Price wars and a pandemic: the cost of fuel in 2020

Echoing a tumultuous year globally, RACQ has revealed this was reflected in 2020 bowser prices, with retailers enjoying record-breaking retail margins and fuel sold for less than a dollar.

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According to the Club’s Annual Fuel Price Report 2020, Brisbane’s average indicative retail margins for unleaded petrol (ULP) were the highest on record at 17.5 cents per litre (cpl).

RACQ Head of Public Policy Rebecca Michael said margins were 6.8cpl higher than 2019, despite the collapse in the retail price during the height of COVID-19 travel restrictions.

“We believe fuel companies bolstered margins in an attempt to recover costs when sale volumes dried up during the pandemic,” Dr Michael said.

“Even though we saw prices drop dramatically in April in Brisbane – one day down to 88cpl – high retail margins meant fuel companies weren’t passing on those savings in full to motorists.”

Dr Michael said overall 2020 had been a cheap year at the bowser for Brisbane motorists, with an annual average price of 124.9cpl for ULP, a drop of 17.2cpl than the average in 2019.

“In April, we saw the price of fuel plummet to less than $1 - the cheapest we’ve seen in 11 years,” she said.

“Similar drops were experienced on the Gold and Sunshine Coasts and in Ipswich.

“The retail price fell because of a collapse in the oil price in the first half of 2020, due to the huge reduction in demand as the world went into lockdown to slow the spread of COVID-19.

“At the same time, disagreement in the Organisation of the Petroleum Exporting Countries led to the collapse of their oil production cut deal, and a price war between Saudi Arabia and Russia.

“Don’t expect the same record lows this year, or record highs thankfully, though prices are expected to steadily increase.”