Fuel Price Surge Squeezes Retailers and Their Staff, Warns VACC
Melbourne, VIC – The Victorian Automotive Chamber of Commerce (VACC) is calling attention to the mounting pressure facing fuel retailers as global oil price increases driven by Middle East conflict and shipping disruptions flow through to Australian forecourts — hitting businesses and their frontline staff hardest.
VACC says fuel retailers are caught in a double squeeze: absorbing rising wholesale fuel costs on one side, while managing growing consumer frustration on the other.
"Fuel retailers are not the ones setting global oil prices. They're operating on margins of just a few cents per litre, yet they're the ones facing customers at the bowser when prices spike. That's an incredibly difficult position to be in," said Peter Jones, CEO, VACC.
Retail Margins Tell a Different Story
While motorists see a large number on the bowser, the vast majority of that price is beyond the control of the service station. Government taxes — fuel excise and GST — account for roughly 30–35 per cent of every litre sold. Global fuel costs including crude oil, refining and international shipping make up a further 50–55 per cent. What remains for the retailer is a slim margin that leaves little room to absorb cost pressures from any direction.
"Service stations are price-takers, not price-makers. When global markets move, retailers feel it immediately — but they have almost no capacity to cushion the blow for customers or for their own businesses," Mr Jones said.
The Double Squeeze on Fuel Retailers
For fuel retailers — many of them small, independent family businesses — the current environment creates pressure from both ends. Wholesale costs rise with global markets, while customer frustration rises at the counter.
Operating costs including freight, equipment and supplier charges also increase when fuel prices climb, adding further strain to businesses that are already running on tight margins.
"This is a genuine double squeeze. Costs go up, margins stay thin, and the person wearing all of that pressure is usually a small business owner and their team," Mr Jones said.
Frontline Staff Are Not Responsible for Fuel Prices
VACC is making a direct appeal to motorists: the person behind the counter did not set the price on the sign.
Fuel prices are determined by global oil markets, wholesale supply costs, exchange rates and government taxation — factors entirely outside the control of retail staff. Yet service station workers routinely face the frustration of customers during price spikes, despite having no influence whatsoever over what is charged at the pump.
"Service station workers don't control global oil prices or fuel taxes. They're often the first people customers see when prices are high, but they're not responsible for the price at the pump. VACC is asking all motorists to treat frontline workers with the respect they deserve," Mr Jones said.
The retail automotive industry employs thousands of Victorians in customer-facing roles. VACC says those workers should not become the target of consumer frustration generated by forces well beyond their control.
ENDS
Media contact:
Andrew Molloy
Manager Marketing, Media, Communications & Publications
P. 03 9829 1248 | M. 0457 188 375 | E. [email protected] | W. vacc.com.au
Karla Leach
Executive Manager, Marketing and Communications
P. 03 9829 1247 | M. 0429 334 832 | E. [email protected] | W. vacc.com.au
About VACC
Founded in 1918, the Victorian Automotive Chamber of Commerce (VACC) represents over 5000 businesses in Victoria and Tasmania who employ more than 50,000 people. Member businesses range from new and used vehicle dealers, repairers, vehicle servicing, parts and component wholesale/retail and distribution and aftermarket manufacture, tyre dealers and automotive dismantlers and recyclers.
VACC develops the future workforce, employing 560 apprentices and trainees through its group apprenticeship scheme, and maintains memberships with the Motor Trades Association of Australia and Australian Chamber of Commerce and Industry and contributes to the national policy debate through these leading industry associations.