Petrol Prices Dropping, But Where And How Will You Know?

Driving both up and down the NSW coast these holidays, the news reports on how world oil prices were plummeting were somewhat contradicted by the petrol prices on offer.

The Saudis are flooding the market with cheap oil said the media but precious little of it seemed to be flowing to the Pacific Highway where many prices persisted around $1.29.

Interestingly the best buys I found both north and south of Sydney were at independents either with a bowser, by a fruit shop or a non-supermarket aligned servo.

Also there was new research suggesting oil companies were cunningly exploiting the market, especially in Sydney, to not pass on anything like the decline in oil prices to retail petrol customers.

But as with so much in life what counts is less what you may be powerless to change, at least in the short-term, and instead what strategies there are to get more even.

The oil barons can always change their minds and pigs could fly before the ACCC, the consumer and competition commission, find ways to make the petrol prices ‘fairer’.

 But as a motorist can partially beat the system and get a better price for petrol and there’s new hope thanks to the ACCC settling a court action with the retailers.

The consumer revolution courtesy of mobiles and the ‘net has helped unpick the driver’s dilemma, of where and when to fill up by correcting what’s called an ‘information asymmetry’ or imbalance.

Simply put the retailers, as the full time professional sellers, know all of the prices all of the time. Yet motorists , as part time amateur buyers,  are only aware of posted prices they see.

And timing is critical. In the cities, at least, the cost of a litre of unleaded can unpredictably shoot up in price by 20% in minutes and then slowly slide to the bottom of the price cycle by a cent or two a day.

There have been various online and mobile platforms to help the driver with more price information but it hasn’t always been timely enough.

The ACCC offers an analysis of the price cycle in the big cities and advises to delay buying if posted prices are falling or to buy now if there’s an imminent rise predicted. However it’s only updated every couple of days.

Motoring organisations, such as the NRMA in NSW, also offer details of the cheapest petrol in your suburb and there are private operators such as MotorMouth which share more details nationwide.

It all helps of course. The NRMA identified a 32 cent difference in price between a BP garage a neighbouring independent in Milperra but in reality you need to know what’s happening in your patch and when.

Last year the ACCC took the petrol retailers and a company called Informed Sources to court for exchanging price information every 15 minutes in ways which could dampen competition.

The agreement they hammered out means ordinary consumers can, from mid-2016, access the same price information as the industry.

The freed-up data will be given to third parties, such as motoring organisations and app developers, to find innovative and useful ways to deliver it to the public.

In a separate move, which only affects NSW, petrol stations will be forced to display their prices in real time on the Fair Trading website which will track all changes.

It’s part of the Baird government’s push to encourage greater use of ethanol in petrol and while that remains highly contentious, the information, if it’s easy enough to access, should be welcomed by drivers.

As with all technologies and government initiatives much depends on how the consumer is prepared to engage with these initiatives.

But from my experience of driving up the highway and filling up more than 100 litres at $1.24 and then finding it ten cents cheaper just down the road I’d appreciate all the help I can get.