What record high petrol margins mean for the shares of Caltex Australia Limited, Woolworths Limited and Wesfarmers Ltd

If you own a car and you’re aware of the severe crash which has been experienced in the oil sector then there is a very good chance you’d have noticed that retail petrol prices in Australia don’t appear to have fallen by a commensurate amount to the decline in the oil price.

If you’re nodding your head as you read this, then you’re not alone! In fact, the Australian Competition and Consumer Commission (ACCC) has just released its fourth quarterly report into the Australian petroleum industry for 2015 which examines petrol prices up to September 2015.

Here are the findings: The average retail petrol price in Australia’s five largest cities was 133.2 cents per litre (cpl) in the September quarter which represented a decline of just 2.6% on the June quarter.

While the ACCC pointed out that the fall in international prices of crude oil didn’t fully translate into lower pump prices due to a 9% move in the Australian dollar to US dollar exchange rate eroding some of the benefits, the ACCC also noted that

“gross retail margins (or GIRDs) in the September quarter were at their highest level since the ACCC began monitoring in 2002. Average GIRDs in the five largest cities were 11.8 cpl, an increase of 1.3 cpl from the June quarter.”

Winners: While motorists are obvious losers from a widening gap in the gross retail margin there are also potential winners and ways for investors to profit.

While the ACCC does not release details surrounding which retailers may profit the most from the current price differentials, Caltex Australia Limited (ASX: CTX), Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES) are amongst the largest domestic petrol retailers and as listed companies they all offer investors exposure to the current petrol market dynamics.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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