This is the executive summary of the Victorian Parliamentary Internship Program Report by Hilary MacRae, commissioned by Steve McGhie MP, Member for Melton. It was published in October 2024 and published on the Victorian Parliament Library website here: https://library.parliament.vic.gov.au/serial/IR2024No37.pdf
In the year to 18 September 2024, Melton had an average unleaded petrol price of 208.2c per
litre. This was the highest average petrol price in any area within the western suburbs, other
than the petrol stations at Melbourne Airport.
Melton’s neighbouring suburbs - Bacchus Marsh and Caroline Springs - had significantly lower prices – an average of 187.7c and 192.6c per litre respectively. Further, although there are 12 petrol stations in Melton, they often have identical prices and rarely have significant price differences.
This is not consistent with the pricing behaviour exhibited in other western suburbs. This provides prima facie evidence of petrol prices in Melton not conforming to what would be expected in an open competitive market.
However, high petrol prices alone are not illegal. The ACCC can only take legal action under the
cartel conduct provisions of the Competition and Consumer Act, “if a corporation makes a
contract, arrangement, or arrives at an understanding, which contains a cartel provision” or if a
corporation engages in a ‘concerted practice’.
This study aims to provide a statistical analysis of petrol prices in Melton; identify the legal
principles relating to competition; identify the factors that can influence petrol prices; and
analyse the effects of those prices.
There appears to be no immediate explanation for the higher petrol prices in Melton, other than
higher margins due to less vigorous competition between retailers. This is because other key
factors which often explain higher prices are largely consistent across areas comparable to
Melton.
It is probable that the higher petrol prices in Melton are negatively effecting residents. Generally,
people with incomes below the median, and those that have a higher dependency on cars,
experience greater declines in their subjective wellbeing in response to rising petrol prices.7
Both these factors apply to the Melton population.
Recommendations
Recommendation 1: The Victorian Parliament should legislate the implementation of a staterun
petrol price tracking application similar to FuelCheck in NSW. This could be administered by
Consumer Affairs Victoria in the way NSW Fair Trading administers FuelCheck.
Recommendation 2: The ACCC should include Melton in the published petrol price data they
currently collect. If anomalies or anti-competitive conduct is found, then follow up action
should be undertaken. If Melton is not included, the Minister for Consumer Aairs, with
Consumer Affairs Victoria, should be part of a delegation to the ACCC advocating for Melton’s inclusion. Further, if a state-run petrol price tracking application is created, it should join the
ACCC’s Fuel Consultative Committee like WA FuelWatch.
Recommendation 3: The City of Melton Local Council and the Victorian Department of
Transport and Planning, in consultation with the Victorian Planning Authority, should review land
use and planning restrictions in Melton to ensure there are no impediments to entry to the
market by an independent petrol retailer.
Recommendation 4: In collaboration with the Department of Transport and Planning and
VicRoads, Public Transport Victoria should review the public transportation in Melton to
determine how best to increase public transportation options to decrease the reliance on cars
in Melton.
You can read the rest of Hilary's report here: Petrol Prices The Disadvantage To Melton Internship Report Hilary Macrae
