Retail

Fear for independent service stations as thousands sign up for nationwide fuel station boycott amid spike in petrol prices

Matthew Elmas /

More than 50,000 social media users have signed up to boycott service and fuel stations across the country next month to protest high fuel prices, raising fears for independent service stations.

Angry consumers have taken to Facebook over the last 24 hours to express their support for a national weekend of action over petrol prices, organised by a Queensland local.

So far over 55,000 Facebook users have signed up for the boycott, with a further 61,000 expressing interest in avoiding fuel stations on the weekend starting from Friday, October 26.

“It’s time to rise up against the petroleum industry and make a stand,” the event’s description reads.

“The loss of fuel plus the added sales of drinks, chocolates etc should be enough to send a shock to the industry.”

The anger comes after Australian petrol prices shot up in August, reaching near four-year highs for many Australian motorists, according to analysis from the Australian Competition and Consumer Commission.

ACCC chair Rod Sims said consumers were paying about $1.45 per litre in Australia’s largest cities (Sydney, Melbourne, Brisbane, Adelaide and Perth) in August.

While prices in major capitals fell steadily between the 2013-14 and 2016-17 financial years, fuel costs in 2017-18 have increased by an average of 10% overall, the ACCC said.

“Current gross retail margins in the five largest cities are now over 50% above the 16-year average since the ACCC began tracking this data,” Sims said in August.

This is despite further ACCC research released last week finding Australians now have more choice than ever before when buying petrol.

A “double whammy” for businesses

Business owners are feeling the pain too, says CommSec senior economist Ryan Felsman.

“It’s impacting businesses around input costs for transportation,” he tells SmartCompany.

Felsman explains businesses are suffering from both higher input costs and subdued consumer spending as a result of higher household bills.

“It’s a bit of a double whammy for business at the moment,” he says.

ComSec research has tracked a steady increase in fuel and diesel prices in recent months, which Felsman says has stretched consumers and businesses.

Felsman attributed the price increases to the global price of crude oil, which has risen to above $80 a barrel, but also to what he describes as evidence of ‘price gouging’ behaviour among local retailers.

“In Sydney, we’re seeing some evidence that the difference between the retail price and the wholesale price is around 20 cents a litre,” he says.

Independents will be hardest hit by boycotts

Mark McKenzie, chief executive of the body representing petrol retailers, the Australasian Convenience and Petroleum Marketers Association (ACAPMA), says the idea retailers are at fault for the high prices is “bollocks”.

“Our businesses have had dramatic increases in costs,” he tells SmartCompany.

McKenzie says there are more than 2,000 small businesses running fuel and convenience sites across the country that are being “wrongly accused” of ripping off customers.

“We get that everyone is upset about fuel prices, but a lot of that is outside our control,” he says.

McKenzie argues a fuel boycott will hit independent fuel retailers particularly hard, and will actually put more pressure on fuel prices.

“If fuel retailers earn less income what you are doing is inadvertently putting pressure on fuel prices at a local level,” he says, explaining retailers will still have to open, pay staff and electricity bills.

SmartCompany contacted the boycott’s organiser for comment but they were unavailable.

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Matthew Elmas

Matthew is the news editor at SmartCompany.

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