May 082008

Anyone who believes that supermarket chains are in the petrol game for any other reason than to boost bottom line profits, must also believe that politicians never tell lies and Santa Claus is real.


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Personally, I don’t believe that supermarket chains have any place in fuel marketing, however we live in a capitalistic democracy where market forces apparently determine costs in harmony with supply & demand. I dare say if I had sufficient corporate backing, I too could sell fuel and make money. I’m amazed though, that there appears to be no differential between retail fuel prices at a co-branded outlet and the price charged at a Caltex or Shell company outlet. Oh yes, there’s a reduced price for those who present a ‘shopper docket’ but does anyone truly believe that simply buying groceries through a given supermarket chain is going to net them cheaper petrol? Come on, people! Wake up & smell the octane.

The reason Coles & Woolworths are in league with Shell and Caltex isn’t so that they can on-sell petrol at refinery gate prices. There’s no altruism involved. I’ve stated the rationale in the opening to this post. Profit, pure and simple. You think you’re getting cheaper petrol, but has anyone actually done a study into grocery prices over the period just prior to the entry of the supermarket giants into petrol retailing and the relative prices of groceries now? Of course not! That would be both too simple to think of doing, by bureaucrats, and confusingly complex to achieve anything meaningful from, given the unlikely assistance the supermarket chains would give to such a study.

At the end of the day, fuel for internal combustion engines has become an absolute ‘must-have’ in our society. Consumers have always been at the mercy of monopolies and while many might say that between oil refiners, private retailers and supermarket chains, we don’t have a monopoly of any kind, I firmly believe we do. The petrol that drives your engine comes from the same place, ultimately, regardless of who you buy the end product from. The monopoly starts with OPEC and encompasses every middle operator between the hole in the ground to the hole in the side of your car. It’s a closed market, effectively. Call it a reverse monopoly.

There are no free lunches, and there certainly isn’t any cheap petrol, shopper docket or nay. If we could look into the before and after of supermarkets selling petrol, we’d not find any cheap groceries either. We, the consumer, will continue to be fleeced by a closed system which external forces can have no perceivable impact upon. No politician, ombudsman or private vigilante is going to change that. You either cop the shaft, ride the train or take shank’s pony.

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