The price of black gold is white hot in the red heart

Now you know there’s a really big issue in town when the talk show and the ABC presenters share the same level of outrage on the issue. It may not happen often but it did happen recently when I was invited by the Alice Springs Town Council to visit the Alice to talk about petrol prices.

It was an invitation I was pleased to accept and while in town I saw first hand what makes Alice Springs so special. As a destination the Alice can be described as “real Australia”. It’s hot, it’s surrounded by desert and it has people who are proud of their town. Yes, the Alice has its challenges, but it faces them as effectively as it can.

It’s got plenty of modern history too with the Ghan passing through town. There’s the Old Ghan Train Railway Museum and National Road Transport Hall of Fame where you can see lots of Australian transport history in one place.

There’s a thriving solar power presence where the frequent sunny days are used to generate electricity for local use. There’s a solar power station, and solar power initiatives at the airport and the Crowne Plaza Hotel in town. So in the Alice you can see both the past and the future as it impacts on all Australians.

As for the people, the personalities are larger than life. They’re passionate about their town and lifestyle. They’re also not afraid to speak up if they see there’s something not quite right and that’s where the petrol pricing issue comes in.

Everything in the Alice is on a grand scale. The people have big hearts. The surrounding desert is a big place as you see when flying in. The town is bordered by the big and stunning MacDonnell Ranges, and during the floods the Todd River that runs through town can become a torrent.

Given how big everything is in the Alice it’s not surprising that even the consumer rip offs are big. Having closely followed petrol prices in the Alice for many years there’s no doubt in one’s mind that Alice Springs motorists are regularly ripped off.

Late last year, for example, the wholesale price for petrol dropped sharply, but the retail petrol prices in the Alice defied gravity. While petrol prices around Australia were falling, retail prices in the Alice remained as high and as flat as the surrounding desert.

However, when wholesale prices start to rise this year, the retail prices in the Alice started to rise as quickly as the Todd River can rise during a flood.

Why the petrol rip off? It’s as simple as there being a lack of strong price competitive independents in Alice Springs. The petrol retailers in town seem to act as a cosy club. They follow each other’s prices and have no interest in undercutting one another’s prices as the retail profit margins they enjoy can be very big.

Where the difference between the wholesale price in Darwin and the retail price in the Alice can be up to 30 cents a litre there’s certainly lots of room to make a big retail profit. Yes, there are transport costs but you know there’s something wrong when retail prices in Alice are higher than other centres in the Northern Territory such as Tennant Creek and even Katherine.

The feeling of something being wrong gets even stronger when you realise that retail prices in Katherine are generally lower than those in Darwin despite the petrol having to be transported down the Highway to Katherine.

How do we get retail prices down in the Alice? Well, the so-called Petrol Commissioner could visit the Alice and have a chat with the petrol retailers. The Alice Springs petrol retailers are a quiet and reserved lot and don’t really want to talk to outside commentators about why Alice Springs petrol prices are so high.

That’s why the Federal petrol cop on the beat – the Petrol Commissioner that was introduced by Chris Bowen back in October 2008 – should visit Alice Springs. Nothing like high visibility policing to get the message through that rip offs won’t be tolerated. Surely if I can make it out to the Alice so can the Petrol Commissioner.

What else can be done to put downward pressure on petrol prices in the Alice? Well, the Alice Springs Town Council could invite a new independent petrol retailer into town. The Council could offer financial or other incentives to get a new retailer to take on the cosy club.

The Council could also enter into a commercial arrangement or joint venture with a new independent petrol retailer. That would minimise the risk for the new entrant just in case the cosy club put the heat on a new entrant. It’s good to have friends and the Alice Springs Town Council would be a powerful friend given that the Council could shift its own petrol purchases for Council vehicles to the new entrant.

In fact, all Town Councils across the Northern Territory (and around Australia) could enter into a collective bargaining arrangement whereby they could collectively negotiate for bulk purchases of petrol at lower prices. Town Councils would be well placed to get together to get cheaper petrol prices.

By being able to get cheaper prices through collective bargaining Northern Territory Town Councils would even be able to open their own petrol stations to keep the cosy club honest.

Will the Northern Territory Town Councils stand up for long suffering motorists? Time will tell, but if they are half as visionary as the pioneers that opened up the Northern Territory they will do their very best to show the leadership on the issue that’s so often missing from Canberra.