NRMA Motoring & Services President Wendy Machin said if motorists could fill up when prices were at the low point of the cycle they could typically save up to 12 cents per litre.

“This time of year most families head out of town for the Christmas break and we want them to fill up before Thursday lunchtime if they can,” Ms Machin said.

“The average price in Sydney today and Thursday morning should be around $1.14 cents per litre before it increases dramatically on Thursday afternoon.

“The difference on a tank of fuel for the average family car could be as high as $8.”

Motorists can confirm they are not being over-charged for petrol these holidays by visiting NRMA’s Petrol Barometer at www.roadtube.com.au.

The barometer will hit the red zone if the average price of petrol in Sydney is four cents per litre or higher than NRMA’s suggested fair price, which is determined by monitoring the Singapore Mogas price, Australian dollar and weekly price cycle.

The NRMA will be working throughout the Christmas and New Year break to monitor fuel prices and highlight if motorists are subjected to a Christmas price hike like last year.

“Christmas Day lands on the most expensive day of the week,” Ms Machin said.

“However that does not mean the oil companies can charge whatever they want so we will be monitoring their behavior closely.”

A survey of almost 1,300 motorists in NSW and the ACT found that 73 per cent of motorists expect petrol prices to rise in the coming months. Almost two-thirds (62%) believe profiteering by the oil companies will be the cause, rather than market forces.

The NRMA has today launched its new Petrol Barometer at www.roadtube.com.au, which will enable motorists to see if they are being over-charged for petrol on a daily basis.

NRMA President Wendy Machin said the service was being launched in time for the Christmas holidays when thousands of families go away and prices had previously increased unexpectedly.

“Over the last two years we have seen sudden price increases at Christmas time – through NRMA’s new Petrol Barometer motorists will be able to see if they are paying a fair price for fuel every day,” Ms Machin said.

“We will look at the factors which influence daily price movements including the Singapore Mogas price, the exchange rate and Sydney’s weekly price cycle because Sydney prices fluctuate daily.”

The barometer will light green when prices in Sydney are in line with where the NRMA’s research suggests they should be set; amber when prices are two to three cents higher; and red when prices are four-cents-per litre or more above NRMA’s suggested price.

“Our new barometer will mean the actions of the oil companies will be under constant public scrutiny,” Ms Machin said.

“If the barometer reaches red then the NRMA will notify the Petrol Commissioner.”

The barometer will also tell the public when the cheapest and most expensive days are for buying petrol so that motorists can save money at the pump.

“It will also help identify any unexplained movements in the cycle, like the one three weeks ago when the cheapest day shifted from Wednesday to Thursday morning,” Ms Machin said

The Petrol Barometer can be sourced at www.roadtube.com.au and will also have a widget application so that it can be shared on social media sites.

Mr Borger said that from December 19, one hour of structured driving tuition by a professional driving instructor will count for three hours in the learner driver logbook.

“These changes to the NSW Graduated Licensing Scheme for novice drivers will be capped at a maximum of 10 one-hour lessons counting as 30 logbook hours.

“This means learner drivers will still need to complete 120 hours of driving in total, but 30 hours will be recorded in the driver’s log book for 10 hours of professional driving instruction.” Mr Borger said.

“Also from December 19, learners who are 25 years old or over will no longer be required to complete a log book.

“This is a sensible approach as research shows older learner drivers are more inclined to drive safely than younger novice drivers. For many of these older learner drivers, the 120 hour logbook requirement is a significant barrier that impacts on their work and family commitments. “ Mr Borger said.

NRMA Group CEO Tony Stuart congratulated the NSW Government on today’s announcement and said it was a win for learner drivers and their parents.

“The NSW Government has obviously listened to the concerns of parents of learner drivers and responded accordingly,” Mr Stuart said.

“The NRMA is pleased the NSW Government has struck a happy medium between making sure learner drivers get the best breadth of driver training experience possible while also providing some relief to parents who had to spend 120 hours in the car with their children.

“These changes will help ensure learner drivers qualify for their Ps as better drivers and will help parents too.”

Mr Borger said that under the changes, lessons are not compulsory. However the program will act as an incentive for learner drivers to obtain professional lessons while they are learning to drive.

“In the early stages of driving solo, many novice drivers crash through inexperience.

“We know from research there are road safety benefits for learner drivers obtaining as much practice as possible in a wide range of driving situations and conditions, Mr Borger said.

“Parents and non-professional supervising drivers play a vital role in helping learners get experience but professional driving tuition also plays an important role.

“In particular, research shows that lessons are more likely to be of benefit if they are structured, focusing on safe driving practices.

“These changes will help learner drivers as well as mums and dads and other supervisors who may find it difficult to reach the 120 hour target,” Mr Borger said.

Mr Philip Dacunto of West Ryde, and father of twin boys, Ben and John who are learning to drive, agrees.

“This is good news for me and my wife. With two boys learning to drive, we always knew we would be spending a lot of hours supervising them both. We are experienced drivers but lack the formal teaching skills and it makes sense that their professional lessons should count for more than our parent supervised lessons.” Mr Dacunto said.

One of the twins, Ben Dacunto said, “It’s great that professional lessons will count for more hours in my log book. The structured program means my parents will have a better awareness of the skills I need to become a safe driver.

Jeff McDougall, President of the Australian Driver Trainers Association (ADTA) is working with the driving instruction industry to roll out a structured program for NSW learner drivers.

“The program focuses on hazard perception and safe driving and will be of particular benefit in the early stages of the learner licence.

“It will be used to develop a partnership with parents, thereby supporting learner drivers and encouraging much needed practice,” Mr Borger said.

The shift in the weekly price cycle comes as NRMA releases new research that shows that the majority of motorists (55%) still think Tuesday is the cheapest day of the week.

The cheapest day in Sydney’s weekly price cycle shifted from Tuesday to Wednesday in January 2004 and has now moved to Thursday morning in the last three weeks. The price jumps dramatically on Thursday afternoon as people are driving home.

NRMA Motoring & Services President Wendy Machin said the Government’s demand for an investigation into the weekly price cycle could not have come at a better time.

“Something untoward is happening with the weekly price cycle,” Ms Machin said.

“It’s a shame only less than two per cent of motorists are currently buying fuel at the cheapest time of the day – we want the public to know they are missing out on cheaper fuel.”

The NRMA’s research found that the majority of motorists were buying fuel on Tuesday (38%), followed by Wednesday (28%) and Saturday (26%) – less than two per cent were buying petrol on Thursday.

Friday remains the most expensive day of the week, after prices jump by up to 15 cents per litre on Thursday afternoons – the point where the cycle goes from the cheapest to the most expensive day of the week.

“The public deserves an explanation from the oil companies as to why the weekly cycle has moved again without warning,” Ms Machin said.

“If the NRMA had not discovered the change in the weekly price cycle in Sydney, motorists would have been none the wiser.

“Motorists were still coming to terms with the shift in the price cycle from Tuesday to Wednesday and it has now happened again.

“If the public is going to be subjected to the wild fluctuations of the weekly price cycle at the very least the oil companies should be forced to make it public when they decide to change the cheapest day.”

The NRMA is encouraging all motorists to buy petrol on Thursday morning if they can. Oil companies sell their fuel at a discounted rate at the low-end of the cycle before prices increase considerably at the high-end of the cycle.

The survey contradicts the forecast made by the NSW Auditor General.

While three-quarters of people surveyed use the M4, only nine per cent intend to use the motorway more frequently once the toll is removed.

The survey also found broad support (71 per cent) for the Government’s decision to remove the toll in February next year once the contract with the private operator expires. Only 14 per cent wanted the toll kept.

Motorists can have their say on the M4 toll at www.roadtube.com.au

NRMA Director David Bentham said the Government’s decision to keep its promise to remove the toll would be a litmus test of future road projects.

“Motorists in western Sydney have more than paid for the M4 Motorway and they deserve to have the road returned to them,” Mr Bentham said.

“The NSW Government is right to keep its promise to remove the M4 toll next year.

“The public should be able to have faith that once toll roads built in partnership with the private sector are paid off, the roads are returned to their rightful owner – the taxpayer.”

The NRMA survey also found a lack of support for the Government keeping the toll to fund road projects:

- Keeping the toll (without cash back) to improve roads and public transport in western Sydney (14%)
- Keeping the toll with cash back to fund roads (14%)

“The NRMA does not support the view that the toll should be kept to fund future road projects,” Mr Bentham said.

“Motorists already contribute heavily to the public purse through the fuel excise, vehicle registration and other charges and existing tolls.

“Investing much needed funds in the state’s struggling road network must be done without an additional tax being forced on the public.”

For the third year in a row, NRMA’s Free2go team will set up revive sites along the Pacific Highway for young drivers to take a break. This year two sites will be located at Twelve Mile Creek (north of Newcastle) and Yelgun, near Brunswick Heads.

NRMA’s Free2go service provides roadside assistance to almost 100,000 young drivers in NSW and the ACT. The service, which was previously available to 16 and 17 year olds, has now been extended to all young drivers aged 20 and younger with the first year’s membership free.

The sites are open to all motorists but are designed to encourage young people to make regular stops on their journey and will include:

• Free food and drinks
• Vehicle health checks by NRMA patrols
• Road safety material
• Games zones with Nintendo Wii, air hockey, pool tables and table tennis

The NRMA recently released a report, which showed that that only half the Pacific Highway has been upgraded to a safe standard 20 years after two bus crashes claimed 56 lives.

“For many of these young drivers this is their first road trip without their parents,” Ms Machin said.

“These Year 12 students have worked hard throughout the year and Schoolies Week is a great way to celebrate the end of school.

“We do not want what should be a fun holiday ruined by tragedy on the road – that’s why we’re encouraging all young drivers, indeed all drivers, to stop at the Free2go revive sites and have a break.”

The NRMA Free2go Revive Sites will be open from Thursday 26 November to Saturday 28 November from 9am to 7pm.

NRMA President Wendy Machin said the report found that the Australian and NSW Governments’ target of duplicating the entire length of the Pacific Highway by 2016 was unlikely to be fulfilled.

“While the Australian Government should be congratulated for injecting much needed funds over the past five years, unless there is a further injection of funds, people using Australia’s busiest road will have to continue to put up with a sub-standard highway,” Ms Machin said.

Currently, only 50 per cent of the route has been upgraded, despite $3.5 billion in State and Commonwealth investment since 1989.

“The report found of the projects for which full data is available almost seven-in-ten Pacific Highway upgrade projects finished late, meaning the Australian and NSW Governments will need to ensure no time is wasted between now and 2016 if the Pacific Highway becomes dual carriageway,” Ms Machin said.

“Governments need to recognise the necessity of duplication as increasing numbers of passenger and freight vehicles are now using the Pacific Highway as its condition improves – particularly where the highway serves town centres.”

The key findings of the report are:

1. Overview of the Upgrade
In the 20 years since 1989, over $3.5 billion has been spent on 93 projects covering a total distance of 821 kilometres between Hexham (near Newcastle) and the Queensland border. This length is greater than that of the highway itself as it includes widenings, bypasses and realignments that may be duplicated in a total length.

2. Progress of the Upgrade to date
(a) Of the 821 kilometres of road project lengths identified between Hexham and the Queensland border:

• 410 kilometres (50%) has been upgraded
• 411 kilometres (50%) is still to be upgraded (including projects currently underway).

(b) Of the 93 projects:

• 56 projects (59%) have now been completed; and
• 37 projects (41%) are still to be completed (including projects currently underway).

(c) “Promised Completion” dates versus “Actual Completion” dates for projects:

• Of the completed projects, it was only possible to compare the original promised completion date with the actual completion date for 25 of these projects. Eight projects were completed early and 17 were completed late.

3. The 2016 completion deadline
(a) On 20 October 2009, the Secretary of the federal Department of Infrastructure, Mike Mrdak, confirmed in a Senate Budget Estimates hearing that the government target for the Pacific Highway upgrade was still completion by 2016.

(b) Currently 50% of the route remains to be upgraded. At the present rate of expenditure, government forecasts estimate route duplication could be between 80 and 85% complete by 2014.

(c) The 2016 completion target is unlikely to be achieved without an injection of accelerated funding.

4. Impact of the upgrade on crashes and fatalities
(a) Despite the improvements provided by the upgrade, and better knowledge of accident treatments, crashes have increased due to the growth in Pacific Highway traffic volumes, especially since 2005. While there has been a general trend in fatality reduction, increased traffic volumes and protraction of works has kept crash numbers at a steady level.

(b) Human suffering, lost productivity and property damage from Pacific Highway crashes represent a significant cost to the community. Accident savings from the improvements are dramatic. Where project completion data is available for analysis, projects that were completed early were valued as saving $4.2 million for the community. However, the cost to the community of delayed upgrades, has been calculated as $67.3 million.

(c) For the 25 projects where target and actual completion dates were known, the cost in surplus road trauma to the community amounted to $64 million (even when the early completion of 8 projects was taken into account).

(d) The safety benefits to motorists of completing the upgrade are massive. This also means that if the upgrade is not completed by 2016, the cost in human suffering, lost productivity and property damage will be significant.

Despite the improvements and better knowledge of accident treatment, crashes have been increasing due to the growth in traffic, especially since 2005.

Ms Machin said the NRMA would like to see accelerated funding for the remainder of the Pacific Highway upgrade in an effort to deliver a national road that carries the confidence of Pacific Highway communities.

“The sooner Coroner Waller’s recommendations are implemented the more money and lives will be saved.”

The NRMA has undertaken its daily analysis of the Singapore Mogas price (Australia’s international benchmark for fuel prices) and movements in the Australian dollar and found that average prices in Sydney today should be $1.25 per litre.

Prices should begin to fall over the weekend in line with the weekly price cycle.

NRMA Motoring & Services President Wendy Machin said while it was expected that some service stations will sell petrol above the average price of $1.25, prices in excess of $1.30, or five cents above the average price, would be too high.

“Thanks to NRMA’s RoadTube website motorists across NSW can help the NRMA keep oil companies honest every day of the week,” Ms Machin said.

“Motorists can upload videos or post blogs on RoadTube identifying areas where petrol prices are too high.

“Friday is the most expensive day of the week so we should see prices start to fall over the weekend when families are returning home from the break.”

Ms Machin said if the average price of petrol exceeded $1.25 cents per litre the NRMA would write to the Patrol Commissioner and include blog comments and videos uploaded on RoadTube by the public over the weekend.

“This Wednesday the average price of unleaded petrol in Sydney was 113.8 – the lowest in three months,” Ms Machin said.

“Falls in the price of Singapore Mogas and a strong Australian dollar are forcing prices down and these savings are being passed on to motorists.

“We expect the oil companies to do the right thing this long weekend, however if an unwarranted long weekend price hike is forced on motorists the NRMA will respond – and we are calling on all motorists to help us.”

The NRMA is also reminding the public not to use their phone while driving.

Contact: Peter Khoury 0439 133 115

The NRMA research analysed average weekly price movements for regular unleaded petrol in Sydney against premium unleaded petrol (95/96 and 98 Octane) from 28 June 2006 to 13 September 2009.

When the gap between regular and high grade fuels hit its peak in August 2009, motorists were being charged almost ten cents per litre more for 95/96 Octane and almost fifteen cents more for 98 Octane.

The NRMA believes the gap between the various grades of fuel should be at least three to four cents less per litre than less than is currently being charged.

Motorists are being encouraged to report high prices of 95/96 Octane and Octane 98 fuel on its RoadTube website – www.roadtube.com.au.

NRMA Motoring & Services President Wendy Machin said the widening gap between the costs of fuels was disturbing and worthy of an investigation by the ACCC.

“On 29 July 2007 the weekly average gap between regular and 98 Octane petrol was around nine cents per litre, on August 30 2009 the gap was almost 15 cents,” Ms Machin said.

“Clearly something is not right. We have taken the extra cost associated with refining high grade fuels into consideration and there is still a considerable gap.

“Many motorists have no choice but to use high grade fuels for their vehicles and it appears they are being over-charged. That’s why the NRMA has written to the Petrol Commissioner asking for an investigation into the price discrepancies.”

The gap between the two premium grades against regular unleaded continues to widen.

Ms Machin said unless action is taken motorists who use high grade fuel would be forced to pay higher prices in the future.

“NRMA is concerned that this gap between different fuels will continue to widen, especially after E10 fuel becomes mandated from July 2011 and regular unleaded petrol is phased out of the market,” Ms Machin said.

“This means motorists will be left with even fewer choices at the pump and the NRMA fears many motorists will be required to pay relatively more per litre for premium unleaded petrol.”

A graph showing the widening gap for the premium unleaded petrol grades against regular unleaded petrol is attached.

Contact: Peter Khoury 0439 133 115

Figure 6: Widening Gap for Average Weekly price movements - Premium (95/96) against Regular unleaded for week ending 9 July 2006 to 13 September 2009

Figure 7 Widening Gap for Average Weekly price movements - Premium (98) against Regular unleaded for week ending 9 July 2006 to 13 September 2009

Data Source : Informed Sources

1. The fuel price differentials between regular unleaded petrol (91 octane) and premium unleaded petrol (95/96 octane and 98 octane) for the period week ending 6 August 2006 through to week end 13 September 2009 ;and
2. The growing relative average price differential between the premium unleaded petrol grades (95/96 octane and 98 octane) and regular unleaded petrol (91 octane), over the same period of time.

The average price differential between these two grades of premium unleaded petrol when compared to regular unleaded petrol over the period week ending 6 August 2006 to 13 September 2009 is:

1. 7.7 cents per litre between premium unleaded petrol (95/96 octane) and regular unleaded petrol; and
2. 11.6 cents per litre between premium unleaded petrol (98 octane) and regular unleaded petrol.

This analysis implies that the differentials may not reflect the true cost impost between the various grades of unleaded petrol.

Background

This report examines the price differentials between the various grades of unleaded petrol with particular reference to:

• Ethanol (E10) unleaded petrol;
• Regular unleaded petrol (91 octane); and
• Premium unleaded petrol grades (95/96 octane and 98 octane).

It is also pertinent to note that:

1. Shell have provided some guidance on their website highlighting a 6 cents per litre differential for Premium Unleaded 95 Octane petrol when compared with Regular unleaded petrol, and a 10 cents per litre differential for Premium Unleaded 98 Octane petrol.
2. Observations involving a number of Caltex (Woolworths) service stations in the St George and Sutherland Shire areas in southern Sydney over the past five months has shown a 9 cents per litre differential between Regular unleaded petrol and Premium unleaded (95 Octane) and a 15 cent differential between Regular unleaded petrol and Premium unleaded (98 Octane). These price differentials seem to be standard price deviations that are held constant.

Analysis

Price comparison of unleaded petrol grades

The following analysis examines the weekly average price movements for all grades of unleaded petrol for the Sydney metropolitan area for the period 6 August 2006 through to 13 September 2009.

Figure 1: shows the price movements for the for grades of unleaded petrol for the period week ending 6 August 2006 throught to the week ending 13 September 2009. The graph illustrates both the rise in petrol prices to July 2008, the huge falls that occurred in the second half of 2008 and the rising upward trend in 2009.

Figure 1 also highlights the close correlation between E10 and regular unleaded petrol prices with very little discrepancy in the two average price lines.

In addition the price movements between the four grades of unleaded petrol show similar price movements over the period under examination.

The lowest and highest set of prices occurred on the weeks ending 21 December 2008 and 3 July 2008 respectively. (see Table 1)

Figure 1: Average Weekly price movements for E10, Regular ULP, Premium (95/96 and PULP 98) for week ending 6 August 2006 to 13 September 2009

Price Differential between E10  and  Regular unleaded petrol (Octane 91)

The average price differential between these two grades of unleaded petrol over the period in question is 2.5 cents per litre.

Price data for E10 unleaded petrol has been collected since July 2006. The initial pricing strategies adopted by the major oil retailers were to price E10 petrol at a discount of 3 cents per litre to regular unleaded petrol.

Whether this discount represents the true cost of supplying these two grades of unleaded petrol is questionable. Informal discussions with several oil retailers suggest that the true price differential should be in the order of at least 4-5 cents per litre.

Figure 2: Average Weekly price movements for E10, and Regular ULP for week ending 6 August 2006 to 28 June 2009

Price Differential between Regular unleaded petrol (Octane 91), and Premium unleaded Octane 95/96 and Premium unleaded Octane 98

The average price differential between these two grades of premium unleaded petrol when compared to regular unleaded petrol over the period week ending 6 August 2006 to 13 September 2009 is:

1. 7.7 cents per litre between premium unleaded petrol (95/96 octane) and regular unleaded petrol; and
2. 11.6 cents per litre between premium unleaded petrol (98 octane) and regular unleaded petrol.

Discussions with various oil industry experts suggest that the cost differential between regular unleaded petrol and premium 95/96 unleaded petrol should be in the order of up to 6 cents per litre and an extra two cents per litre between the premium 95/96 and premium 98 grades of unleaded petrol.

Clearly these cost differentials are not showing up in the relative average price movements between the various grades of unleaded petrol.

Figure 3 highlights the average weekly price movements between the three grades of unleaded petrol. It shows a widening gap between both premium grades when compared with the regular grade. This trend has been quite discernible since December 2008.

Figure 3: Average Weekly price movements for Regular ULP, and Premium (95/96 and PULP 98) for week ending 6 August 2006 to 13 September 2009

Figure 4 illustrates the relative trend line movements of regular unleaded petrol and the two premium grades against ethanol E10 unleaded petrol.

It shows that the relative movement of regular unleaded petrol has remained relatively constant over the last 12 twelve months.

In contrast the differentials movement for the two premium grades of unleaded petrol is trending upwards.

Figure 4: Comparison of linear trend line price movements for ULP, PULP 95/96 and PULP 98 against E10 for the year ending 13 September 2009.

Figures 5, 6 and 7 show the rising average price differential between these two grades of premium unleaded petrol when compared to regular unleaded petrol.

Clearly the price gap between PULP 98 and regular unleaded petrol has risen by about 4 cents per litre since June 2008, with the corresponding gap between PULP 95/96 and regular unleaded petrol of 3 cents per litre.

The gap between the two premium grades against regular unleaded is continuing to widen.

It suggests that the price differential is widening to the disadvantage of motorists having to purchase the already more expensive premium fuel stock.

This trend also paints a picture that as E10 fuel becomes mandated from July 2011, and regular unleaded petrol is removed, many motorists will be required to pay relatively more per litre for premium unleaded petrol.

Figure 5: Price Differential for Average Weekly price movements – Premium (95/96 and 98) against Regular unleaded for week ending 9 July 2006 to 13 September 2009

Figure 6: Widening Gap for Average Weekly price movements - Premium (95/96) against Regular unleaded for week ending 9 July 2006 to 13 September 2009

Figure 7 Widening Gap for Average Weekly price movements - Premium (98) against Regular unleaded for week ending 9 July 2006 to 13 September 2009

Data Source: Informed Sources