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Servos ARE Ripping Us Off - And There's Evidence

15-year study shows collusion

Servos ARE Ripping Us Off - And There's Evidence

Researchers have confirmed we really are getting ripped off at the petrol pump.

A 15 year study looked at more than 1.7 million petrol price points and found evidence of tacit collusion among petrol retailers.

Dr David Byrne from the Centre for Market Design at the University of Melbourne says they discovered a market leader can lift prices, and competitors would then follow. "Big players can act like conductors, and smaller players can act like the orchestra."

It means profits for the companies jumped 700% in 5 years, from  0.71 cents per litre to 5.73 cents per litre (when at the bottom of the cycle).

If you own a Toyota Camry with a 70 litre fuel tank you are paying about $4.90 extra thanks to collusive pricing.

If you fill up your tank twice a month, you are paying roughly $120 more per year in petrol costs, a substantial increase for most Australian families.

The research team says while there wasn't explicit communication between the servos, collusion is still possible - and is legal.

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