Retail fuel market study recommends changes to benefit competition and consumers

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vexxxboy

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#2368893 5-Dec-2019 16:41

can someone explain why prices will fall 18-32 cents a litre if retailers are forced to show price , i dont get it my local already shows all it's prices and has since it started and i havent seen one station that doesnt show prices, what am i missing.

Common sense is not as common as you think.

Scott3

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#2368897 5-Dec-2019 16:49

vexxxboy:

can someone explain why prices will fall 18-32 cents a litre if retailers are forced to show price , i dont get it my local already shows all it's prices and has since it started and i havent seen one station that doesnt show prices, what am i missing.

That comment was made in regards to premium grade fuel, where the price is rarely shown on the board. It is widely accepted that higher profit mangins are run on premium grade petrol - i.e. those users are being ripped off. And some of the basis for this is that the prices are not advertised on the sign. If you travel overseas, the price differential between grades is typically a lot smaller than in NZ.

[edit] - Ignore the above

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12291251

"Although the Government does not appear to have any concrete estimates, Faafoi estimates the drop could be within that 18c-32c a litre price range."

It seems this estimate is being made my Consumer Affairs Minister Kris Faafoi, without proper analytical backing. Notice the use of word "could", rather than "is expected to be"

sbiddle

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#2368898 5-Dec-2019 16:50

vexxxboy:

can someone explain why prices will fall 18-32 cents a litre if retailers are forced to show price , i dont get it my local already shows all it's prices and has since it started and i havent seen one station that doesnt show prices, what am i missing.

It petrol fell 32c from the "national" price it would be selling for below cost based on MBIE data.

DarthKermit

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#2369152 5-Dec-2019 20:57

I'm all for full disclosure of fuel prices. The fuel companies should also put up a display showing how much tax they collect per litre for the govt. Full disclosure and all that.

Scott3

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#2369215 5-Dec-2019 21:19

DarthKermit:

I'm all for full disclosure of fuel prices. The fuel companies should also put up a display showing how much tax they collect per litre for the govt. Full disclosure and all that.

Why?

The tax component of fuel already fully disclosed, anybody interested can find it with a quick google search:

https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-generation-and-markets/liquid-fuel-market/duties-taxes-and-direct-levies-on-motor-fuels-in-new-zealand/

The point of the additional signage for higher octane fuel is to increase competition, for these grades, as abnormal high profit margins are being charged on these grades compared to 91RON.

richms

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#2369217 5-Dec-2019 21:24

What about the fact that so few places sell 95 now, so those that do only bother being slightly below the 98 options at BP and mobil?

I hope that their ideas of fuel stickers so people know what to use doesnt amount to "it doesn't grenade the engine on 91, so thats the sticker we will use"

Richard rich.ms

chevrolux

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#2369220 5-Dec-2019 21:35

Tax on petrol is super irrelevant in this case. It's about how much profit the private companies are making. Removing the tax doesn't remove the profit margin.

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mattwnz

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#2369225 5-Dec-2019 21:46

I think part of the problem is that some people can get really good discounts for you have a card, or you buy through a super market etc. So not everyone is benefiting from that. Also how the pricing can vary so much depending on whether or not there are the more aggressive disruptive players operating in the market or not. I would like to see them do the same for building products as that is costing the country significantly with our very high build costs.

sbiddle

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#2369227 5-Dec-2019 21:57

Scott3:
The point of the additional signage for higher octane fuel is to increase competition, for these grades, as abnormal high profit margins are being charged on these grades compared to 91RON.

The profit margins on 95 are higher in many areas because 91 is bring sold at or below cost so domething needs to cross subsidise it.

People need to remember the Commerce Commission don't exist to deliver the best outcome for consumers. Their goal is to ensure markets operate "optimally". The two are not one and the same.

KiwiSurfer

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#2369927 7-Dec-2019 07:16

Senecio: I’m a proud supporter of Gull. They have two self serve stations near me that are usually between 8-12c cheaper than any of the majors in the area negating the need to stuff around with discounts or loyalty programs.

I pass a Gull every day. They seem to suffer from bipolar—sometimes they're cheaper than the BP/Caltex up the road but sometimes they're more expensive (up to 10c more). I found out recently from a friend that on Thursdays the pump price at that particular station is usully 6c cheaper than the price shown on the board—I have taken advantage of this twice. Very strange strategy which results in an empty Gull station most days while BP/Caltex has queues because most people can get BP/Caltex cheaper than Gull just by having the appropriate card.

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