Neil usually fills up in his home town of Glen Innes, where he ‘takes advantage’ of the shopper docket.
Neil usually fills up in his home town of Glen Innes, where he ‘takes advantage’ of the shopper docket.

Yamba petrol costs under scrutiny

A PETROL price expert has shed some light on why Yamba motorists are paying between five and 10 cents more for their petrol than other Lower Clarence or Grafton customers.

Associate Professor of Competition and Consumer Law at University NSW, Frank Zumbo, has been keeping a close eye on petrol prices for 20 years and said he ‘knows the games oil companies play’.

And while not all Yamba petrol stations were willing to divulge their profit margins, at least one retailer showed evidence to suggest that their small profits could mean that a lack of transparency of wholesale pricing arrangements are keeping prices in Yamba higher than surrounding towns.

Mr Zumbo said other factors that keep prices higher in some towns were a lack of competition; a lack of a strong independent with bargaining power; and parallel pricing, whereby each retailer shadows the other although any conversation regarding pricing was regarded as collusion and illegal.

“A profit margin of 3c per litre suggests an inflated wholesale price,” Mr Zumbo said.

All five of Yamba’s petrol stations are independent or franchisees, buying their fuel from one of the four major oil companies, Shell, Mobil, Caltex and BP, which will charge what the market can bear, or from independent wholesalers who often buy from the majors.

“There is no basis for understanding how the wholesale price is worked out and why there are discrepancies in areas where volumes are comparable,” Mr Zumbo said.

“And as a result, motorists are paying more than they should,” he said.

He said low petrol prices in an area usually meant the presence of a strong independent that takes a chance on low petrol profits over potential profits in their convenience store or high-volume sales, or were able to negotiate a good wholesale price.

Unlike major centres, which fluctuate their prices daily, Yamba petrol retailers generally fix their price once a week after delivery.

“There’s no place for price wars in a small town like Yamba, it only creates animosity,” one retailer said.

For Neil, the produce wholesaler from Glen Innes who thinks he’s getting a bargain with his shopper dockets that give him four cents off every litre of petrol, Mr Zumbo said there was ‘no such thing as a free lunch’ and shoppers were either paying for inflated petrol or inflated groceries.



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