Thursday, January 15, 2015

Surprise fall in official jobless rate casts doubt on rate cut talk; Australian dollar surges

The ABC's Peter Ryan analyses the unexpected fall in the official jobless rate. According to the ABS, the estimate for December unemployment fell to 6.1 percent with 37,400 new full time jobs created. The surprise outcome saw the Australian dollar surge and puts new doubts on predictions that the Reserve Bank will cut the cash rate this year.

ACCC boss says regional consumers are probably right to feel gouged on petrol prices

Petrol prices - two different worlds in Australia

The competition watchdog has outlined how it hopes to unravel the mystery of volatile petrol prices and uncover why it's cheaper to fill up in the city than in regional Australia.

But the chairman of the Australian Competition & Consumer Commission Rod Sims says regional consumers are probably right to feel they're being gouged by petrol retailers.

Listen to my interview with Rod Sims broadcast this morning on the ABC's "AM" program.

"I think you'd have to say the presumption is that there's a bit of gouging going on in the sense that the price falls internationally aren't being properly passed on into the market place." Mr Sims told AM.

"We need to get more evidence on that, but that's how it looks at first glance."

The ACCC is under pressure to come up with answers after a recent directive from the Small Business Minister Bruce Billson to determine why people in regional Australia paid an additional 17 cents per litre for petrol in December despite a dramatic fall in the price of crude oil.

Back in July, the gap between capital city and regional prices was narrower at an average 5.7 cents per litre.

The ACCC says that every additional cent per litre costs Australian consumers close to $200 million every year.

While the ACCC is yet to prove anti-competitive activity that breaks the law, Mr Sims is looking for behaviour that might "out" petrol retailers for inappropriate community behaviour.

"Now what we're likely to find is people making a lot of profit. We can shine a light on that and it could embarrass some people into lower prices," Mr Sims told AM.

"Just for consumers being more empowered with more information about what the  profit margins are will I think drive more change and behaviour."

Although petrol prices are not regulated in Australia, the ACCC is now equipped with compulsory information gathering powers which requires companies and retailers to provide information at every level of the supply chain.

The ACCC will produce at least eight reports in 2015 which will examine petrol price movements and what drives volatility.

The first report, covering all capital cities and 180 regional locations,  is due next month and will look at international refined prices, terminal gate prices and the exchange rate.

The price of West Texas Intermediate Crude, the global benchmark, rose today by amost six percent to US$48.48 a barrel.

However prices have tumbled by nearly 60 percent since June as strong global supply outstrips waning demand.