RACV calls for rethink on fuel cost

As revealed in The Age yesterday, petrol prices at the pump have fallen by 13.9 cents a litre since July, while the price of crude oil has halved in United States dollars and slid 35% in Australian dollars.

The 13.9-cent in the Australian price is also less than the fall in the price of refined unleaded petrol in Singapore, down by 16.6 cents from the peak in July.

Under Australia's import parity pricing policy, the Singapore price is used as a benchmark by companies to help set the wholesale price of petrol in Australia.

RACV fuel spokesman David Cumming said this meant Australian consumers paid a premium if demand in Asia was high, even though the vast majority of our oil came from local sources.

"I think we have to question why we are using the same import parity pricing formula that's been in place for more than 25 years," he said. "Let's review it and see what we can to do make it fairer for motorists."

Mr Cumming said the RACV had been "inundated" by complaints from members in recent weeks about the price of petrol. "They feel they are being ripped off."

A statement issued yesterday by CommSec said the "crumbling" Australian dollar was part of the reason the falling global oil price was not yet reflected at the bowser.

"Our analysis of petrol prices suggests that oil companies have been acting appropriately," it said. "All blame could be laid squarely at the feet of the falling Australian dollar."

But in promising news for motorists, CommSec equities economist Savanth Sebastian said if the Australian dollar and the Singapore unleaded price held steady in coming days, the national average petrol price could fall by up to 10 cents a litre to around $1.40 a litre in a fortnight.

The nation's incoming petrol commissioner, Joe Dimasi, says he will seek talks with the big four oil companies and Woolworths and Coles to obtain further details about the discrepancy between prices in Australia and Singapore.

Preliminary responses from the companies were received last week after Mr Dimasi wrote to them about the issue.

Processes were under way for a broader review of how Australian prices compared against international benchmarks, which would include an examination of the import parity policy, Mr Dimasi said.

A spokesman for BP Australia said the company had not changed the way it priced petrol over the period in question and was passing falls in the cost of product on to customers, while Caltex said Australian retail prices had moved consistently with international prices and the Australian dollar.

Woolworths, which trades as Safeway in Victoria, said it passed on all reductions in the price of oil received from its Australian supplier.

A spokeswoman for Coles Express said it had made no change to its pricing policy. "We work hard to ensure we are competitively priced in the market," the spokeswoman said.

KEY POINTS

RACV says national import parity cost formula outdated.

CommSec blames "crumbling" dollar for high prices.

Petrol commissioner will seek talks with oil companies.