Dani McDonald, 24 November 2015
SERVICE stations in Darwin were making massive profits – in some cases 10 times more than in southern states – according to a consumer watchdog report that lifts the lid on how Top End motorists were ripped off for a decade.
The Australian Competition and Consumer Commission’s report on the Darwin petrol market, released yesterday,, said Top End motorists were paying on average about 10¢ a litre more than they would have in a competitive market.
That added about $9 million a year to the collective fuel bill of Darwin motorists between 2011 and 2014.
The report said weak retail competition in Darwin resulted in higher margins and profits.
Service station sites were making $1.2 million in net profit from combined fuel and convenience sales.
That compared to sites in Adelaide that typically made between $100,000 and $200,000 in profit.
Prices have since come down, on the back of a major media campaign and subsequent action by the NT Government. The ACCC report was also critical of NT Government for its fuel card arrangement with Puma Energy, the biggest player in the local market, that gave staff and fleet vehicles a discount of 6¢ a litre.
Chief Minister Adam Giles said he would renegotiate the arrangement in 2017, when it finishes.
“That contract has been undertaken some time ago,” Mr Giles said.
While petrol costs in Darwin have dropped significantly, ACCC NT regional director Derek Farrell said Darwin consumers could see the price hikes again in the future.
“We think shining the light on the petrol companies in Darwin has made a difference and that resulted in $6 million over the last nine months being returned to motorists which could have turned into profits,” Mr Farrell said.
The report recommended more transparency, more promotion of competition in the market and a change in the NT Government fuel supply arrangements.
Mr Giles did not say if he would support the ACCC recommendations, but did point to the fuel price disclosure bill that is yet to be passed in Parliament.
Labor leader Michael Gunner said his party would accept the recommendations.
Extracted in full from the NT News.