UNITED Petroleum is not a benevolent society. But the company's dramatic foray into the Wagga market must seem like an act of charity to price-weary local motorists.
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For too long, local fuel retailers have played “follow the leader” on their price boards, with suspiciously little variance in per-litre prices from one service station to another.
The entry of supermarket giants Woolies and Coles into the local fuel market in recent years ignited a few flares of competition, but by almost any measure, Wagga is still paying too much to fill up.
The question now is will United’s rivals, which were undercut by up to 10c a litre this week, be drawn into a price war? That remains up to us, the consumers.
United marketing manager Peter Maddox admits his company is deliberately trying to rattle the cage and whether it can maintain the lower prices long-term is uncertain. Whether other servos try to match United’s price ultimately depends on where we decide to fill up.
If customers flock to United, the other retailers will have little choice but to lure them back with lower prices. This is the essence of healthy competition. A high-need, homogenous product being sold at multiple outlets with customers that are extremely price aware. We can’t control the price of crude oil, we can’t control what the ACCC does and we can’t force the government to crack down on price gouging.
But we can have a say when it comes to how much we pay at the pump.
