Tom McIlroy, 19 February 2016

Chief Minister Andrew Barr has restated his calls for intervention in Canberra’s petrol pricing by the competition watchdog, concerned the city is being overlooked in favour of regional centres.

This week Mr Barr wrote to Australian Competition and Consumer Commission boss Rod Sims for a second time in two years, seeking a meeting to discuss higher prices paid by Canberra motorists compared with drivers in other capital cities.

In its February report, the commission found regular price cycles existed for petrol in Australia’s five largest cities, but similar cycles did not occur in regional centres or Canberra, Hobart and Darwin.

Canberra and Hobart prices were consistently higher than in the five largest cities, the report showed.

Mr Barr praised comments by Mr Sims about the failure of petrol companies to pass on failing oil price benefits to drivers and said the issue continued to concern Canberra drivers and the government.

The commission said this week motorists were paying lower prices, but fuel was not as cheap as should be expected. The average pump price dropped 8.8¢ to 124.4¢ a litre in the three months to December last year.

Canberra’s monthly average petrol price in the same period dropped to 127.2¢, from 132.8¢ in the September quarter. Sydney drivers paid 117.5¢ a litre, compared with 121.5¢ in Melbourne, 126.6¢ in Darwin and 133.5¢ in Hobart.

“Fuel prices in the ACT continue to be substantially greater that prices seen in regional areas across NSW, and the major retailers have not been able to give a convincing answer on why Canberrans have to pay more,” Mr Barr wrote.

He said the government and the commission should explore ways to ensure more accountability for fuel retailers and how they justify their prices.

“We have already seen that the introduction of Costco has resulted in surrounding retailers reducing their prices to around $1 a litre. Yet the same retailer is charging close to 30¢ a litre more on the other side of town.”

“Canberrans must be treated fairly when filing up their vehicles,” Mr Barr wrote. “Given the ACCC’s role in investigating fuel prices across Australia, I would appreciate any advice or support you may be able to offer the ACT.”

The commission wrote to major petrol retailers earlier this month, asking why prices were unreasonably high in the second half of 2015.

It said factors that may lead to relatively higher prices in Canberra and other regional locations include a lower level of local competition, lower volumes of fuel sold, distance and location factors and lower levels of convenience store sales.

The influence of the factors varies significantly around Australia, meaning there may be big differences in prices between specific regional locations.

A spokeswoman said the commission had accepted Mr Barr’s request and a meeting would take place in coming weeks.

“The ACCC is undertaking three in-depth regional market studies each year to explain each component of the prices paid at the bowser to understand why prices are higher in some regional locations.

“The locations for 2015 were Darwin, Launceston and Armidale, the locations for 2016 are yet to be announced,” she said.

The commission is analysing fuel price data to assist in selecting markets for the next set of studies and has indicated it will focus on markets that do not appear to be functioning well.

“Some of the issues driving higher prices and some of the ACCC’s recommendations are likely to be relevant to other regional cities and towns that do not have price cycles,” the spokeswoman said.

Extracted in full from the Canberra Times.