BENDIGO enjoyed cheaper petrol prices than Melbourne in three out of the four years studied as part of a state government enquiry into regional fuel price disadvantage.

Nazih Elasmar, chair of the Victorian Parliament’s Economic, Education, Jobs and Skills Committee conceded there were few recommendations it could make to reduce regional petrol prices because “most of the retail fuel price consists of the international benchmark price and Australian Government taxes”.

Based on experience in other Australian states, mandatory reporting of fuel prices did little to reduce the cost of petrol, Mr Elasmar said.

Price comparing apps were effective but only when they were up to date and covered all service stations.

“In its regional market studies, the Australian Competition and Consumer Commission found that despite the prevalence of fuel pricing apps and websites, many small, cheaper independent service stations are not covered,” the report said.

“If consumers are unaware of cheaper prices, there is no pressure on nearby retailers to discount prices.”

The most effective measure was to encourage competition between petrol retailers and that work was most effective when done locally.

Bendigo’s fuel price averages were typical of those reported in Victoria’s regional cities because competition is healthier in bigger populations.

There were five locations in regional Victoria where drivers could fill up more than half the time cheaper than in Melbourne.

The larger centres of Bairnsdale, Ballarat, Bendigo, Geelong and Wallan were the locations with most price advantage.

It was only in the last of the study’s years, 2016-17, that petrol jumped in price in Bendigo above Melbourne’s average.

The difference that year was 1.5 cents per litre that year.

Governments, local and state, could make it easier to attract competition by making it easier to set up a service station.

“The entry of a new fuel retailer, especially a discounter, into a regional market can lead to lower fuel prices,” the report said.

“However, setting up a new service station can be costly and burdensome due to local planning policies and environmental
standards.”

The report said stakeholders suggested ways to encourage new market entrants such as setting aside land for service stations, removing planning restrictions and providing incentives or subsidies to new independent retailers.

“Some planning restrictions may hinder fuel retailers from establishing a service station on land that would attract high volumes of traffic,” it said.

“For example, a service station in a Rural Living Zone, which is a residential zone outside of a township, must not have direct access to a rural freeway and must either adjoin a commercial or industrial zone or have access to a road in a Road Zone.”

There are plans before City of Greater Bendigo planners to build new service stations in Huntly and Epsom.

– Sharon Kemp