Low fuel prices a win for town

Seymour Telegraph - - NEWS - By Char­mayne Al­li­son

Local mo­torists are speed­ing to ser­vice sta­tions across town as Sey­mour con­tin­ues to en­joy plum­met­ing fuel prices.

The town is among sev­eral re­gional hubs ben­e­fit­ing from the hol­i­day sea­son’s petrol price plunge which saw Mel­bourne record its low­est fuel costs for 2018.

How­ever, not all re­gional towns have been as for­tu­nate, with Echuca and Co­bram among those still be­ing bled dry at the bowser.

At the time of writ­ing, mo­tor­mouth.com.au had the av­er­age price of petrol in Sey­mour at 113.9 cents per litre (CPL).

Shep­par­ton and Bendigo en­joyed sim­i­lar low costs at 120.1 and 118.1 re­spec­tively.

While the av­er­age in metropoli­tan ar­eas was 115.3 CPL, with sev­eral sta­tions on the out­skirts of Mel­bourne hov­er­ing around the 110 CPL mark.

But this marks a stark con­trast to av­er­age prices in Echuca (143.9), Kyabram (141.5) and Co­bram (137.8).

This dis­par­ity has left res­i­dents in these em­bat­tled neigh­bour­ing towns ou­traged.

RACV said the dis­crep­ancy be­tween re­gional and metropoli­tan prices was due to the con­trast be­tween the fuel price cy­cle in the city and ‘‘sticky pric­ing’’ in re­gional towns.

While com­pet­ing fuel sta­tions’ at­tempts to un­der­cut each other can see Mel­bourne prices plunge, RACV said this fluc­tu­a­tion tended not to af­fect re­gional ar­eas.

But this did lit­tle to ex­plain re­cent in­equal­ity be­tween prices in re­gional towns such as Sey­mour and Echuca.

‘‘The price cy­cle is ... driven by com­pet­ing fuel sta­tions at­tempt­ing to un­der­cut each other in or­der to sell more petrol,’’ RACV ve­hi­cle en­gi­neer­ing man­ager Michael Case said.

‘‘When this dis­count­ing reaches an un­sus­tain­able level where profit mar­gins are very low or even run­ning at a loss, the fuel price gets driven back up again by some of the re­tail­ers.

‘‘Whole­sale pric­ing has lit­tle ef­fect on the short term of the petrol price cy­cle, pri­mar­ily af­fect­ing the peaks and troughs which can be seen when analysing the long-term trends.

‘‘(In most re­gional towns across Vic­to­ria) prices remain con­sis­tent for ex­tended pe­ri­ods re­gard­less of Mel­bourne fuel price cy­cle trends or whole­sale prices.

‘‘Over­all, re­gional towns tend to re­spond slower to changes in whole­sale prices.

‘‘Re­duced com­pe­ti­tion and lower sales vol­umes com­pared to metropoli­tan Mel­bourne may con­trib­ute to the slower price move­ments and ab­sence of cyclic be­hav­iour in re­gional ar­eas.’’

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