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Fuel costs hight but right price

Coffs Harbour?s petrol prices are causing complaints that the city is one of a number of pockets of high prices.
Coffs Harbour?s petrol prices are causing complaints that the city is one of a number of pockets of high prices.

By BELINDA SCOTT

WHY are Coffs Coast drivers paying higher petrol prices than other North Coast towns?

John Keelan, one of the owners of the Park Beach Mini Mart and BP service station in Ocean Parade, thinks local costs are high and the Federal Government should cap petrol excise to keep a lid on prices.

He said Coffs Harbour prices were much on a par with other areas and he paid more for petrol in Kempsey than he would have in Coffs Harbour on his last trip to Sydney.

Mr Keelan said costs in Coffs Harbour were high and local service stations had lost money on petrol when oil prices soared last year. He said local outlets had not been prepared to charge more than 110c a litre for ULP, while

Sydney service stations were charging 113c a litre.

"People read the Sunday papers which quote the price of oil and say it's down, and they come in and rip our heads off, but in fact it's up (by the time the newspaper appears)," he said.

"For example the price of oil is up again today."

The manager of the Bailey Centre, Paul Amos, said Coles and Woolworths, as the biggest retailers, set the market for petrol.

But Mr Amos said because of the State tax differential, Grafton bought fuel cheaper than Coffs Harbour.

Mr Keelan said the price for freighting fuel to Coffs Harbour service stations virtually cancelled out the subsidy given by the State Government to North Coast petrol sellers so they could compete with Queensland petrol retailers.

The Queensland Government subsidises the cost of on-road fuel.

Coffs Harbour is in Zone 4 for the Northern NSW Petroleum Products Subsidy Scheme, which compensates service station operators for the disadvantage suffered by being close to Queensland.

This means that fuel is subsidised 8.35c in Mungindi (Zone 1); 6.68 in Lismore (Zone 2); 5.01c a litre in Grafton (Zone 3); 3.34c in Coffs Harbour (Zone 4) and just 1.67c in the Nambucca Valley (Zone 5).

But the president of the Service Stations Association, Ron Bowden, said the association had noticed an increasing trend towards pockets of high pricing in various cities and towns in regional NSW, including Coffs Harbour.

Mr Bowden said the price differences could not be explained by the cost of freight.

He quoted pump prices for ULP of 108c-109c a litre in Wagga Wagga and 88c-89c a litre in Bathurst and 99.9c in Ballina versus 91.9c in Lismore as some of the dramatic differences to be found in regional NSW, variations he said were not reflected in Sydney, where prices had remained relatively close.

Mr Bowden said the pockets of high prices were one of the problems caused by the concentration of market power in the hands of supermarkets in partnership with oil companies.

He said the success of the grocery discount vouchers meant that Coles Express (formerly Shell) and Woolworths-Caltex now sold about 50 per cent of the volume of petrol in Australia, dominating the market.

He said without sales volume, other operators could not afford to discount and so could not compete on price; a problem which the ACCC Australian Competition and Consumer Commission had been warned about, but did not seem to be interested in.



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