NEWCASTLE has been identified as a fuel rip-off hot spot after a new study found that, on average, petrol prices in the city rose five times faster than they decreased when responding to market fluctuations.
A study at the University of New England Business School has reviewed petrol prices at 111 locations across the country, looking at daily and weekly price data from 2007 to 2012.
Newcastle, Port Macquarie and Forster were named among 28 trouble areas found to show signs of a phenomenon called rocket-feather pricing.
This means petrol prices skyrocket when wholesale fuel prices increase but are slow to respond when these prices move back down.
Professor Abbas Valadkhani, who carried out the review, said pricing trends in the Hunter Region needed to be investigated because something “fishy” was going on.
“Newcastle was found to be one of the areas more likely to be involved in asymmetric pricing,” he said.
He said Newcastle had two different speeds: one when prices go up, one when they go down.
“When it comes to Newcastle, the first speed is five times greater than the one going down. This is a little bit on the high side.
“The average gross profit margin [the difference between the wholesale price and the retail price] in Newcastle is 7.8¢.
“This is quite high as well – in Mackay it is 2.4¢ and in Townsville 2.7¢.”
Professor Valadkhani said the data showed the need for a government-led fuel watch pricing agency.
He said Western Australia was the only state with such a body. And though he could not prove any connection, it had none of the pricing issues found in other areas.
The Australian Competition and Consumer Commission (ACCC) said they had reviewed Professor Valadkhani’s paper and welcomed his research.
A spokeswoman said because fuel prices were determined by the market, individual retailers could set their own fuel prices as long as they did so independently of other retailers.
“Where there is information to suggest that high prices could be the result of collusion, the ACCC would not hesitate to investigate and take action where there was evidence of anti-competitive behaviour in breach of the Competition and Consumer Act,” she said.
“The fact that in some locations petrol prices rise more rapidly than they fall is not of itself evidence of a breach of the act.
“While there are local price differences, Australian retail petrol prices are largely driven by changes in international refined petrol prices and the AUD-USD exchange rate.”