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Petrol inquiry to focus on bush

Jan 15, 2015
The ACCC will ask why consumers in regional Australia pay so much more for fuel.

The ACCC will ask why consumers in regional Australia pay so much more for fuel.

The consumer watchdog says it will rely on its compulsory powers to get to the bottom of pricing anomalies between the city and the bush.

ACCC chairman Rod Sims says there is a “presumption” of price gouging in regional areas, where motorists often pay much more for petrol, and which cannot be explained away by distribution lags and transport costs.

An analysis of bowser prices in regional locations in July 2014 shows the monthly average retail price of petrol was 5.7 cents per litre higher than in the five largest cities. By December, this difference was 17.6 cents.

“It does look as if these markets aren’t operating as competitively as they should because these price reductions haven’t been coming through as fast as they should,” Sims told the ABC on Thursday.

“I think at the moment you have to say that the presumption is there is a bit of gouging going on in the sense that the price falls internationally aren’t being properly passed on into the market place.”

The ACCC will next month publish its first quarterly report on petrol price movements, which will analyse what drives petrol prices, with a focus on three regional markets.

And the ACCC will also be able to call on its compulsory information gathering powers, activated under ministerial direction, in an effort to explain the pricing anomalies.

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The powers give the ACCC a legal right to obtain sensitive pricing information from companies, along every level of the fuel chain, in specifically targeted markets.

The three regional locations to be studied in this way will remain secret until after the compulsory notices have been issued to avoid market players altering behaviour before the probe begins.

The first market to be targeted will be announced in March.

The studies will look at the cost of fuel in the nearest port, transport and storage costs, as well as wholesale, distribution, and retail costs to fully explain prices and where money is being made in the petrol price value chain.

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