The Castlemaine Mail spoke with Chewton Service Station owner Julie Leach to answer common questions about rising fuel prices and ongoing confusion around how they are set. Average prices across the Castlemaine and Chewton area are sitting at about $2.36 per litre for unleaded and $3.30 for diesel.
Do you expect prices to continue rising over the next few weeks?
The wholesale petrol price seems to have settled a bit over the past few days, but diesel is continuing to be on a steady incline. I expect retail diesel prices will be $3.50 or higher by the weekend.
How are these price increases affecting your customers locally?
The feedback is that customers are reducing travel to necessary trips only, perhaps utilising free public transport at the moment, and our Easter was definitely much quieter than usual (despite us selling our fuel at cost or lower over the whole weekend).
Have you noticed any changes in how people are buying fuel?
Customers are tending to top up more regularly, keeping vehicles full.
Have you or your staff experienced frustration from customers about prices?
There is definitely more frustration creeping in, often from ill-informed customers, hence our focus on keeping an information flow via social media and direct interactions.
What do you think people are misunderstanding about fuel pricing or accusations of price gouging?
Everything! I think it is important to remember that whilst the wholesale price is fluctuating, it is much more likely you will find significant variances in retail prices, even in close geographical locations, generally because of the changing wholesale prices and therefore dependent on when the retail outlet purchases, rather than because of 'price gouging.'
There's been some confusion around the fuel excise. What would you like customers to better understand?
As the 26cpl excise reduction was applied to the wholesale price just before Easter, it actually benefited the big service stations that turn over more fuel. In the main part, smaller independents like us suffered. We had significant stock in tanks at a much higher wholesale price and were unable to pass on the excise reduction, even by selling the earlier stock at cost as we did. The wholesale price of diesel has already increased in excess of 26cpl, and therefore it may be difficult to see the reduction at the bowser, even though it is there!
How are rising wholesale prices affecting how you run the service station?
There are so many flow-on effects. Even though we don't surcharge credit card payments, the government's removal of the business's ability to do so will most certainly lead to an increase in average prices. With transaction amounts increasing so drastically in a high-volume/low-profit business, this has a huge impact. Merchant fees could be at the cost of around 4cpl, often more than the profit a business is making on this transaction. Given the scrutiny on the industry at the moment, much of which is unwarranted and ill-informed, business owners are cutting costs where they can. I have been personally working more hours in the business, thereby saving wage costs. We are also looking at reducing open hours, buying strategically when we can, but mostly trying to keep customers informed with regular updates and being as transparent as we can. We are extremely lucky that we have several non-fuel revenue streams within the business; however, it is becoming increasingly more difficult to survive in this industry as a small independent station.
What are fuel prices looking like at Chewton heading into the weekend?
ULP91 — $2.30pl
98 — $2.50
Diesel — $3.20