As the year comes to an end it’s timely to reflect on how you might have been ripped off during 2012 and what can be done about it in 2013. Here are just some of the rip offs so feel free to tell us about others.
First up we have the ongoing petrol rip off. Poor old motorists got ripped off every day of the week as the same petrol was sold by the same petrol retailer at different prices at different locations.
At one location you could pay a higher price than another location. That’s the old geographic price discrimination trick. There’s no rational reason why the same petrol has a higher price in one suburb as opposed to the adjoining suburb or even across the road.
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Are you sick and tired of the big jumps in petrol prices when one petrol retailer pushes up prices and other retailers follow within a few hours or less? Are you annoyed when you buy petrol at one location only to find that it’s much cheaper at the location up the road?
Well, you should be! You are being ripped off! And it happens regularly. Wouldn’t it be great if all motorists had access to all petrol prices in real time through their smartphone? Wouldn’t it also be great if, while you were driving, a smartphone app alerted you to the cheapest petrol price within a one, two or three kilometre radius of your current position?
That would be great because motorists could then have a reasonable chance of finding the cheapest petrol station with the cheapest petrol prices at any particular point in time. There would be no need for motorist to physically travel around to find the cheapest petrol price. The smartphone app would do the searching for the motorist instantaneously. It’s so obvious isn’t it?
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Do you live in regional Australia or do you know someone who does? If you do, then you will know the many challenges faced by those who live there.
For those of us who live in the major cities we should spare a thought for our country cousins. We should spare a thought for those who generate a considerable part of Australia’s wealth but typically see very little back.
Governments like living off the mining and farming wealth generated in the regions but they generally don’t like giving back as much as they should to the regions. It’s easy to live in a capital city and enjoy the ready access to schools, hospitals and government services.
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It’s finally happened. One of the last quiet places left on planet earth, once left to the rare beauty of silence, has been ruined by yet another television screen.
It’s called PumpTV, “Australia’s first and only digital television network” and it pumps out news, sport and weather updates, four times a day, everyday through tiny television screens attached to the top of the petrol pump.
Yes, the petrol station, a place where even mobile phones are banned, has fallen victim to noise and distraction. Goodbye silence, hello just another example of our inability to do anything without being bombarded by some form of on-screen entertainment.
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Have you noticed a little more rhetoric lately from the Federal Government on small business matters? Well, that’s not surprising given that there’s an election around the corner and the Federal Government needs to show that it’s doing something for this key constituency.
No doubt previous Federal Labor Small Business Ministers like Craig Emerson and Nick Sherry will feel that they did ‘something’ during their time, but unfortunately for them not many people will remember or care that Emerson and Sherry were once Small Business Ministers
For those who actually remember Emerson they will recall he was the guy who stopped small businesses from getting laws to prevent them from being victims of unfair contract terms. He also didn’t like commentators pointing out that he let small businesses down in this very important regard.
So the ACCC announced last week an inquiry into the sharing of petrol pricing information by the oil companies, and Coles and Woolworths.
Are we to be excited? Well, the motoring bodies came out and welcomed the announcement. A good thing you might say. The only problem is that their reaction is predictable. Sadly, the work of the motoring bodies in exposing the petrol industry games has been very patchy, which has let their members down very badly.
Some motoring bodies are consistently very good in going after the petrol industry games while others have been weak preferring to make motherhood statements rather than getting to the heart of the issue. The problem with the motoring bodies is quite simply that some of them are passionate advocates for motorists while others act more like those politicians who try to be everyone’s friend.
There are sentences which in politics can sum up the mood of the times. In the United States in 1992 it was Bill Clinton’s “It’s the economy, stupid” which encapsulated the sense among voters that George Bush Snr was not focussed on bread and butter issues affecting family budgets.
For all the heat in Australia around issues such as border protection and gay marriage, the number one concern for put-upon families is the cost of living. It is simply staggering how expensive Australia has become. Once, tourists from the United States and Europe would come here and live like kings off the back of our low dollar; today they must think long and hard about whether a visit Down Under is affordable.
For those of us who actually do live here, the joys of a cheap holiday to the States, where you can do a year’s clothes shopping at stores like Gap for less than $200, in no way erase the often depressing budgetary reality of life in a country where the cost of power, real estate, petrol, clothes and food have been off the scale for the past few years.
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Have you ever been to Alice Springs? Well, if you have you will know that the Alice is the heart of Australia in more ways than one. If you haven’t, then you should join the thousands of overseas visitors who regularly flock to the Alice.
You will be in awe of many things in the Alice, especially when you see how a community in the middle of Australia can, in so many ways, be a microcosm of our country.
The Alice has all the great personalities you get in the big cities. There are the talk show presenters at Radio 8HA like Adrian Renzi, or “Renz” to his friends, who are great at expressing the public indignation on issues of importance to the local community. There is, of course, the local ABC Radio Station where presenters like Breakfast Show host, Stewart Brash, start the locals thinking about the day’s big issues.
The everyday driver, stranded by a lack of functional alternatives, is being forced to pay over the odds for the right to put a vehicle on the road.
And there is no relief in sight, either as a tax cut or a greater return in the form of increased road funding.
The first whack is in ever-climbing vehicle registration fees from state government; the second is from an unrelenting fuel excise which the Federal Government would love to increase but can’t.
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Here we go again. Another festive season and yet another petrol rip off!
A ridiculously unaffordable scenario
Now for some of us there’s nothing new in that - we have simply got used to being ripped off. For the free market theorists and other apologists for the big oil companies and major petrol retailers, like Coles and Woolworths, they like the fact that petrol margins have been growing even if it has been at the expense of motorists.
It’s easy for the free market theorists to turn a blind eye to motorists being gouged as some of the free market theorists may be shareholders of the big petrol retailers or may even earn big dollars advising them. They may even have a company or taxpayer funded petrol card. There’s nothing like a vested interest to cloud a person’s economic frame of mind.
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Have you ever driven around regional Australia and found large discrepancies in the petrol prices at different regional centres? Do you ever wonder why petrol prices are different in different suburbs? And have you ever been annoyed that the price of the same item may be different at different Coles or Woolworths supermarkets in the same neighbourhood?
Well, what you’re witnessing is the practice of geographic price discrimination. It’s common among our major supermarket chains and oil companies. At its simplest, geographic price discrimination means that consumers in some areas are paying a higher price for the same item than they would otherwise have paid elsewhere.
There are plenty of examples of geographic price discrimination. Petrol pricing is a well known example. Those who live in the city see it every day when they drive to work, school or the shops. Petrol prices will vary from suburb to suburb with the same petrol retailer charging a different price for the same petrol at their different outlets.
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With the debate raging about the carbon tax and whether the initial carbon price of $23 will lead to any meaningful reductions in greenhouse tax emissions, a new front has opened up in the debate concerning the real possibility that businesses will use the carbon tax as an excuse to price gouge.
Price gouging is already a problem in such areas as petrol, airport parking and even groceries. The petrol rip off is now ongoing in many regional areas and even in the city average petrol prices do not come down as quickly as they should when there are falls in the Singapore benchmark price used to calculate local prices.
Airport parking rates keep going up and visitors to major airports are held hostage to the monopoly power of the airport owners who get nasty with parking infringements if you dare to pick up a loved one from the “wrong” area.
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Are you sick of being ripped off at the petrol pump? Are you annoyed that despite ample oil supplies on the market to meet current demand the speculators persist in trying to push up world oil prices? And don’t forget that the Singapore benchmark for refined petrol used to calculate local petrol prices remains one of the highest in the world.
A rip off is a rip off. The fact is that despite consistently being an inflated benchmark the Singapore benchmark for unleaded petrol has fallen dramatically since May 6. Despite valiant efforts by the speculators to try and prop up world oil prices, the Singapore benchmark price has fallen signifcantly.
As the Singapore benchmark price falls so should the local wholesale and retail petrol prices. The problem is that falls take forever to be passed through to motorists at the pump. We are given the usual “reasons” for the time lag. We are told that it takes time for the oil companies and major retailers to clear out old stock bought at the old, higher price.
Are you fed up with costly political gimmicks by the Federal Government? Well, you should be as those gimmicks are costing you, the taxpayer, lots of money. We all know about the money wasted on Fuelwatch and GroceryChoice. While those debacles are long gone, they are not forgotten and serve as a constant reminder of how taxpayers’ money can be easily wasted.
That’s why we need to be vigilant to ensure that the Government doesn’t waste any more of your taxpayer money. Now there is one ongoing waste of money and that relates to the so-called Office of the Petrol Commissioner. Here we have a Petrol Commissioner at the ACCC that “watches” petrol prices.
You probably wouldn’t know, and perhaps don’t even care that we have actually had two different ACCC Petrol Commissioners appointed. The first left quickly, and the second one, Joe Dimasi, had been a long time ACCC staffer who was up-sized to a Commissioner title, with all the added costs to the taxpayer that a Commissioner title brings with it.
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Do you know that we have an ACCC Petrol Commissioner? If so, do you know the person’s name and what he does?
Why are these questions important? Well, simply because you as taxpayers should know that the Federal Government is using your money to employ a person who was, according to the Federal Treasurer Wayne Swan, going to be your “Petrol cop on the beat.”
When we talk of “cops on the beat” we tend to think of high visibility, deterrence and powers of arrest. On each of these criteria you need to wonder how the so-called “Petrol cop on the beat” rates?
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With petrol prices on the rise again and a federal election fast approaching, the Federal Government is scrambling to get some runs on the board. After the Fuelwatch debacle and with the first ACCC Petrol Commissioner having resigned very quickly, the Government’s tough talk on petrol prices has remained just talk.
So why does the Federal Government continue to fumble the ball so badly on petrol prices? Well, quite simply because of their continued failure to tackle the underlining problems. These problems are far reaching and together they ensure that the oil companies and Coles and Woolworths maintain and extend their stranglehold of over the petrol industry.
In fact, the Federal Government’s repeated failure to tackle the dominance of the oil companies and Coles and Woolworths lies at heart of their failure to deliver on their election promise to put downward pressure on petrol prices. Like their promise to do the same for grocery prices, the petrol promise has delivered nothing for motorists.
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As we enter an election year it’s opportune to reflect on the Federal Government’s track record on petrol issues. In doing so, it will become very obvious that the Federal Government, like the previous government, has been fumbling the ball very badly on petrol issues and motorists are paying the price.
Let’s start when the Labor party was in opposition.
Grand promises were made and expectations raised amongst the voters that Labor was different to the then Coalition Government. Kevin Rudd, Wayne Swan and Chris Bowen promised us a “tough petrol cop on the beat.” Great, you may have thought! The only thing is that we already supposedly had a “competition cop” on the beat. It’s called the ACCC.
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With the 4 major banks pushing up interest rates at will and the Federal Treasurer, Wayne Swan, looking increasingly impotent when trying to bring them into line, it’s clear that competition in the banking sector is being killed off quickly and dramatically to the detriment of struggling Australian families.
So, what’s killing off competition in the banking sector?
Well, the answer is the same as to what’s killing off competition in groceries, liquor and petrol; just to name a few.
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Have you ever wondered why Coles Express petrol stations in adjoining suburbs have different prices for unleaded petrol?
Ever wondered why Woolworths petrol stations have different prices for unleaded across a metropolitan area?
In Sydney, for example, motorists can, on some days of the week, buy unleaded petrol on the lower North Shore cheaper than can motorists in some western suburbs.
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Have you ever thought that you were being taken for a ride on petrol prices? Well, you have!
So how are you being ripped off? It’s simple really – once, of course, you know the games that can be played by the big oil companies and Coles and Woolworths.
Let’s begin at the retail level.
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