25 November 2009
MOTORISTS were laughing all the way to the bowser yesterday when a fuel price war broke out in Darwin. United celebrated taking over the BP service station on the Stuart Highway at Winnellie by slashing the price of unleaded petrol to $1.14 a litre.
Caltex Woolworths on Trower Rd at Casuarina responded by cutting its prices to $1.15.9, even without the 4c-a-litre discount for Everyday Rewards Card holders.
Most other servos were selling at $1.30.9. The price war could herald the start of Cheap Tuesday in Darwin. Prices are heavily cut every Tuesday down south - but the custom has yet to reach the Territory. Woolworths spokesman Luke Schepen readily admitted that prices had been axed because of United. "We aim to match our competitors," he said.
Consumer expert and New South Wales University associate professor Frank Zumbo said the price war made Darwin competitive with southern capitals.
Unleaded petrol was being sold for an average of $1.15.9 in Sydney and $1.15.3 in Melbourne yesterday.
Professor Zumbo said the sharp reduction in Darwin prices was caused solely by "an aggressive independent" operator.
"This is clear evidence that the rest of the time Darwin motorists are being ripped off," he said. "Traditionally, Darwin motorists have had to pay much more than they should. But with this outbreak of competition, prices have come down.
"It's when people can act as a cosy club that you get higher prices. This shows that there is a need for more independents in the market."
The wholesale price of unleaded fuel was $1.18.99 in Darwin yesterday - meaning United and Woolworths were selling at a loss.