Daily Telegraph (Australia): The Great Petrol Rip Off

Thursday, January 18, 2007

MOTORISTS have been fleeced of more than $150 million since Christmas by pumped-up fuel prices – but don’t expect petrol company bosses to explain the rip-off.

With another interest rate rise looming due to high petrol prices, The Daily Telegraph can reveal cash-strapped consumers have lined the pockets of the petrol companies with $172 million in extra revenue.

A 10c gap between local and international petrol prices emerged in the last week of December, resulting in a $50 million-a-week cash bonanza.

The scandalous cash grab emerged amid continued calls by motorists, the NRMA and the ACCC for petrol sellers to drop their prices immediately.

As they held firm above $1.10 a litre across Sydney yesterday, bosses at Caltex, Shell, BP and Mobil ducked for cover.

The fatcat four – Des King of Caltex, Russell Caplan of Shell, Mark Nolan of Mobil and Gerry Hueston of BP – all declined to speak to The Daily Telegraph.

Sitting atop an industry that generates about $4 billion in annual profits, the petrol executives were too busy to explain why motorists are being ripped off.

A Mobil spokesman said chairman Mark Nolan did not feel he owed motorists an explanation.

“This issue is not something we feel senior management needs to get involved in. Mobil and Exxon Mobil don’t think what’s going on currently requires comment,” spokesman Alan Bailey said.

Caltex’s Jenny Palmer said: “As you will appreciate the CEO (Mr King) cannot be available at all times to speak to the media.”

Shell and BP also declined to expose their top brass to scrutiny.

NRMA president Alan Evans last night said: “Motorists deserve a thorough answer.

“They are not talking because the truth is they do not have an answer to explain why motorists are not being taken for a ride on prices.”

The NRMA has warned bloated petrol prices threaten to stoke inflation and result in a rise in mortgage rates.

Economists agree that high fuel prices, as well as other consumer goods, could force to the Reserve Bank to raise rates in the first week of February.

Having taken the unusual step of threatening to name and shame petrol sellers who have not dropped prices within the week, the Australian Competition and Consumer Commission is monitoring price data from 4000 service stations across Australia.

“We’re watching closely to see what happens,” ACCC chairman Graeme Samuel said.

The ACCC identified a 10c-a-litre disparity between local and Singapore benchmark prices, allowing for the usual lag.

Industry monitors FuelTrac said prices have been unfairly inflated since December 24.

With Australian motorists consuming 720 million litres of fuel a day, the difference has cost $172 million nationally.

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