Fuel price comparison sites have been slammed as useless with claims they will only lead to higher prices at the pump.
Consumers may be unwittingly hit in the hip pocket as fuel checking sites used to get a better deal may actually be used by major retailers to lift prices and put smaller operators out of business, lessening market competition.
NSW Shadow Minister for Innovation and Better Regulation, Yasmin Catley, hit out at fuel price websites such as the government-backed Fuel Check, stating they created an environment of collusion between major petrol providers.
“I’m concerned the Government’s fuel check program is delivering perverse outcomes – higher fuel prices rather than lower ones,” Ms Catley told Fairfax Media.
“Industry experts, and even a recent OECD report, have concluded that programs like Fuel Check actually reduces competition and puts upward pressure on prices.
“Labor has concerns, shared by others, that the state government is putting more pressure on smaller family-run petrol stations by enabling the major retailers to collude simply by using the Government’s own website,” she said.
“I’m calling on the minister [Matt Kean] to review this program to make sure it is not leading higher prices at the bowser.”
The Organisation of Economic Cooperation and Development (OECD) study found that compulsory fuel price reporting laws have not provided significant consumer benefits, instead being manipulated to reduce industry competition and lift fuel costs.
Commenting on West Australia’s government program Fuelwatch, the report said it “proved useful in promoting tacit collusion”.
The NSW Minister for Innovation and Better Regulation, Matt Kean, rejected Ms Catley’s statements as politicking.
“Kevin Rudd tried and failed to get real-time petrol prices to Australians. It is typical Labor hypocrisy to complain when a Liberal government delivers a system that works,” Mr Kean told Fairfax Media.
“The claim that FuelCheck reduces competition is completely false. FuelCheck helps consumers find the cheapest petrol and encourages petrol stations to compete on price. This is why IPART has endorsed FuelCheck.
“Publishing petrol prices has actually taken power away from big retailers on major thoroughfares, and given independent operators the chance to advertise their competitive prices to far more consumers.”
Ms Catley’s comments come as petrol prices hit two-year highs.
In the Australian Competition and Consumer Commission’s most recent quarterly petrol report, it found average petrol prices in Australia’s five largest cities leapt significantly in December last year while gross retailer margins have reached their highest levels since the ACCC began keeping records in 2002.
ACCC chairman Rod Sims said it was time Australians pushed back against high fuel prices and recommended fuel comparison sites as a way to compare prices and make informed choices.
“Motorists can fight back against these high prices by using fuel price websites and apps to shop around. Consumers can save significantly by timing their purchases during the price cycle, which encourages retailers to be more competitive,” Mr Sims said.
He told Fairfax Media consumers are better off and markets work more effectively if people are well informed.
“The introduction of real-time price data apps has given consumers access to pricing information that used to only be shared between retailers. We believe this information empowers consumers to search for lower prices, which in turn rewards lower-priced retailers and drives stronger competition and lower prices in the market.”
Fuel data company Fueltrac general manager Geoff Trotter said there was no need for government-backed fuel price check sites when there was already a number of private groups offering the same services.
“There’s no empirical evidence they deliver any benefit,” Mr Trotter told Fairfax Media.
He said the government-backed sites offered the same information as privately run fuel price checkers such as MotorMouth or Compare the Market Fuel but without the cost to the taxpayer.
“The only way to deliver lower prices is through ensuring the market is more competitive,” Mr Trotter said.
Extracted from SMH.