Long-time petrol station owner reveals price differential secret
PRICING at Clarence Valley petrol stations is not up to local operators, but dictated from head office, says a Grafton operator with 35 years in the business.
South Grafton Liberty owner Robert Cook has been selling petrol in the Clarence Valley since the 1980s and has worked for a big petrol company and as a private operator.
He says the failure of stations in Grafton to pass on the effect of the plummeting international oil price was a result of the deals struck between the major supermarket chains and the oil companies in the 1990s.
“I’d be one of only two or three independent operators in Grafton now,” Mr Cook said.
“Early last week I was selling diesel for 129.9 cents a litre, when I saw in town the price down to 123.5 cents. I dropped my priced five cents straight away.”
Mr Cook said because most station operators are now just employees of the major companies, rather than independent operators, they don’t care if the station up the road is selling at a lower price.
“They don’t care because the price is set by a company representative in Brisbane, Sydney or Melbourne office looking at a spreadsheet, not the price of a competitor up the road,” he said.
He said the big companies set prices differently around the state, dropping prices in some places, while keeping prices high in others.
“While some places get lower prices, others don’t,” he said. “Overall the major companies know how much they’re going to make and what they charge in particular areas doesn’t change that.”
He said the exception could be owners in outlying areas offering lower prices to attract customers.
“A place like Tucabia, for example, where I heard the price is under $1 a litre, would not be selling a lot of fuel compared to bigger places,” he said.
“And now with all the restrictions in place, they will really need to get people in the shop.
“What they really want is to sell a hamburger for $10.50, because the mark up on the fuel won’t give them a lot.”
Mr Cook said the longer term trends revealed good and bad news for local buyers.
“Around the middle of last year the average price around here was about $1.50 a litre,” he said.
“At around $1.20 now, that's a drop of 30 cents a litre, which is pretty good.
“The oil prices are low and eventually that’s got to be passed on to the customers.
“The petrol companies always have a lag when passing on price drops.”
He said the bad news for drivers was even if petrol was free government charges like fuel excises, taxes and royalties would cause it to sell for around 60 per cent of the current price.
Other petrol outlets referred The Daily Examiner’s questions to company media offices. Their responses will published as they come to hand.