Monthly Fuel Price Report January 2015 4 February 2015 The RACQ monthly fuel price report presents a summary of the fuel price trends in Queensland for January 2015. Key points Metropolitan petrol prices reached a six-year record low, while diesel retail margins reached an all-time record high. The indicative retail margins and total margins on Brisbane diesel in January, at 22.7cpl and 36.1cpl respectively, were the highest on record. The diesel price in Brisbane was 133.2cpl, 9.8cpl lower than December 2014. Brisbane diesel was more expensive than Adelaide by 7.5cpl, Sydney by 4.6cpl, Melbourne by 4.4cpl and Canberra by 3.7cpl. The average retail margin on ULP across regional centres was 22.9cpl, 0.3cpl lower than the record high of 23.2cpl observed in December 2014. Regional retail prices remain grossly inflated with retail margins at least 15cpl higher than RACQ considers to be fair. The record high margins were due to falls in the oil price not being passed on to consumers. The average price of ULP in Brisbane was 112.0cpl (16.6cpl lower than December). Brisbane was dearer than Adelaide by 6.3cpl, Sydney by 5.3cpl and Melbourne by 4.0cpl. Brisbane was the cheapest Queensland city to buy ULP in January. Ayr was cheapest for Diesel, with an average retail price of 123.1cpl, 10.1cpl cheaper than Brisbane. The average price of LPG in Brisbane in January was 72.7cpl. The price difference between retail LPG (in Brisbane) and the benchmark price increased to 26.5cpl. The fuel excise on petrol and diesel increased on 2 February to 38.9cpl (from 38.6cpl) and excise on LPG increased to 10.2cpl (from 10.1cpl) ULP prices and margins in Brisbane The average price of ULP in January 2015 fell by 16.6cpl to 112.0cpl and the Terminal Gate Price (TGP) fell by 13.2cpl. Indicative Brisbane retail margins for January 2015 were 3.4cpl lower than December, and total margins were 5.5cpl lower. The monthly average price of ULP in Brisbane was last this low in May 2009, when the monthly average price was 111.3cpl. The lowest monthly average seen in recent years was 98.6cpl, observed in December 2008. The Brent oil price also recorded a six-year record low at A$61.8 a barrel. Prices this low were last observed in December 2008. It should be noted that the cheaper period in 2008/09 was short-lived and in the second half of 2009 prices were trending upwards. Prior to 2009 the average monthly ULP price was last this low in August 2005. Prior to mid-2005 the ULP price was consistently lower than a dollar per litre. Date ULP Retail TGP Brent Crude Oil Singapore MOGAS Price Exchange Rate (A$/US$) Retail Total Jan 2015 112.0 104.0 61.8 70.5 0.8086 6.9 15.9 Dec 2014 128.6 117.2 77.9 86.5 0.8256 10.3 21.4 2014 Nov 2014 142.0 126.5 92.8 104.6 0.8650 14.4 24.6 2014 Q4 2014 140.6 126.7 91.0 102.2 0.8569 12.8 23.1 Jan 2014 158.4 145.8 121.2 133.0 0.8858 11.5 23.0 Jan 2013 141.7 133.5 107.0 116.1 1.0495 7.4 18.0 Jan 2012 144.4 134.4 107.3 118.3 1.0382 9.3 19.7 As the chart below shows, the majority of the cost of a litre of ULP is in the crude oil component, the fuel excise and GST. Page 1 of 5
120 100 80 60 40 20 0 Sat, 31 Jan Thu, 29 Jan Wed, 28 Jan Tue, 27 Jan Mon, 26 Jan Sun, 25 Jan Sat, 24 Jan Thu, 22 Jan Wed, 21 Jan Tue, 20 Jan Mon, 19 Jan Sun, 18 Jan Sat, 17 Jan Thu, 15 Jan Wed, 14 Jan Tue, 13 Jan Mon, 12 Jan Sun, 11 Jan Sat, 10 Jan Thu, 8 Jan Wed, 7 Jan Tue, 6 Jan Mon, 5 Jan Sun, 4 Jan Sat, 3 Jan Thu, 1 Jan Retail Wholesale Refiner Distribution Costs Excise and GST Brent Crude Price cycles There was no obvious price cycle in January 2015 (nor in the month prior). The last cycle started on 12 November 2014 and prices peaked on 20 November. The average retail price in Brisbane fell steadily after that. During December 2014 the TGP fell at a similar rate, resulting in relatively steady retail margins. The TGP stabilised in January 2015 and the retail price continued to fall, leading to reduced retail margins. On 31 January 2015, indicative retail margins had fallen to negative 1.4cpl. At the time of writing there were early indications that a price hike was imminent in the Brisbane ULP market. Diesel prices in Brisbane The average price of diesel fell by 9.8cpl to 133.2cpl in January 2015. However, the TGP fell by 12.3cpl, leading to an increase in margins. Indicative Brisbane retail margins for January were 2.6cpl greater than December and 11.4cpl higher than the January 2014 average. Date Diesel Retail TGP Price Total margins were 0.8cpl higher than December and 9.2cpl higher than January 2014. The indicative retail margins and total margins on Brisbane diesel in January, at 22.7cpl and 36.1cpl respectively, were the highest on record. Comparison to other capital cities Brent Crude Oil Singapore Gasoil Price Retail Total Jan 2015 133.2 109.4 61.8 78.4 22.7 36.1 Dec 2014 143.0 121.7 77.9 94.8 20.1 35.3 2014 Nov 2014 148.3 130.4 92.9 110.9 16.8 31.1 2014 Q4 2014 147.5 129.0 91.0 107.2 17.4 31.8 Jan 2014 161.7 149.3 121.2 138.8 11.3 26.9 Jan 2013 149.0 136.5 107.0 121.6 11.8 25.8 Jan 2012 149.7 138.6 107.3 125.5 10.4 25.4 In January 2015, ULP sold in Brisbane was more expensive compared to Adelaide, Sydney and Melbourne. Adelaide was 6.3cpl cheaper than Brisbane, Sydney was 5.3cpl cheaper, and Melbourne was 4.0cpl cheaper than Brisbane. The other capitals were more expensive. Perth was 2.8cpl dearer than Brisbane, Canberra was 10.6cpl dearer, Hobart was 16.5cpl dearer and Darwin was 23.4cpl dearer. The table below presents the average January 2015 prices and retail margins on ULP and diesel for Australia s capital cities, with the change compared to December 2014 in parentheses. Page 2 of 5
City ULP ULP Retail * Diesel Diesel Retail * Adelaide 105.7 (-15.4) 0.3 (-3.2) 125.7 (-10.5) 14.3 (1.0) Brisbane 112.0 (-16.6) 6.9 (-3.5) 133.2 (-9.8) 22.7 (2.6) Canberra 122.6 (-19.0) 16.6 (-6.8) 129.5 (-11.6) 17.9 (-0.1) Darwin 135.4 (-13.3) 26.5 (-0.9) 134.8 (-20.0) 20.2 (-8.3) Hobart 128.5 (-13.5) 18.0 (-1.5) 136.8 (-12.8) 20.6 (-1.3) Melbourne 108.0 (-13.1) 2.4 (-0.9) 128.8 (-9.1) 17.8 (3.0) Perth 114.8 (-11.7) 9.2 (0.5) 135.2 (-9.8) 24.1 (2.2) Sydney 106.7 (-16.0) 0.7 (-3.8) 128.6 (-10.7) 17.0 (0.8) * The retail margin is the average retail price minus the average local TGP and local freight costs (assumed to be the same as Brisbane: 1.12cpl). The TGP varies between cities. The price of diesel in Adelaide, Sydney, Melbourne and Canberra was cheaper than Brisbane; the other capitals were more expensive. Diesel sold in Adelaide was 7.5cpl cheaper than Brisbane, Sydney was 4.6cpl cheaper, Melbourne was 4.4cpl cheaper and Canberra was 3.7cpl cheaper than Brisbane. Darwin was 1.6cpl dearer than Brisbane, Perth 2.0cpl dearer and Hobart 3.6cpl dearer. Fuel prices across Queensland The table below presents the average January 2015 prices and retail margins on ULP and diesel for Queensland localities, with the change compared to December 2014 in parentheses. Locality ULP Indicative ULP Retail * Diesel Indicative Diesel Retail * Brisbane 112.0 (-16.6) 6.9 (-3.5) 133.2 (-9.8) 22.7 (2.6) Gold Coast 114.4 (-14.7) 8.9 (-1.6) 134.8 (-8.5) 23.8 (3.9) Sunshine Coast 117.0 (-12.2) 10.7 (0.9) 130.5 (-9.8) 18.8 (2.6) Atherton 135.4 (-12.6) 26.4 (0.7) nd nd Ayr 118.8 (-14.6) 9.5 (-2.9) 123.1 (-13.5) 9.5 (-1.1) Biloela 127.5 (-12.6) 18.5 (-0.7) 130.9 (-9.8) 17.5 (2.6) Blackall 150.9 (-8.3) nd 144.7 (-4.7) nd Blackwater 132.1 (-19.7) 20.5 (-7.8) 138.8 (-10.5) 22.9 (1.8) Bowen 133.0 (-12.4) 23.3 (-0.7) 132.4 (-8.2) 18.4 (4.2) Bundaberg 121.8 (-16.7) 13.4 (-3.6) 129.2 (-11.6) 15.5 (0.7) Cairns 136.8 (-11.7) 28.1 (1.6) 140.9 (-8.9) 27.1 (3.5) Charleville 127.2 (-21.6) 13.9 (-8.5) 133.4 (-15.6) 14.7 (-3.2) Charters 132.0 (-12.5) 22.4 (-0.7) 134.8 (-10.4) 20.8 (2.0) Towers Childers 122.0 (-15.9) nd 128.2 (-11.5) nd Cloncurry 142.3 (-19.3) 27.2 (-7.5) 145.2 (-13.5) 25.8 (-1.1) Cunnamulla 152.8 (-9.0) 39.7 (4.1) 153.1 (-9.1) 34.7 (3.3) Dalby 128.0 (-17.3) 21.3 (-4.2) 136.6 (-11.4) 24.5 (1.0) Emerald 131.0 (-16.8) 20.5 (-4.9) 139.0 (-10.0) 24.2 (2.3) Gladstone 129.6 (-15.2) 21.1 (-3.3) 135.0 (-10.0) 22.2 (2.4) Goondiwindi 133.9 (-9.9) 24.7 (3.2) 132.2 (-10.3) 17.6 (2.1) Gympie 120.2 (-11.7) 13.7 (1.4) 125 (-11.0) 13.1 (1.4) Hervey Bay 128.1 (-10.2) 21.1 (2.9) 134.4 (-7.9) 22.1 (4.5) Ingham 133.2 (-13.7) nd 133 (-12.0) nd Innisfail 134.8 (-12.3) 25.4 (0.9) 138.5 (-8.9) 24.1 (3.5) Ipswich 114.6 (-13.7) 9.1 (-0.5) 134.5 (-7.8) 23.6 (4.5) Kingaroy 130.5 (-11.8) 22.7 (1.3) 131.6 (-9.4) 18.5 (3.0) Longreach 144.2 (-17.5) 26.9 (-5.5) 143.1 (-14.5) 21.4 (-2.2) Page 3 of 5
Locality ULP Indicative ULP Retail * Diesel Indicative Diesel Retail * Mackay 124.8 (-12.6) 16.1 (0.5) 135.7 (-11.1) 23.2 (1.4) Mareeba 142.0 (-9.1) 32.4 (4.1) 146.6 (-7.2) 32.0 (5.2) Maryborough 123.4 (-12.0) 16.2 (1.1) 127.2 (-10.6) 14.6 (1.8) Miles 129.3 (-12.4) nd 136.1 (-10.8) nd Moranbah 133.6 (-11.8) 21.7 (1.3) 135.8 (-11.6) 20.3 (0.9) Mount Isa 142.4 (-8.5) 26.5 (3.3) 143.9 (-6.9) 23.6 (5.5) Rockhampton 132.5 (-14.3) 23.4 (-2.3) 139.3 (-7.3) 25.8 (5.0) Roma 140.9 (-14.2) 31.9 (-1.0) 143.5 (-7.3) 29.2 (5.1) Toowoomba 126.9 (-17.6) 20.6 (-4.4) 133.4 (-11.6) 21.8 (0.7) Townsville 127.8 (-16.6) 19.7 (-4.9) 132.7 (-9.8) 20.4 (2.7) Tully 134.6 (-11.9) nd 137.5 (-9.4) nd Warwick 122.7 (-16.6) 16.2 (-3.5) 131.9 (-10.4) 20.1 (2.0) Weipa 178.9 (0.0) 60.3 (13.3) 173.9 (0.0) 50.2 (12.4) Whitsunday nd nd 140.6 (-7.6) nd Yeppoon 131.9 (-16.1) 22.1 (-4.2) 136.5 (-8.9) 22.3 (3.4) * The retail margin is the average retail price minus the average local TGP and local freight costs. The TGP and freight costs vary between cities. This indicative margin is calculated on the monthly average TGP and retail price. A time lag is not included in this calculation. Brisbane had Queensland s cheapest ULP in January 2015. The Gold Coast was the next cheapest followed by Ipswich, the Sunshine Coast and Ayr. These were 2.4cpl, 2.6cpl, 5.0cpl and 6.8cpl dearer than Brisbane, respectively. Indicative retail margins increased in all centres in Queensland. This increase was due to retailers failing to pass on savings due to the softer oil price and TGP. Ayr had the cheapest diesel in Queensland (10.1cpl cheaper than Brisbane), followed by Gympie (8.2cpl lower) and Maryborough (6.0cpl lower). Diesel sold in Childers, Bundaberg, the Sunshine Coast, Biloela, Kingaroy, Warwick, Goondiwindi, Bowen, Townsville and Ingham was also cheaper than Brisbane. Liquid Petroleum Gas (LPG) The average price of LPG in Brisbane fell by 1.4cpl in January 2015 to 72.7cplcpl. The Brisbane LPG price remains inflated compared to historic prices. The average difference between the Brisbane retail LPG price (excluding excise and GST) and the international benchmark price the Saudi Aramco Contract Price (the Saudi CP) in January 2015 was 26.5, 3.7cpl greater than December 2014, and 8.2cpl greater than the difference in December 2013 (18.3cpl). The Saudi CP for January 2015 is 29.9cpl. This is 1.9cpl greater than December 2014 and amongst the lowest since December 2008. The chart below displays the retail price of LPG in Brisbane (the blue line) and Saudi CP (the red line) for the past six months. 90 80 70 60 50 40 30 20 Fri, 26 Dec Fri, 19 Dec Fri, 12 Dec Fri, 5 Dec Fri, 28 Nov Fri, 21 Nov Fri, 14 Nov Fri, 7 Nov Fri, 31 Oct Fri, 24 Oct Fri, 17 Oct Fri, 10 Oct Fri, 3 Oct Fri, 26 Sep Fri, 19 Sep Fri, 12 Sep Fri, 5 Sep Fri, 29 Aug Fri, 22 Aug Fri, 15 Aug Fri, 8 Aug Fri, 1 Aug LPG Saudi CP Page 4 of 5
Fuel Excise Following the reintroduction of fuel excise indexation, excise was increased on 2 February in line with the CPI. Excise on petrol and diesel increased from 38.6cpl to 38.9cpl. Excise on LPG increased from 10.1cpl to 10.2cpl. Global trends, oil price and the benchmark petrol price The price of Brent crude oil in Australian dollars fell in January, losing 10% of its value and falling to a six-year record low. The average price of Brent for January 2015 was A$61.8/bbl. A price this low was last observed in December 2008 when the average Brent price was A$60.7/bbl. Brent started the month selling for A$70.6/bbl (US$57.4/bbl), fell to a low of A$57.7/bbl (US$46.7/bbl) on 20 January, before recovering somewhat to end the month selling for A$63.2/bbl (US$49.2/bbl). The retail ULP price also recorded a six-year record low in January, with prices equivalent to those last observed in December 2008. The Singapore MOGAS price and the Tapis Crude Oil price followed the trend set by Brent. The Australian dollar lost value compared to the US$ in January. It started the month buying US$0.8127 and ended the month at US$0.7781. The graph below displays the average Brisbane retail (the blue line) and TGP (the red line) prices, the daily Brent crude oil price (the orange line), the weekly Tapis crude oil (the green line) the weekly MOGAS price (the purple line) and the US$/A$ exchange rate (the teal line) for the past six months. The ULP retail and wholesale, Brent, Tapis and Singapore wholesale MOGAS prices are plotted against the left axis in cents per litre (A$) and the exchange rate is plotted against the righthand axis in A$ per US$. 170 150 130 110 90 70 50 30 Outlook Fri, 26 Dec Fri, 19 Dec Fri, 12 Dec Fri, 5 Dec Fri, 28 Nov Fri, 21 Nov Fri, 14 Nov Fri, 7 Nov Fri, 31 Oct Fri, 24 Oct Fri, 17 Oct Fri, 10 Oct Fri, 3 Oct Fri, 26 Sep Fri, 19 Sep Fri, 12 Sep Fri, 5 Sep Fri, 29 Aug Fri, 22 Aug Fri, 15 Aug Fri, 8 Aug Fri, 1 Aug 1.6 1.4 1.2 1 0.8 0.6 0.4 ULP TGP ULP Brent Crude MOGAS Tapis Crude US$/AU$ Exchange Rate The price of Brent strengthened in the last week of January and into early February. This was due to increases in the Brent price in US$ and falls in the value of the Australian dollar. The oil price in US$ is likely to strengthen and the Australian dollar could weaken further. On 3 February the Reserve bank of Australia lowered the cash rate by 25 basis points to 2.25%, causing an immediate 2% fall in the value of Australian dollar. The strengthening oil price is likely to lead to an increase in the monthly average retail price of fuel. This may not be clearly evident in pricing trends in metropolitan Queensland as fluctuations in retail margins (the price cycle) have a substantially greater impact on day-to-day price movements. The next monthly fuel price report will be released in early March. For more information about recent movements in retail fuel prices, please view RACQ s Fair Fuel Price service at www.racq.com.au. Data sources All data presented in this report are RACQ calculations using MotorMouth.com.au, FUELtrac, RBA, ATO, AIP, Bloomberg.com, BP, Viva Energy, Caltex, Mobil, United, Freedom and Puma data. Page 5 of 5