Select to expand quote

bazz61 said..
In Darwin the Gov had to step in and force prices down ..they were highest price yet closer to Singapore refineries .. it worked ..the Airlines are just as bad gouging families at XMas & school holidays ....

This is exactly the point. There's a difference between healthy competition and downright price gouging.

^^ What are you proposing should be done about it? In WA the state government introduced something called fuel watch to encourage consumers to shop around and educate themselves. www.fuelwatch.wa.gov.au/fuelwatch/pages/home.jspx

Got a better idea?

All fuelwatch does is tell you that its happening today. after 2pm you get tomorrow prices as well.

Every single servo cant possibly be acting independently of each other and still follow the weekly curve the same as every other servo.

I mustn't be very good at explaining this. I'll try again.

Collusion is only possible between a small number of suppliers. There are too many fuel stations to collude when all it would take is one to break ranks if this were to give a commercial advantage. Collusion is not necessary for the observed outcome.

The bottom of the cycle is highly competitive and is set to attract savvy buyers who shop around not just between suppliers, but between days of the week. They take note of how much they paid last time and they will not pay significantly more than this next time - they know how much they can buy fuel for if they are patient.

Many other buyers either don't know how cheap fuel can get, or don't care; their priority is convenience. By raising prices most of the time these buyers (and no doubt the proportion of buyers in this category varies geographically) usually pay well above the lowest price, and if they do pay the lowest price it is purely by chance. If they are motivated by convenience it is likely that the busy-ness of their local station at the low point of the cycle will put them off buying at that time.

So in essence, the variability of pricing is driven not by lack of competition, but the fact that suppliers maximise profits (as they should) taking advantage of the fact that many buyers do not even look at the price before they buy. Fuelwatch is a taxpayer-funded attempt by government to educate the public and reduce the profits of fuel retailers. There is nothing inherently uncompetitive about it.

Select to expand quote

AUS1111 said..
I mustn't be very good at explaining this. I'll try again.

Collusion is only possible between a small number of suppliers. There are too many fuel stations to collude when all it would take is one to break ranks if this were to give a commercial advantage. Collusion is not necessary for the observed outcome.

The bottom of the cycle is highly competitive and is set to attract savvy buyers who shop around not just between suppliers, but between days of the week. They take note of how much they paid last time and they will not pay significantly more than this next time - they know how much they can buy fuel for if they are patient.

Many other buyers either don't know how cheap fuel can get, or don't care; their priority is convenience. By raising prices most of the time these buyers (and no doubt the proportion of buyers in this category varies geographically) usually pay well above the lowest price, and if they do pay the lowest price it is purely by chance. If they are motivated by convenience it is likely that the busy-ness of their local station at the low point of the cycle will put them off buying at that time.

So in essence, the variability of pricing is driven not by lack of competition, but the fact that suppliers maximise profits (as they should) taking advantage of the fact that many buyers do not even look at the price before they buy. Fuelwatch is a taxpayer-funded attempt by government to educate the public and reduce the profits of fuel retailers. There is nothing inherently uncompetitive about it.

No... its not "collusion" per se... but my thesaurus is struggling with an appropriate synonym for "the bastards are up to something that is dodgy but we cant quite prove it yet"


Australians are the only country in the world that is smart enough to figure this out?
Either we are the smartest or dumbest, 'cause this happens no where else.

"It's not collusion" is economist speak for "look the other way dumbarse".

www.abc.net.au/news/2017-10-09/brisbane-petrol-prices-high-motorists-dont-shp-around/9031186

Select to expand quote

AUS1111 said..
I mustn't be very good at explaining this. I'll try again.

Collusion is only possible between a small number of suppliers. There are too many fuel stations to collude when all it would take is one to break ranks if this were to give a commercial advantage. Collusion is not necessary for the observed outcome.

The bottom of the cycle is highly competitive and is set to attract savvy buyers who shop around not just between suppliers, but between days of the week. They take note of how much they paid last time and they will not pay significantly more than this next time - they know how much they can buy fuel for if they are patient.

Many other buyers either don't know how cheap fuel can get, or don't care; their priority is convenience. By raising prices most of the time these buyers (and no doubt the proportion of buyers in this category varies geographically) usually pay well above the lowest price, and if they do pay the lowest price it is purely by chance. If they are motivated by convenience it is likely that the busy-ness of their local station at the low point of the cycle will put them off buying at that time.

So in essence, the variability of pricing is driven not by lack of competition, but the fact that suppliers maximise profits (as they should) taking advantage of the fact that many buyers do not even look at the price before they buy. Fuelwatch is a taxpayer-funded attempt by government to educate the public and reduce the profits of fuel retailers. There is nothing inherently uncompetitive about it.

Fuelwatch very handy in WA, as there are huge fluctuations by day and by supplier, as Aus1111 stated

Today's cheapest ULP, north of the river, $110.5, most expensive $1.32
Tomorrow $1.11 to $1.43

Don't know who is colluding who, but easy to get the better deal.
If I need fuel, do a quick check, take note of the cheapest stations out of the dozen I either drive past, or involve a minor detour.
Not massive savings overall but $250 to $500 per year?
Actually best not to go to the absolute cheapest as there is often a large queue.

Sadly in QLD we don't have that kind of competition. Everyone is priced within 5c of each other, and seem to go up and down in lockstep, from 1.10 to 1.40+. Would be great if you could stockpile fuel at home, and fill up only on the cheap days, but really if you need to fill up you can't really save much by shopping around, you are just at the whim of the retail fuel cycle. And when the price cycle is around a month long, sometimes no amount of shopping around will save you a penny.

Select to expand quote

AUS1111 said..
www.abc.net.au/news/2017-10-09/brisbane-petrol-prices-high-motorists-dont-shp-around/9031186

Its all in the heading isn't it, "motorists don't shop around" - Independent Fuel Retailer. Can't believe that old mate would have any bias lol, I guess we are all really gullible. But "concedes" that its due to lack of competition, i.e. what the ACCC said in their report.

Its an interesting case as there aren't many other products with such an obvious and unique pricing strategy, actually I can't think of a single one. Yet consumers seem to tolerate it...?

Unfortunately there is very little incentive for the retailers to compete considering the cost of entry into the market is reasonably high, and the market is very opaque. Lets not kid ourselves in pretending the that profit margin that many of the large companies report in Australia is anything but a number to attempt to appease the ATO.

Select to expand quote

sls said..

AUS1111 said..
I mustn't be very good at explaining this. I'll try again.

Collusion is only possible between a small number of suppliers. There are too many fuel stations to collude when all it would take is one to break ranks if this were to give a commercial advantage. Collusion is not necessary for the observed outcome.

The bottom of the cycle is highly competitive and is set to attract savvy buyers who shop around not just between suppliers, but between days of the week. They take note of how much they paid last time and they will not pay significantly more than this next time - they know how much they can buy fuel for if they are patient.

Many other buyers either don't know how cheap fuel can get, or don't care; their priority is convenience. By raising prices most of the time these buyers (and no doubt the proportion of buyers in this category varies geographically) usually pay well above the lowest price, and if they do pay the lowest price it is purely by chance. If they are motivated by convenience it is likely that the busy-ness of their local station at the low point of the cycle will put them off buying at that time.

So in essence, the variability of pricing is driven not by lack of competition, but the fact that suppliers maximise profits (as they should) taking advantage of the fact that many buyers do not even look at the price before they buy. Fuelwatch is a taxpayer-funded attempt by government to educate the public and reduce the profits of fuel retailers. There is nothing inherently uncompetitive about it.

Fuelwatch very handy in WA, as there are huge fluctuations by day and by supplier, as Aus1111 stated

Today's cheapest ULP, north of the river, $110.5, most expensive $1.32
Tomorrow $1.11 to $1.43

Don't know who is colluding who, but easy to get the better deal.
If I need fuel, do a quick check, take note of the cheapest stations out of the dozen I either drive past, or involve a minor detour.
Not massive savings overall but $250 to $500 per year?
Actually best not to go to the absolute cheapest as there is often a large queue.

This is so true. Tonight I drove past a Caltex with 1.42 ULP
the better choice 5km away on wanneroo rd has it for 1.15 with your 4c off coupon. Still 23c per litre saved even without a coupon.i get diesel, and that was still more than 10c per L cheaper... and if I get 50L once or twice a week all year, then your maths is spot on...

cant believe people still go to the big 4 or so brands