This week the Queensland Government has announced plans to launch a 2 year trial of mandatory fuel price reporting. The Palaszczuk Government approach will commence as soon as possible but will be formulated with the engagement of an industry task force with representatives from the motoring associations, government, ACAPMA and other industry stakeholders. The announcement follows weeks of vocal calls from the opposition to replicate the NSW Fuel Check system of mandatory real-time price reporting and has been declared by the opposition to be a Government backflip, but the reality appears to highlight the Government has actually undertaken a deeper analysis of the situation and a carefully considered approach.
In announcing the initiative the Palaszczuk Government pointed to lengthy engagement with industry stakeholders and extensive reviews of detailed research into the actual impact of fuel price reporting schemes in operation in New South Wales, the Northern Territory and Western Australia. While the opposition has vocally accused the Government of sitting on their hands it is clear that the Government has been undertaking industry engagement and analysis of research to gain a deeper understanding of the actual costs and benefits of similar schemes across the country.
In announcing the Queensland Government initiative Energy Minister Dr Anthony Lynham commented, “We know Queensland motorists are rightly concerned about high fuel prices. We have very real concerns about the LNP proposal. Their proposal, which has only surfaced of late after years of inactivity, including when they were in Government, is an expensive, airy-fairy scheme based on limited information. Our proposal is supported by a Griffith University study of the petrol prices monitoring schemes in NSW and the Northern Territory.”
The opposition has claimed that the Governments approach is too little too late, with Opposition leader Deb Frecklington stating that if the government had brought in the system 14 weeks ago when the opposition proposed it, Queensland would have an extra $100. “When we look at other states, it is really quite clear that there are figures of up to $6 a week [in savings],” she said.
The Government notes that the research into the current price reporting systems simply does not bear out this claim of savings with Dr Lynham noting, “Despite a $20 million price tag for the NSW scheme, the study reports a very limited impact in metropolitan Sydney, no impact in regional New South Wales and an actual increase in the price of fuel in Darwin. For Metropolitan Queensland, the report says: ‘a similar scheme implemented in Brisbane may have a less significant downward impact on ULP retail prices compared to the observed impact in Sydney.’ In regional Queensland, the study says: ‘results for NSW and regional Northern Territory suggest that such a scheme will have either negative or upward impact on the average monthly retail ULP prices’.’’
The Palaszczuk Government initiative will be finalised in conjunction with the Taskforce but differs from the NSW and NT schemes in several key ways. Commencing as a two-year trial fuel retailers will be required to collate and publish their latest prices online, on their own websites and their own apps, within 15 minutes of any change. Explaining the operation of the trail Dr Lynaham outlined that it will ensure that more current data is available to motorists and will not disadvantage small independent retailers. “The system will be required to have inbuilt safeguards against retailers’ price fixing and not inflict unnecessary red tape.” Dr Lynham outlined.
ACAPMA has expressed that while no industry is excited about more regulation it is happy to continue to work with the Queensland Government, through the Taskforce, to ensure the compliance and transparency. “ACAPMA will work cooperatively with the Government – and other stakeholders – to pursue an option that represents the least cost for fuel retail businesses, especially small retailers, and their customers.” Said ACAPMA CEO Mark McKenzie.
The debate continues over whether the announcement by the Government is a backflip or a considered response, but what is clear is that fuel retailers in Queensland will soon have another legislative requirement to meet. The question of the size and scope of the impact and the costs associated with this and other schemes will continue to be debated, researched and discussed. What is clear though, is that vigorous competition has the most definitive impact on fuel prices at the bowser. Dr Lynham said the study into the effectiveness of the NSW and NT schemes said what the Government has been saying all along – that the key to lowering the price of fuel is increasing competition.
Dr Lynham said the Palaszczuk Government would continue to examine options of how we can increase competition in the fuel market and ensure that motorists are not ripped off by the big players in the petroleum industry. “It is crucial though that the Federal Government plays the primary role. We cannot do this alone. A streamlined national approach is necessary. We are prepared to stand up for Queensland motorists. It is time the Federal Government did their bit too.’’