On Friday, the price of a barrel of oil dropped US$1.00, from a slight rally, to finish at US$67 a barrel, more than 50% down on recent highs. The price of a gallon of 'gasoline' in The States is down to around US$2.45, whereas only a few months ago, our American friends were paying in excess of US$4.00 a gallon.
As world economies slip into recession on the back of the Global Credit Crisis, demand for fuel is unlikely to rise, and given the basic principles of 'supply and demand', the price of oil is unlikely to recover to the high prices seen earlier this year. At least not in the foreseeable future (although OPEC has announced it is to begin cutting production in an attempt to hold prices higher).
You'd assume that this would translate into a 'win' for the struggling Aussie motorist, who has been watching an ever increasing chunk of the pay packet disappear into the family hack's fuel tank... but you'd be wrong. In Melbourne at least, we have seen very little change to the price of fuel, which still hovers around $1.50 for standard Unleaded.
Sure, the oil companies will tell you that this is because the Aussie dollar has dropped, and the fuel excise structure in Australia means that any benefit will take a while to filter through to the pump. The same people will also tell you, that rising oil prices take just as long to filter through to the pump. C'mon!
So, what is the ACCC doing about this 'in-ya-face' blatant rip-off of the motoring public? Well, true to form, not a hell of a lot.
The recently announced Petrol Commissioner, Mr Joe Dimasi, has confirmed that he has written to all the major oil companies asking them to explain themselves over the high petrol prices at the pump. No doubt the oil bosses will be using those letters to light their Montecristo's at Friday night drinks. It's even more of a kick in the guts for the average Aussie when you realise that we are the fools paying to run a 'paper tiger' ACCC.
Mr Dimasi has also said the ACCC is working hard to break down the barriers that prevent greater competition at the wholesale level in the petrol market.
Thankfully, some, like VACC (Victorian Automobile Chamber of Commerce), are not greatly impressed with the lack of action by the ACCC in retail and wholesale petrol markets. It would seem that they can see through Mr Dimasi's posturing on this particular issue.
?Mr Dimasi does not need to write to the oil companies. He should already have all the evidence he needs at his finger-tips from previous investigations. What he really needs to be doing right now is taking the oil companies to task,? VACC Executive Director, David Purchase said.
?Through the ACCC?s 2007 Petrol Price Inquiry and the efforts of the previous Petrol Commissioner, Mr Pat Walker, there has been enough letter-writing to date. Now is the time to stop the correspondence and to start the action."
The VACC has requested that Mr Dimasi immediately look at the operation of the wholesale petrol market and the issue of Terminal Gate Prices. Independent service station owners are being denied a fair price there, which puts independents at an immediate pricing disadvantage and does not allow for a competitive market at the retail level.
?For too long the oil majors have enjoyed top-to-bottom control of the petrol industry and the ACCC admitted as such, referring to the ?comfortable oligopoly? in the 2007 Inquiry."
?Until someone comes out swinging, then the oil majors will continue to rule the roost and give the Petrol Commissioner the run-around."
The VACC is also encouraging Mr Dimasi to abandon the flawed national Fuelwatch Scheme, which it describes as being "simply a circus", and focus instead on the limited competition and control of the market by the oil majors at the wholesale level.
So, Mr Dimasi, stop sending letters and start taking some action. The Australian motorist has been put through the ringer in the last year or so, and its time that blatant profiteering by oil companies in Australia was addressed.