Consumers pay less at independent fuel stations

Sep 11, 2012

(Phys.org)—A Queensland study has found that independent service stations' petrol prices were on average one cent per litre cheaper than brand retailers.

The University of Queensland and Queensland University of Technology study also found that the shop-a-docket scheme run by Caltex/Woolworth and Shell/Coles led to a reduction in by all rivals including branded and independent outlets.

UQ researcher Stuart McDonald said the study for the first time highlighted the significant mark-up in prices due to branding.

"We found that the average consumer buying at outlets such as Coles/Shell and Woolworth/Caltex petrol stations still paid a higher price than they would have paid at an independent outlet," Mr McDonald said.

"While the effect of branding for the average consumer results in a significant increase of between 0.8 to 1 cents per litre, the docket scheme produces an offset of 0.5 to 0.6 per litre.

"This brand mark-up of 0.8 to 1 cents per litre may at first seem insignificant, but it accrues directly to the brand wholesaler - in this case the four big brands, Shell, Caltex, Mobil and BP."

The research team studied pump prices at independent outlets and Shell, Caltex, Mobil and BP service stations in Brisbane, Gold Coast and Sunshine Coast from 2006 to 2008.

Dr McDonald said brand retailers had to pay a franchise fee to the brand wholesaler and this cost was effectively passed onto consumers.

The study merged price data for petrol stations to of the consumers in the surrounding area of each service .

A complex was applied to estimate the price reaction of each to that of competing stations, as well as the characteristics of the surrounding suburbs' population.

Explore further: Insider trading study shows stronger enforcement

add to favorites email to friend print save as pdf

Related Stories

Women want bargains but men prefer brand names

May 15, 2008

Women are better bargain hunters than men, with male shoppers seeking known brand names when deciding which store to go to, a Massey University study of consumers has found.

Petrol stations pollute their immediate surroundings

Feb 04, 2011

In Spain it is relatively common to come across petrol stations surrounded by houses, particularly in urban areas. Researchers from the University of Murcia (UM) have studied the effects of contamination at ...

Recommended for you

Insider trading study shows stronger enforcement

Oct 23, 2014

The first major study of the enforcement of Australia's insider trading laws has shown the number of insider trading cases brought by the Australian Securities and Investment Commission (ASIC) is increasing, ...

The unexpected benefits of adjustable rate mortgages

Oct 22, 2014

Using loan level data matched to consumer credit records, researchers have been able to determine that a reduction in mortgage payments of as little as $150 a month spurred a reduction in mortgage defaults and an increase ...

User comments : 0