News

Pain at bowsers

By Cobram Courier

District residents are still being bled dry at Cobram bowsers, despite fuel prices in Melbourne plummeting to record lows for 2018 during the festive season.

Surprisingly, it was a struggle not shared in many nearby regional hubs, with Shepparton, Bendigo and Seymour experiencing a welcome dive in prices.

At the time of writing, motormouth.com.au had the average price of petrol in Cobram at 137.9¢/litre.

In stark contrast, metropolitan stations averaged 115.3¢/litre, with several stations on the edges of Melbourne hovering around 110¢/litre.

In Shepparton, Bendigo and Seymour, average petrol prices were up to 24¢/litre lower than Cobram at 120.1¢/litre, 118.1¢/litre and 113.9¢/litre respectively.

An RACV spokesperson said the price differences between regional and metropolitan areas was due to the contrast between the fuel price cycle in the city and ‘‘sticky pricing’’ in regional towns.

While competing fuel stations attempting to undercut each other means Melbourne prices plunge, RACV said the fluctuation tended not to affect regional areas.

However, this does not explain the recent inequality between prices in regional towns.

‘‘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.’’