Diesel gross margins almost double

The NRMA has found that the gap between the wholesale and retail prices for diesel in 2020 is among the highest on record at 19.6 cents per litre. These margins have ballooned from last year (11.2 cents per litre), 2017 (13.1), 2016 (11.8), 2015 (10.2) and 2014 (12.4).

While most public attention has been on the average price of regular unleaded throughout the Coronavirus crisis and the delays in oil price falls being passed on to Australian motorists, the profit margins of diesel sales across Australia have been among the highest on record.

Over 40 per cent of all fuels sold to the public at service stations across Australia is diesel. Additionally, diesel is the fuel used in agriculture, mining, manufacturing and for the transportation of goods and services. Two-thirds of diesel consumption in Australia is for industrial purposes.

Australia’s international benchmark price for diesel (Gasoil) fell from a high of $US83.86 a barrel at the start of 2020 to a low of $US22.92 a barrel before rising to $US32.94 today. By contrast the average price of diesel has only fallen 33.8 cents per litre over the same period.

Since the Coronavirus pandemic took hold of Australia the gap between the wholesale price for diesel in Sydney has widened from eight cents per litre on 1 March to over 20 cents per litre in April, before narrowing this week to 17 cents per litre.

The price cycles that apply to petrol in many Australian cities prices do not apply to diesel. Diesel prices do not fluctuate to the same extent as petrol and the spread of prices across capital cities is not usually as wide. The average profit margins for diesel found in Sydney is consistent nationwide.

Current average prices for diesel in cents per litre across Australia are Sydney (114.9), Melbourne (118.5), Perth (118.6), Brisbane (118.5), Adelaide (109.4), Canberra (120.8), Darwin (122.2) and Hobart (136.6).

According to the My NRMA app the cheapest price for diesel in Sydney is 96.9 cents per litre and most expensive is 155.9 cents per litre.

NRMA spokesperson Peter Khoury said the higher profit margins of diesel prices throughout the Coronavirus crisis impacted negatively on Australia’s already struggling economy.

“Australia’s economy runs on diesel so when average prices for diesel across Australia are higher than they should be – as has been the case throughout much of 2020 – the result is it costs more to do business and that cost is often passed on to the consumer,” Mr Khoury said.

“In addition, around 40 per cent of fuel sold to Australians at the bowser is diesel – it’s a popular fuel among drivers. In just the same way that motorists have consistently been over-charged for petrol throughout the Coronavirus we have also been paying more for diesel.

“Not nearly enough attention has been paid to the rising gap between wholesale and retail prices for diesel across Australia and that stops now. It’s time for diesel prices to fall and fall fast.”