DIESEL is being sold in regional South Australia at prices above what the RAA considers a fair profit margin.
Motorists should be paying about $1.45 a litre for the fuel rather than the $1.50/L and above they are currently being hit with. Diesel is selling for an average 5 cents to 6c/L higher than expected.
Regional petrol prices have only just started to fall but the savings should have been passed on to motorists weeks ago. Prices for petrol and diesel in Mount Gambier is of "particular concern" to the RAA.
Senior analyst Chris West said there was a 9c saving for petrol and diesel seven weeks ago and criticised the industry for not passing it on to regional motorists within a reasonable timeframe.
"We monitor 18 sites in regional SA and many are only just starting to see the savings for petrol while for diesel, many centres have not seen that full saving yet," he said.
"We've called on the industry to pass on savings as people in regional areas typically need their car more given that they travel further to access essential services."
Mr West pointed out that retailers were quick to pass on benchmark price increases to consumers within seven to 10 days, but six to seven weeks after a price decrease, bowsers had only minor savings while some had none at all.
"We've asked the industry how they justified it," he said.
As of Tuesday, the average price for diesel in Adelaide was 146.2c/L, with Blair Athol recording the cheapest at 139.2c/L. Unleaded cost an average 136c/L.
In Mt Gambier, however, diesel was being sold for an average 149.9c/L and petrol for 144.7c/L. Renmark was selling diesel for an average 151.2c/L and petrol for 137.6c/L while the numbers for Port Augusta were 147.1c/L and 138.9c/L respectively.
The cost of diesel in Ceduna averaged 149.9c/L and petrol was at 150.4c/L while Cooper Pedy had a weekly average diesel price of 166.9c/L and a unleaded average of 158.4c/L.
"We typically expect a 8-9c margin for major regional centres," Mr West said.
"This is a retail margin, including overheads, plus a profit. The profit should be about 2-3c for diesel and 1-2c for petrol."
Mr West said regional areas such as Mt Gambier and Ceduna had different margins as they bought and sold different volumes.
"And there will certainly be other centres with only one pump, and their prices will vary significantly," he said.
According to Caltex, fuel prices are more costly in country towns due to bigger freight and distribution costs, with station providers often having higher retail margins to ensure viability given lower petrol volumes and less non-fuel incomes.
A lack of competition also meant there were no discounting cycles, and because it took longer for fuel to turn over, the response time to decreasing wholesale prices could be longer.
*Full report in Stock Journal, June 23 issue, 2011.
