A steep drop in petrol being sold in Canberra is spreading the fixed costs of running a service station across fewer and fewer litres a year, partly explaining the high prices the capital's motorists are paying at the bowser, the government has argued.
The ACT government on Wednesday backed a new inquiry into the ACT's petrol prices, which surged by more than 10 cents a litre, faster and higher than any other part of Australia, in the week to September 16.
Treasurer Chris Steel said prices were too high for Canberrans and the government was continuing to monitor fuel markets and act to prevent fuel retailers from price gouging motorists.
Mr Steel said there had been an 18.5 per cent drop in the amount of petrol sold for every Canberran between 2018-19 and 2023-24.
"The higher annual average petrol price in Canberra than in regional areas largely reflects a higher retail margin and to a lesser degree higher wholesale petrol costs, not the cost of doing business," he said.
"Canberra's higher average net retail margin likely reflects weaker competition in Canberra. This is due to Canberra having a more concentrated retail petrol market with a higher proportion of retailers with business models of offering a premium product and a lower number of independent retailers with a business strategy to aggressively discount."
Opposition Leader Mark Parton criticised what he said was Chief Minister Andrew Barr's inability to say in question time what the government had asked its economic regulator to do about fuel prices.
"Families are being slugged every time they fill up, and this chaotic ACT Labor government cannot even say what it has asked the ICRC [Independent Competition and Regulatory Commission] to do about it," Mr Parton said in a statement.
"In question time last week, the Chief Minister could not give a clear answer. That is not a plan. That is chaos."
Mr Barr had said prices had risen for reasons outside the ACT's control - principally conflict in the Middle East that was "not of our doing" - and he could not recall the exact dates the government had commissioned the ICRC to investigate the local fuel market.
The ICRC was in 2019 tasked with investigating ACT petrol prices, finding petrol retailers had limited control over retail fuel prices and petrol stations generally had higher retail margins in the territory.
"Canberra's higher average net retail margin likely reflects weaker competition in Canberra. This is due to Canberra having a more concentrated retail petrol market, with a higher proportion of retailers with business models of offering a premium product and a lower number of independent retailers with a business strategy to aggressively discount," the ICRC report said.
"It also likely reflects the relatively poor visibility of many petrol stations in Canberra, which makes it difficult for consumers to compare competing retailers' prices."
Mr Parton had led the charge to call for a new parliamentary inquiry into fuel prices, citing the petroleum retail industry's view that the high costs of petrol were a result of Canberra being an expensive place to do business.
"If that is the case, well the government should be owning that, they should be owning it and they should be indicating ways that they can address it," Mr Parton told the Assembly.
Mr Steel said previous inquiries had established the cost of doing business was not the primary driver of Canberra's fuel prices and the market was changing, with demand for fuel dropping.
"If Mr Parton thinks that the solution is to open up new petrol stations all over Canberra for a product that is less and less in demand, he is demonstrating the Liberals' economic fundamentals for all to see," he said.
The ACT Greens also supported the motion, meaning the parliamentary inquiry is likely to be established.
Greens leader Jo Clay said: "Businesses need to know that anyone who tries to make a quick buck out of the people, particularly against those who, for entirely legitimate reasons, are still using petrol and diesel vehicles, and for those who will use them for longer than others, such exploitation will not be tolerated."
Mr Parton sat on a select Assembly committee that investigated fuel prices in the ACT in 2019, which made five recommendations and noted annual average petrol prices in Canberra were higher than the five largest cities in the preceding three financial years.
"It is well established that when the price of crude oil increases, this is quickly reflected in the retail price; when the price of crude oil decreases, this is reflected much more slowly in the retail price. It takes even longer to be reflected in ACT retail prices than in other cities," the select committee's report said.
Since the inquiry, NSW's FuelCheck consumer price monitoring app has been introduced into the territory, prompting the Australian Competition and Consumer Commission to declare motorists could save $300 a year by using the app to shop around.
