RACQ recommends selective buying to combat high fuel prices

Rural and regional road users seething at fuel prices that aren't dropping by the same margin that metropolitan prices have are being urged to try and reward service stations that are lowering their prices in order to alter pricing behaviour.

RACQ spokeswoman Renee Smith says both diesel and unleaded petrol prices in most parts of western Queensland are at least 20 cents per litre higher than they would like to see, and it was up to competition to ensure prices were brought down to a reasonable level.

"We believe unleaded and diesel prices both remain too high in most parts of north and western Queensland and fuel companies are failing to pass these savings on to motorists at a time its needed most," she said.

The average price of unleaded petrol has fallen by about 15 cents per litre in Charleville and Longreach since the beginning of March but Ms Smith said that was simply not enough to reflect the change in the price of global oil.

Savings were being passed on in coastal regional towns south of Gladstone where the average price was now below 100 cents per litre.

In centres such as Townsville, Cairns, Mackay and Rockhampton, averages were between 113 and 119 cents per litre but should also be below 100 cents per litre, Ms Smith said.

She noted that it cost roughly 10 cents per litre to ship ULP from Gladstone to Longreach, which was one of the reasons fuel prices were higher in regional areas, along with less competition and the lack of a price cycle.

Diesel prices remain high compared to unleaded petrol because diesel usage hasn't collapsed the same way unleaded petrol usage has since the impacts of coronavirus began being felt.

Ms Smith said RACQ was seeing high retail margins on diesel prices across Queensland.

West Texas crude oil intermediate futures dropped to an incredible -$US37.63 (-$A59.74) a barrel, the lowest price in history, this week, as investors were forced to pay to have oil stored due to a lack of demand.

Thanks to COVID-19 restrictions, storage facilities are now at capacity, which is what has driven the dramatic drop.

Kennedy MP Bob Katter has written to the Australian Competition and Consumer Commission demanding answers for the disparity between regional and metropolitan price falls, saying his office had been flooded with calls from angry people sick of being put under the pump by the larger service stations.

Related: Anger grows at high Mount Isa petrol prices

"We want to know why it's $1.26 per litre in Townsville and as high as $1.40 and $1.50 per litre in Mount Isa and Innisfail, but only 90 cents per litre in Brisbane," Mr Katter said.

"I am asking the ACCC, is this unconscionable conduct?"

Ms Smith said there was no Commonwealth or state legislation or regulation in relation to what prices fuel companies could charge.

"Fuel companies are free to price their fuel at any level they see fit," she said.

"It is left to competition to ensure prices are kept at a reasonable level.

"On the whole this works, but in these extraordinary times we are seeing fuel companies use the recent falls in the oil price to bolster their margins, rather than pass the savings on to regional motorists."

Despite there being less competition in smaller rural communities, Ms Smith said motorists should always support the cheapest retailer in the area.

"Competition is what helps drive prices down," she said. "For example, Bundaberg has 20 retail sites and the average for unleaded petrol is now well below 100cpl."

In a place like Longreach, with only four retail sites and where the average was 135cpl, Ms Smith recommended using apps to determine if nearby towns had cheaper fuel, and planning fuel stops in advance.

"The important message is to use the apps and buy from the cheapest site, even if the differences is only a few cents," she said.

"Only when fuel companies lose business to their cheaper competitors will prices fall.

"Every Queenslander has a part to play in this - we all need to buy from the cheapest site, and not from the most convenient."

According to RACQ data, the top 10 dearest towns in Queensland this week were:

Diesel

Unleaded