What's affecting current prices?
Average Australian retail petrol prices reached a 26-month high of
140 cents per litre at the end of January 2011, reflecting the
US$25 a barrel or over 30 per cent surge in the Singapore unleaded
petrol price since September 2010.
Economists such as CommSec forecast that petrol prices around 140
cents per litre or higher are likely to remain in the coming
months, due to the recovery of economies around the globe, and in
particular the sustainable improvement in the US economy.
Oil industry analysts Energy Security Analysis, Inc .expect that
product demand will increase with further economic recovery in
2011, but believe that this growth is not enough to fully absorb
rising regional supply in the short term, suggesting that the
market will remain bearish for some time.
The continuing recovery of China and India is likely to impact
regional petrol prices, which will flow through to Australia.
Geopolitical instability in the Middle East has the potential to
continue to impact oil prices. This was demonstrated in late
January 2011 when oil prices increased by 4 per cent in one day
following the onset of civil unrest in Egypt.
Updated: February 2011
The Singapore price factor
The price of all fuel sold by Caltex is calculated using an
import parity price as a basis - that is, what it would cost to
land fuel from Singapore refineries into Australian terminals. This
includes the Singapore benchmark price for refined petrol or
diesel, the addition of a quality premium to take into account
Australia's high fuel standards, plus shipping costs and cargo
insurance. This is then converted from US dollars per barrel into
Australian cents per litre. Australian refineries must compete with
this import parity price.
How Caltex calculates petrol prices
||US$ PER BARREL (31/1/2011)
||AUSTRALIAN CENTS PER LITRE
|Price of petrol from Singapore refineries
|Add negotiated quality premium
|Add shipping costs Singapore to Australia
|Add cargo insurance
|Subtotal - convert to Australian cents per litre
|Add Australian port costs
|Import parity price
|Add government fuel excise
|Subtotal - import parity price + excise
|Add wholesale margin
|Subtract wholesale discounts
|Add retail margin
|Subtotal (indicative only)
|Add 10% GST
|Retail price (indicative only)
Notes to chart:
* One barrel holds 159 litres
* The Singapore refinery price is estimated daily by Platts, an
international information service
* The margins above are inclusive of operating costs, wages and any
loan payments and are not indicative of profit margins
Don't forget the fuel excise and tax
For every litre of petrol or diesel, whether it is imported from
overseas or made here in Australia, an excise of 38.14 cents is
collected by the Australian government. GST applies on top of the
total price, including the excise.
The wholesale level
Once the import parity price plus excise is determined, Caltex
adds a wholesale margin, which allows us to stay in business and
continue to invest in the future, as well as the cost of any
freight to deliver it to customers. From here, wholesale price
discounts may be offered to meet competition.
At the bowser
In a Caltex-branded network of about 1650 service stations,
Caltex sets the price at less than 300 sites. Woolworths sets the
price at more than 500 Caltex-Woolworths and Caltex-Safeway
co-branded stations, and franchisees, resellers and independent
retailers set the price at the remainder of retail sites. When
setting prices, retailers need to consider the wholesale price they
paid and price competitively according to other retailers in the
local market. The final price also includes 10 per cent GST.