Daryl Passmore, 19 April 2016

THE high price of petrol in Cairns will come under the spotlight in a formal investigation by the Australian Competition and Consumer Commission.

The watchdog today announced the Far North Queensland city will be the target of its next regional price monitoring inquiry – the first in the Sunshine State.

Officials will probe the reasons why Cairns motorists pay an average 12.3c a litre more to fill up than Australia’s five largest cities – and up to 25.3c.

Chairman Rod Sims said the ACCC will also continue to keep a close eye on the “weird’ Brisbane market in its quarterly reports.

The move – just weeks after the Palaszczuk Government-ordered Fuel Price Summit – was welcomed by Main Roads and Energy Minister Mark Bailey.

“I’ve been calling on the ACCC to launch a study into the Queensland market as soon as possible,’’ he said.

“They have the tools and expertise to bring real scrutiny to the Queensland market. And by holding the investigation in Cairns, I hope they’ll get an insight into our other regional locations too.’’

Mr Sims told The Courier-Mail that service station prices in Cairns ‘’are both high and anomalous’’.

Last year, Cairns motorists paid an average 146.4c per litre for unleaded fuel. Mr Sims said not only were they much more expensive than the capital cities’ average, they were well above comparable centres such as Townsville and Mackay and even towns such as Mareeba, Atherton and Innisfail. “They are much smaller places with less competition, you would imagine,’’ Mr Sims said.

“We really have to get to the bottom of this.

“We want to know to what extent these higher prices are due to higher costs or smaller volumes and to what extent they are due to higher profits somewhere along the supply chain.

“We will be looking at who is leading prices up and who is leading them down.’’

The investigation is expected to take about six months. Fuel retailers, wholesalers and other industry players will be required to provide information and consumers and other interested parties can make submissions.

This is the fourth regional investigation undertaken by the ACCC. The first, in Darwin, led to immediate price reductions which transformed it from the most expensive to the cheapest in the country.

Mr Sims said he was unsure whether the Cairns inquiry would produce a similar short-term impact. “We’ll wait and see what happens. It will be interesting.”

Although no ‘’deep dive” inquiry is currently planned in Brisbane, Mr Sims said: “We will keep an eye on the Brisbane market. Prices average two to three cents a litre more than other capitals, which is very strange.’’

RACQ executive manager of public policy Michael Roth said the Cairns inquiry was ‘’very good news’’.

“This is something the RACQ has been calling for, as did the minister at the fuel price summit. It’s good to see the ACCC has listened.’’

Higher fuel prices had an impact on the whole economy in the far north city, especially on tourism.

Extracted in full from the Courier Mail.