Consumers are encouraged to take advantage of this increased choice by shopping around to maximize the benefits of offerings like cheaper fuel, loyalty programs, convenience store items and even in-store cafes.
Australians have more choice than ever before when buying fuel. The ACCC’s second fuel industry report examines retail market shares in Australia and shows there is a greater diversity of retailers in the market compared with 15 years ago when it was dominated by big brands like BP and Caltex.
Refiner-wholesalers, brands such as BP and Caltex that refine and wholesale fuel as well as selling it at the retail level, accounted for an overwhelming 83 per cent of ACCC monitored retail fuel sales in 2002-03.
Since then, their share of ACCC monitored retail fuel sales has declined significantly to 38 per cent in 2016-17.
Conversely, large independent retail chains (7-Eleven, United, Puma Energy and On The Run) more than quadrupled their market share over that time, rising from 6 per cent of ACCC monitored retail fuel sales in 2002-03 to 25 per cent in 2016-17.
“The changing dynamic of Australia’s retail fuel market can be beneficial to consumers, as it gives them more choice about where they get their fuel,” ACCC Chair Rod Sims said.
“New retailers entering the market, for example, can have a positive impact on competition as businesses fight for market share. This can help bring down prices, as we have recently seen in the Cairns fuel market. Where there are a limited number of retailers in a market, prices can be higher due to a lack of price competition,” Mr Sims said.
The report also found that the market shares of the two supermarket chains (Coles Express and Woolworths) had diminished over the past four years. Their combined share of ACCC monitored fuel volume sold grew strongly between 2002-03 and 2012-13 to 51 per cent of ACCC monitored fuel sales, in part due to shopper docket discounts that at times reached as high as 45 cents per liter.
The ACCC undertook an investigation into these shopper dockets and in December 2013 accepted voluntary court-enforceable undertakings from Coles Express and Woolworths to limit these discounts due to concerns about their long-term anti-competitive effect.
These limits to shopper docket discounts, as well as changes to the supermarkets’ business arrangements, have contributed to their decline in market share since 2012-13.
“For many consumers, price is the most important factor when determining where to buy fuel. More players in the market means more options of where to buy fuel. This is important as we found prices vary considerably between retailers,” Mr Sims said.
“For example, in our first industry report we found that in Sydney the difference between the highest priced and lowest priced retailer was 9.5 cents per liter in 2017. Price-sensitive consumers can therefore make significant savings over time by choosing to buy petrol at lower priced retailers.”
There are a variety of fuel price websites and apps that provide information to drivers about petrol prices, including: the New South Wales FuelCheck website and app; the Northern Territory MyFuel NT website and app; the Western Australia FuelWatch website; the MotorMouth website and app; and apps operated by GasBuddy, the NRMA, 7-Eleven and Woolworths. There are differences in the quality and breadth of the price data available from these websites and apps, as well as the frequency with which prices are updated.
The Queensland Government is planning to commence a two-year trial in December that requires fuel retailers to collate and publish their latest prices online.
Some consumers may prefer to purchase fuel from retailers they consider to be in convenient locations, have superior convenience store offerings or offer loyalty schemes, such as frequent flyer points. These consumers can still benefit from having a wider range of retailing operations to choose from, as retailers are likely to try to compete on non-fuel offerings to attract these consumers.
While the national petrol retailing market has become more balanced over time, this is not necessarily true for all locations. Each location will have its own specific retailers, and their share of the retail market will often be different from the national market share.
For example, in 2015-16 there were no national large independent retail chains operating in Cairns, which was the location for the ACCC’s fourth regional market study. Since the market study was published in May 2017, the large independent retail chain United has entered the Cairns retail market and had a positive effect on competition and prices in the market.
Many small regional markets also often lack the choices found in larger markets.
The report also examined market shares at the wholesale sector of the fuel industry. Refiner-wholesalers account for the majority of wholesale fuel sales in Australia, although their share of sales has decreased marginally over time. Source: Mirage News PWKD25092018