Like most Gungahlin residents I have been confused and frustrated with the massive price difference of fuel between Gungahlin and other areas in Canberra. The recent social media campaign by A.C.T. Fuel Watch has highlighted the high price difference within Canberra and between Canberra and Sydney.
A Twitter exchange between a Gungahlin resident who goes by the Twitter handle ‘@bizzylizzycooks’, Coles Supermarkets and My Gungahlin in November 2014 shows the frustration and confusion.
As you can see from the screenshot Coles was questioned over the 10 cent per litre price difference between Curtin and Gungahlin. Coles response was to say it was out of their control but it was driven by competition and taxes. The taxes on these two stations that are 22 kilometers apart is exactly the same, such as the Federally charged fuel excise and the ACT Government taxes for business.
So we can easily rule out taxes as explaining the difference between any site located in the ACT. The next point Coles made was competition. Curtin Coles has a number of competitors nearby. Coles in Deakin (3.5km) and Woolworths Caltex in Hughes (2.2km).
We all know how far Coles Shell Gungahlin and Woolworths Caltex are. So we have a situation where there are 2 competitors within sight of each others price boards having a dearer price than a station that has it’s nearest competitor is in different suburbs. If competition was a driving force surely two major stations so close together would be the cheaper of this example. If this situation was reversed I would have understood the argument of competition but this doesn’t make sense in this case.
Thankfully the price of fuel has dropped considerably since that tweet. Let’s now examine today’s price using the Woolworths Caltex app as of 11:38am 17th January 2015. Caltex Woolworths Gungahlin is 126.9 for unleaded 91. The outlet on the Federal Highway is 2 cents cheaper. Their nearest competitor is the BP 1.7km up the highway. The second lowest price in Canberra from Caltex Woolworths is Hume at 122.7. There nearest competitors are in Chisolm and Jerrabomberra. The lowest price for a Caltex Woolworths is at 101.7 at Majura Park. This is in comparison to CostCo at 97.7 as reported by Petrol Spy at 11:48am 17th January 2015.
Why aren’t we seeing the petrol stations in Gungahlin compete like we are in Majura Park or even have a lower price point like other stations where they don’t have competitors so close? Is demand higher here in Gungahlin than elsewhere in Canberra? Is there a lower supply in Gungahlin? Typically in pricing models higher demand means higher price or lower supply means higher price. Or is it because they are waiting for the other to blink first rather than take the lead?
It was hoped that the introduction of 7 Eleven in Casey would cause some change however this doesn’t seemed to have a big impact.
The social media drive that A.C.T Fuel Watch is driving is fantastic in encouraging people to share petrol prices around Canberra to allow people to make informed decisions about where to buy their fuel. It is important that A.C.T. Fuel Watch continue to report on the average price in Canberra and it’s current downward trend. It is also important that the average price in Canberra is compared to that in Sydney. The end game should be pricing consistently in line with what is being seen in Sydney.
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