Frequently Asked Questions

Informed Sources is owned by, or was set up by, or operates on behalf of big oil companies.

False – Informed Sources is a privately owned business that was established by the current owner in 1987 to provide market information to fuel retailers. No oil companies or other parties of any kind have an interest or shareholding in the business. Informed Sources’ relationship with its clients is a supplier relationship just like any other business. We are completely independent.

Informed Sources is a private club just for big oil companies.

False – Informed Sources will provide information services to any fuel retailer in Australia whether they are big or small. Our services have typically suited retailers with a larger network of service stations, but we have very happy clients with as few as 10 or 15 service stations in their network.

Informed Sources is a secret information exchange for fuel retailers.

False – Informed Sources provide our retail fuel clients with regular and frequent industry reports of the latest prices available from the market. This is identical to other services such as those provided by AC Nielsen to the grocery industry, Synovate Aztec to the convenience industry and GFK Group to the consumer electronics industry.

We receive data from two main sources:

• Information that we survey ourselves by observing price boards that are viewable by the public
• Information that we receive from retailers in the market after the price has been set on their price board and is viewable by the public at the site (in an identical fashion to the services listed above in other industries)

With this data we also provide fuel price information services:

• to consumers via our MotorMouth website and the MotorMouth Petrol Price Tracker gadget on iGoogle
• to most of Australia’s motoring organisations (RACQ, NRMA, RACV, RAA SA and RACT)
• to partners such as Sensis, Carsguide, Yapp Mobile and Garmin (which they use to create information services on the internet, mobile phones and navigation devices.
• to the ACCC so they can monitor the activity of retailers in the market. We have had the ACCC as a client for this sort of information for over 15 years.

Informed Sources’ service is unique

False – Our service is identical to many other information services available in Australia and other countries right now for the grocery, convenience and consumer electronics industries. Our service updates our clients with the latest information regularly and frequently to match their needs in the fast changing petrol retail market. The age of the information that we publish is not uniform. Some information that we publish is about 30 minutes old, some information is up to 8 hours old and some is even days old. Our clients use this information to make decisions about what prices they should charge for their products – just like how any business would use a price monitoring service.

Informed Sources has pricing information about every service station in Australia.

False – Informed Sources has pricing information from about 50 to 60% of service stations in the Australian market at any one time.

Informed Sources’ service is almost illegal.

False – Informed Sources’ service is 100% legal. Our service only publishes fuel prices that are already publicly displayed on a price board or at the pump.

We never have and never will publish information about prices that retailers intend to charge in the future. We have failsafe systems that guarantee this can not happen.

The service that Informed Sources provides in Australia would be illegal in other countries.

False – Informed Sources has written advice direct from competition regulators in New Zealand and Germany that if we were to set up our service in their jurisdictions like we provide in Australia it would be 100% legal. The German regulator’s acknowledgement is particularly important because it was made after consideration of both German and EU statutes.

Informed Sources caused the petrol price cycle

False – The petrol price cycle existed well before Informed Sources opened for business in 1987. It was originally identified occurring in Canada in 1925. You can verify this here:

• Australian Competition and Consumer Commission, `Petrol prices and Australian consumers: Report of the ACCC inquiry into the price of unleaded petrol’, December 2007, Appendix O.
• F Edgeworth, ‘The pure theory of monopoly’, Papers Relating to Political Economy, Vol. 1, London: MacMillan, 1925, pp. 111-42.
• A Eckert, A Study of Canadian Retail Gasoline Prices, (PhD dissertation), University of British Columbia, 1999.
• A Eckert, ‘Retail price cycles and the presence of small firms’, International Journal of Industrial Organization, Vol. 21, 2003, pp. 151-70.

The petrol price cycle is unique to Australia

False – The price cycle exists for petrol in a number of countries other than Australia, as well as other products in other markets. You can verify this here:

• Australian Competition and Consumer Commission, ‘Petrol prices and Australian consumers: Report of the ACCC inquiry into the price of unleaded petrol’, December 2007 pp 162-163.
• X Zhang, ‘Finding Edgeworth Cycles in Online Advertising Auctions’, MIT Sloan School of Management, 2008
• J Feng, ‘Dynamic Price Competition on the Internet: Advertising Auctions’, Proceedings of the 8th ACM conference on Electronic commerce, 2007
• A Eckert, ‘Retail price cycles and the presence of small firms’, International Journal of Industrial Organization, Vol. 21, 2003, pp. 151-70.
• MD Noel, ‘Edgeworth price cycles: evidence from the Toronto retail gasoline market’, The Journal of Industrial Economics, Vol. 55, No. 1, 2007, pp. 69-92.
• A Eckert, ‘Retail price cycles and response asymmetry’, The Canadian Journal of Economics, Vol. 35, No. 1, 2002, pp. 52-77.
• A Eckert and DS West, ‘Retail gasoline price cycles across spatially dispersed gasoline stations’, Journal of Law and Economics, Vol. 47, No. 1, 2004, pp. 245-73.
• B Atkinson, ‘Retail gasoline price cycles: evidence from Guelph, Ontario using bi-hourly, station-specific retail price data’, Competition Bureau Working Paper, 2007.
• R Castanias, and H Johnson, ‘Gas wars: retail gasoline price fluctuations’, Review of Economics and Statistics, Vol. 75, 1993, pp. 171-74.
• M Lewis, ‘Temporary wholesale gasoline price spikes have long-lasting retail effects: the aftermath of Hurricane Rita’, Ohio State University Working Paper, 2006.
• United States Senate, Gas prices: how are they really set?, report prepared by the Majority Staff of the Permanent Subcommittee on Investigations, 30 April and 2 May, 2002.
• F Allvine and J Patterson,’Highway Robbery: An analysis of the gasoline crisis’, Indiana University Press, 1974

Petrol price cycles allow petrol companies to rip people off.

False – motorists in Australia are very much aware of the cheapest days to buy fuel in the capital cities. When motorists choose to buy petrol is a decision for them. Services such as MotorMouth provide free information to consumers about finding the best fuel prices near them every day of the week.

In addition there is a study into the potential social benefits of price cycles. You can verify this here:

• M Noel, ‘Edgeworth Cycles and Intertemporal Price Discrimination’, March 28 2009, pp.1-3