80 per cent of the world's traded oil, a barrel of Brent crude was down US5c to $US72.88 a barrel.Both markets have been affected by the US Independence Day holiday, which delayed the scheduled release of data on US fuel inventories by one day.Demand for petrol in the US, the world's biggest oil user, usually peaks between June and August as summer holiday travel puts more cars on the road.Oil reached its record of $US78.40 on July 14 last year when increased demand coincided with the release of forecasts indicating an above-average US hurricane season.But prices declined 26 per cent in 11 weeks as holiday driving demand eased and the hurricane season passed without any major damage to oil and gas production assets.In its latest report the Australian Institute of Petroleum said that unleaded petrol prices across the country were trending down at 121.7c a litre.They have fallen 3c per a litre in the past month but are still ahead of the 118.5c a litre they've averaged during the past 12 months.The consumer watchdog, the ACCC, has been instructed by the federal Government to investigate why retail petrol prices have not moved in line with movements in the Singapore benchmark price for motor gasoline.The ACCC investigation will report by mid-October. 

Unleaded petrol costs have risen 5.6 per cent since this time last year, but hidden costs are the main culprits responsible for pumping up motoring budgets, the survey found.The RACV 2007 Vehicle Operating Costs survey said hidden costs such as servicing, insurance and loan interest rates on average rose up to 7 per cent compared to last year's survey.At the same time, depreciation figures show vehicles' value falling faster.After examining the 37 top-selling vehicles across 10 categories, the survey found the cheapest car to own and run was the Hyundai Getz at $116.54 a week.This was $5.34 more than last year's cheapest vehicle, the Kia Rio.The most expensive was still the Toyota Landcruiser GXL turbo-diesel, at $357.51.The Mitsubishi 380 ES was the most affordable family car at $200.44 a week, a weekly increase of $4.46.Meanwhile, lower price and service costs helped Ford Falcon outperform its rival Holden Commodore, costing $229.13 a week compared with $233.40.RACV Chief Engineer of vehicles Michael Case said the Federal Government's $1000 grant to LPG car purchases helped ease the overall running costs of these models.Although eight vehicles across the 10 categories managed to retain last year's rank as cheapest in their class, there were still some significant cost increases.For example, the Kia Carnival rose 14.7 per cent to $216.68, while the Honda CR-V cost $203.86 a week, a 7.4 per cent jump from last year's survey results.Mr Case said the survey showed the cost benefits of diesel and hybrid vehicles, which more motorists were considering investing in as fuel prices continued to skyrocket."A diesel Volkswagen Golf will save you around $2.95 a week - nearly $770 over five years," he said.""That's also a saving of around 11kg of greenhouse gas each week," he said."The Honda Civic hybrid meanwhile, provides a fuel saving of $9.46 a week and can save 17.9kg of greenhouse emissions."The survey data was collected in March and April.RACV calculations are over a five-year ownership period and are based on the average operating conditions for the private motorist, including travel of 15,000 km a year.

Once shrugged off as a minor irritant, the subject of fuel economy has become one of critical interest to the Australian heartland.Getting your vehicle, be it petrol or diesel, to go as far as possible on the least amount of fuel is ultimately going to put dollars back in your pocket ... but how do you do it?Most people think of fuel-economy driving in terms of special cars crawling along, with highly trained drivers gently brushing the accelerator only when absolutely necessary.Not true, says Holden engine management engineer Scott Doughty.Doughty is part of the team responsible for ensuring there is that balance of economy and performance real-world customers demand in their Commodores."The general rules for efficient fuel economy in everyday driving don't just apply to our cars," Doughty says. "Much of it is commonsense and the technology in modern engines is pretty much industry standard."Some of the golden rules are applicable to everyone: Keep the gears up, get into the high gears as early as you can, keep the engine revs down, all those sort of things."Many people, particularly those who have been driving for a long time, think that by driving with lower throttle openings but higher engine speeds they are saving fuel and putting less stress on the car."In fact the opposite is true. Lower engine speeds and greater throttle-opening — that is, a higher gear — is far more efficient so get to the higher gear quickly and stay there as much as you can."Increasing mass and drag is another sure way to spend more time in petrol stations."People fill their cars with all sorts of stuff and drag it around all over the place or they bolt a big roof rack on the roof — anything like that is going to make the aerodynamics less efficient and add to drag," Doughty says."I just don't think they realise the amount of fuel they are using. They don't need to do that. It is as simple as unbolting the roof rack or unloading the boot."However, the fuel-saving strategy is not restricted to high-tech or smaller engines. He says: "There is a degree of improvement you can get from any engine. You can achieve some pretty good economy, even on V8s."To prove that point Holden has each year run an efficiency drive from Sydney to the Gold Coast; almost 1000km of real-world driving. Each of the cars is set a fuel and speed target for each stage over a variety of conditions, ranging from city and highway to mountainous backroads.Some of the results are truly surprising — with V6 models returning figures in the 7.5L/100km range and V8s under 10L/100km.While the obvious purpose of the exercise is to show benefits of the Holden models, there are lessons to be learned for owners of most brands. Key to the results from the V6 engines was the Alloytec's throttle-off fuel saving technology; something that is now common in current-generation engines.Before the advent of the latest engine control units (ECUs), the use of gears to force engine braking brought no fuel benefit. With the new technology, the same behaviour will put dollars in your pocket.Doughty says idling in neutral or lifting off the throttle in high gears where the revs fall below 1600rpm is not going to aid fuel consumption significantly."Fuel is still being fed to the engine to keep it running. But if you throttle off and use the gears to keep the engine revs between 1600rpm and 2100rpm, the ECU cuts fuel to the engine, allowing the engine to be turned over by the drive wheels rather than fuel ignition in the cylinder chambers," he adds.The ECU re-opens the fuel feed when engine revolutions are moving out of the nominated range or the throttle is depressed.Doughty says that with variable valve-timing, cam-phasing, electronic throttle control and modern electronic control units the strategy can be used without negative effects on the engine."It may take a bit of an education program but it is certainly something that can be used on a daily basis," he says.While loath to quantify the possible dollar savings from more efficiency-conscious behaviour, Doughty has no doubt that most people could benefit significantly: "Fuel economy becomes 100 little things that together to make a significant improvement."Keep to the golden fuel rules1. Keep the car in as high a gear as possible and get to the higher gears as quickly as possible.2. Have a light touch on the throttle. For most applications 25 per cent throttle is quite adequate. Hard acceleration is the enemy of fuel economy.3. Look ahead and read traffic conditions. Plan to maintain momentum, reducing the need for excessive braking and subsequent acceleration.4. Monitor tyre pressures. Low pressures increase rolling resistance of tyres and use more fuel. You should keep to the manufacturer's specifications.5. Stick to the speed limit. High speeds use more fuel.6. Reduce mass and drag. You would be surprised how much unnecessary equipment accumulates in the boot of a car. Roof pods, racks and extended wing mirrors all minimise the efficiency of a car through the air. More weight and drag equals less economy. Remove the bits when they are not being used.7. Avoid idling as you are wasting fuel going nowhere.8. Keep your vehicle in shape; clean air filters keep impurities in the air from damaging the engine and can improve fuel economy.9. Don't turn on the airconditioner as a first response to heat; even the most efficient airconditioners expend a fair bit of fuel.10. When buying a car, consider its fuel economy.

The average this week was 113.3 cents a litre with petrol prices steady in urban markets but dropping for a 12th straight week in regional areas.But Commsec analyst Martin Arnold says what a steady oil market gives, the drought has taken away."With the effects of the drought and the third interest rate increase for the year impacting on household finances, falling petrol prices will be of little comfort," Mr Arnold wrote in a summary of the petrol market released today.While the average household is now $34 a month better off compared with six months ago, and the rural economy also has benefited from a significant drop of 1.5 cents in diesel prices, the changes would go largely unnoticed, he said.Even in urban areas, Mr Arnold said, savings made on petrol would not be going back into the retail economy."These savings are more likely to be saved, or go to increasing mortgage or rental payments, rather than being spent."AAP

Australians are now paying an average of 117.6 cents per litre for unleaded petrol.Commsec chief equities economist Craig James says the benchmark Singapore gasoline price has fallen twice as far as the Australian pump price."In addition, Australian wholesale or terminal gate prices have fallen by a cent a litre over the past week and motorists have yet to see that reduction passed on at the petrol pump," Mr James said in his latest regular analysis of the petrol market."CommSec expects average Australian petrol prices to level out around $1.10-1.15 a litre in the next fortnight."The cheapest capital city petrol price is in Brisbane, where motorists are paying 104.7 cents per litre, while the most expensive capital city is Darwin at 127.9 cents per litre.AAP