National fuel Watch - an idea whose time has come?
Western Australia has been doing it for years. And now the rest of Australia is going to get a national fuel watch scheme that will require petrol retailers post their prices for the next 24 hours to a website by 2pm the day before.
The scheme is set to come into force in December 2008.
How often have you driven past a servo in the morning and then back again in the afternoon and noticed that the price has jumped – sometimes massively? The national fuel watch scheme is supposed to stop these daily fluctuations, and the lesson from WA is that it works.
The Royal Automobile Club of WA told Drive.com.au that the scheme hadn’t lead to cheaper petrol, but it did enable consumers to make an informed decision about where and when to fill up their cars. It also evened out the pricing variations from day to day.
Other sources say that it has lead to an overall drop of 2c per litre on average. That means that filling a Commodore with 60 litres would save you $1.20. It doesn’t seem like much, but if you’re filling your car up once a week that figure translates to an annual saving of $62. That’s nothing to sneeze at.
Behind the national initiative is the prime minister, Kevin Rudd, who has said that the fuel watch scheme will make pricing more transparent.
And that’s got to be a good thing. There’s no other consumer good that changes in price as radically – and unpredictably – as petrol. Imagine if bread was $3.00 one morning, but then had jumped to $3.75 that afternoon? And then the following day was back to $3.50? People wouldn’t stand for it.
But for some reason, we are quite happy for our petrol to oscillate wildly, without any apparent reason. A national fuel watch scheme should bring some rationality to petrol prices – and make it easier for families to factor fuel into their household budgets.
The interesting thing about the fuel watch scheme is that it binds retailers to their 24 hour price both upwards and downwards. This means that the retailer can’t post a price and then drop it during the day.
On the surface this doesn’t make sense. Surely enabling a retailer to drop their price would be a good thing, right?
Not so. If retailers were able to drop their prices during their 24 hour notification period, there would be nothing stopping them from posting an artificially high price and then adjusting downwards throughout the day to where they want the price to be.
What do you think about the national fuel watch scheme? Is it a good idea, or just canny politicking by Kevin Rudd?
Joshua Gliddon