9News: Premium Profits

9News: Premium Profits

Peter Overton: Drivers filling their cars up with 95 or 98 premium unleaded petrol are lining the pockets of the big oil companies.

The increasing trend is driving up profits and we’re being brainwashed to continue favouring that fuel.

Ross Greenwood: Caltex’s half-year profits, dripping out oil price moves and one-offs, is up a healthy 21 percent to $307 million.

Mark McKenzie: The retail margins have been pretty good, and that’s really been a consequence of fairly flat oil prices.

Ross: What’s really driving up prices in Caltex’s profit is our increasing tendency to buy premium fuels.

Caltex says its highest quality; highest margin fuel – Vortex 98 – makes up 43 percent of sales compared with 35 percent five years ago.

Its not just petrol …

Premium diesel is also in higher demand.

Peter Khoury: We’re seeing more diesel cars in Australia than ever before

Ross: Take note of the oil companies television ads…almost inevitably they are trying to sell you the premium fuel.

That’s because that’s where they make the biggest margin.

So the more they sell, the more they make.

Peter: You hear the word premium, you think you’re getting a premium product and unless your car absolutely needs it… there is every chance you’re not really getting the benefits you think you’re paying for.

Ross: Adding pressure, earlier this year Caltex lost a bidding war to beat BP to buy 527 Woolworths service stations for $1.8 billion.

Now, the ACCC is deciding if that deal will go ahead.

The Commonwealth Competition watchdog took a step to allow BP to use Woolies shop-a-dockets, offering up to 4cents a litre petrol discount, but only if the takeover is successful.

Rod Sims: We’ve always had the view that above 4 cents a litre, it starts to raise the whole underlying price of petrol.

Ross: Ross Greenwood; Nine News

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