Weekly Petrol Prices Report - Australia
2
THE AUSTRALIAN FUEL MARKET - AN OVERALL SNAPSHOT
Understanding Movements in Key Petrol Price Indicators
The Chart below provides an overall ‘snapshot’ of movements in key market indicators
relevant to the price of petrol at the pump in Australia.
The Australian refining sector is a price taker. Domestic prices are closely linked to relevant
international prices. The Singapore benc hmark price of petrol (MOPS95 Petrol) is the key price
benchmark for petrol in Australia. As the chart below shows, MOPS95 Petrol plus shipping
costs and Australian taxes represents almost the entire wholesale price of petrol (around 95%).
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27‐Oct 2 4‐Nov 22‐Dec 19‐Ja n 16‐Feb 16‐Mar 13‐Apr 1 1‐May 8‐Jun 6‐Jul 3‐Au g 31‐Aug 2 8‐Sep 26‐Oct
centsperlitre($A)
MOPS95 PETROL
Australian wholesale petrol prices are closely linked to the Singapore benchmark price of petrol (MOPS95
Petrol). This link is through the wholesale pricing methodology called import parity pricing or IPP (similar to that
used by the ACCC when wholesale prices were government regulated). Singapore is the regional
refining/distribution centre and Australia imports around a quarter of its f uel (mainly from Singapore).
( 52 weeks t o 26 Oct ober 2014)
Singaporefuel pri cesare Co pyright©2014theMcGr aw‐Hillcompanies allright sreserved
`
Da ily Pr ic e s for Unle a de d P etr ol - Aus tr a lian Na tiona l Aver a ge
The orange shaded area is simply the diff erence between two key
market indicators – the national av erage Terminal Gate Price (TGP)
and MOPS95 Petrol plus shipping and taxes. It does not represent
prof its accruing to oil companies at the wholesale lev el. A range of
costs (including ‘landed costs’ and ‘wholesaling costs’) would need to
be deducted to determine actual profits at the wholesale level.
These ‘landed costs’ include the costs of :
the quality premium (market cost) for Australian fuel standards
insurance and loss
local wharf age costs
The standard ‘wholesaling costs’ include:
terminal operating costs
administration and wholesale marketing costs
corporate taxes and gov ernment charges on wholesaling activ ities
PROFITS OF OIL COMPANIES
Once all wholesaling and retailing costs are considered, together with competitive market pressures, the total profit made across
wholesale and retail activities is a v ery small proportion of the f inal pump price. Av erage Oil Company prof it ov er the last 10 y ears
has been 1.8 cents per litre of f uel sold.
The grey shaded area is simply the diff erence between two key
market prices relev ant to the retail market. That is, the diff erence
between the national av erage pump price and av erage TGP. It does
not represent prof its accruing to retailers or oil companies. A range
of standard retailing costs would need to be deducted to determine
actual profits at the retail lev el.
These ‘retailing costs’ include:
land transport costs (of getting f uel f rom the terminal gate to the
petrol bowser)
administration and retail marketing costs
the costs of running serv ice stations like wages, rent and utilities
corporate taxes and other government charges on retailing
activities
AUSTRALIAN TAXES
Including Excise of 38 cents per litre
and GST (10%)
SHIPPING
RetailPrice
Whol e sal ePrice(TGP)
NOTES
(1) MOPS95 Petro l : the international petrol price s are provided by Platts (Copyright © 2014 The McGraw-Hill Companies, all rights reserved), and represent the end
of day assessment for the mean of Singapore prices for 95 Octane Petrol (MOPS95 Petrol). No portion of the publication may be photocopied, reproduced,
retransmitted, put into a computer system or otherwise redistributed, without prior written Authorisation from Platts. Platts is a trademark of the McGraw-Hill Inc.
Information has been obtained from sources believed reliable. However, because of the possibility of human or mechanical errors by sources, McGraw-Hill or others,
McGraw-Hill does not guarantee the accuracy, adequacy or completeness of any such information and is not responsible for any errors or omissions or for results
obtained from use of such information.
(2) SHIPPING: is the weighted average of daily market shipping rates (Australian cents per litre) for journeys from Singapore to major Australian ports (weighted by
the volume of fuel sales in the relevant State). Source data include Platts, Worldscale, Australian Petroleum Statistics and the Reserve Bank of Australia.
(3) TAXES: is excise and GST less any relevant state rebates weighted by the volume of petrol consumed in each State.
(4) NATIONAL AVERAGE WHOLESALE PRICES: are derived from capital city prices weighted by fuel volume consumed in each State.
(5) NATIONAL AVERAGE RET AIL PRICES: are calculated as the weighted average of each State/Territory's metropolitan and non metropolitan retail petrol prices,
with the weights based on the number of registered petrol vehicles in each of these regions.
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