Petrol co-operatives research

In recent years the NSW Government has funded studies into the feasibility of establishing 'petrol banks' or petrol buyer co-operatives. That research was undertaken by the Western Research Institute (WRI) at Charles Sturt University, Bathurst and the then Australian Centre for Co-operatives Research and Development (ACCORD), which was jointly based at Charles Sturt University and the University of Technology.

The two research projects were designed to complement each other. Research by WRI focussed on the economic issues associated with the formation of co-operatives, including marketplace issues. Research by ACCORD focussed on co-operative formation issues.

Both reports concluded that co-operatives could play a role in solving the gap between city and country petrol prices.

The researchers said that encouraging independent oil companies to expand into rural and regional Australia was the best way to reduce petrol prices. However co-operatives could play a vital role in smaller communities, where independents were unlikely to open outlets.

Hastings Co-operative Limited and The Nambucca River Co-operative Society Limited both operate retail outlets and at the time of the reports gave petrol rebates of approximately 1.5 and 1 per cent respectively to their members.

Co-operatives operating as purchasing groups, negotiating bulk fuel discounts on behalf of their members have also had some success in achieving lower prices. For example, 300 to 400 Dairy Farmers Co-operative members throughout NSW, Queensland and South Australia were able to get discounts of from 1 to 5 cents a litre on petrol depending on the supplier and the State.

Another example was the Macleay Regional Co-operative Limited, whose members obtained a 3 per cent discount on the bowser price from 25 local retailers.

The research also suggested that volume sales, infrastructure, customer loyalty and a low risk of oil majors offering price support to local retailers were the keys for a successful petrol co-operative.

Individuals are able to seek further advice and assistance from the Registry of Co-operatives & Associations if they wish to set up co-operatives.

However, it needs to be said that the NSW Government will not underwrite co-operatives and that co-operatives must be responsible for their own activities.

Western Research Institute Report in PDF format (size: 222k)

Australian Centre for Co-operatives Research and Development Report in PDF format (size:100k).