No! They Don't

BP's petrol pump confession

There is now way that this could be true!

Holly Ife and Georgie Pilcher

September 06, 2007 12:00am

FUEL giant BP Australia admits it frequently raises its Melbourne petrol prices on Wednesdays and hopes its competitors follow suit.

But it denies it expects them to do so.

BP Australia retail pricing manager Brett Davidson was quizzed at an Australian Competition and Consumer Commission petrol price inquiry in Melbourne yesterday.

The weekly price cycle was caused by "rapid and reactive" discounting, and its lowest point was generally on Wednesday mornings, Mr Davidson said.

"On Wednesdays, after a period of discounting, typically one or another entity in Melbourne . . . will raise prices," he said.

In the first half of 2007, BP lifted its Melbourne prices on a Wednesday before its rivals did "about a quarter or a third of the time", Mr Davidson said.

"Was it frequently (BP who raised prices first)? The answer to that is yes. Was it exclusively BP? No."

He said Coles Express, Mobil and Caltex often led fuel price increases and recent historical data showed petrol prices generally climbed from Wednesday.

"I would have a hope, if I raised prices, that others would follow," he said.

"What triggers our decision is the desire to run a profitable business.

"When we lift our prices, we have no belief . . . or expectation that others will follow."

A worker at a Richmond BP told the Herald Sun he put the petrol price up every Wednesday on orders from head office.

"Every Wednesday it goes up," Nittin Dhall said.

"We alternate between high and low prices until Wednesday, when we set the fixed price which is best for us."

Mr Dhall said the price of petrol at the Swan St BP jumped from 114.9c to 129.9c at 1.30pm yesterday.

Mr Dhall said he had no control over the price of petrol and normally received a phone call from head office every day.

BP Australia sets prices for 260 fuel outlets Australia-wide, Mr Davidson said.

He said prices were based on a variety of factors, including observing competitors.

ACCC chairman Graeme Samuel asked Mr Davidson whether consumers benefited from the price cycle.

"I'd suspect that there is a marginal benefit to customers," he said, adding that many were aware of the cycle.

The inquiry will continue in Melbourne tomorrow, hearing from Coles Group and 7-Eleven.

A report is expected to be submitted to the Treasurer by October 15.

From The Age