The ACT government has placed no restrictions on the select committee that will look into Canberra’s petrol prices, leaving it free to investigate a range of solutions including whether certain sites could be reserved for independent operators in order to introduce more competition.
The Independent Competition and Regulatory Commission will conduct an analysis of fuel price factors and market competition alongside the Assembly probe.
Asked whether the inquiry would investigate the possibility of legislating that a percentage of petrol stations in the ACT must be independent, or making future petrol station sites available only to independents, a spokeswoman for Chief Minister Andrew Barr said the committee was expected to explore those ideas.Advertisement
“Variations of these ideas have been tried in the past with mixed success,” the spokeswoman said.
“Back in the 1990s sites were released to independent operators, but over the subsequent decades they either closed or were bought out by bigger players.
“The government has placed no restrictions on the committee deliberations and it is anticipated that the role of independent providers in the market will be investigated as part of this process.”
During the week, Mr Barr threatened an unprecedented intervention in the price of fuel in the ACT, refusing to rule out setting a maximum price or retail margin for service stations.
ACT government data shows there are 59 service stations operating in the ACT, with 13 of those – 22 per cent – run by independent operators.
A slightly higher percentage of independents operate nationwide, according to the latest Australian Competition and Consumer Commission data. A report by the commission said 25 per cent of fuel retailers in Australia were independents in 2016-17, with the percentage having grown every year since the commission started collecting market share data in 2002-03.
Independent retailers generally charge less for fuel than service stations operated by refiner wholesalers and supermarkets. Most of Canberra’s independent stations are near the airport and in Fyshwick, where the city’s lowest prices are usually found.
An ACT government spokeswoman said there was currently no requirement for a certain percentage of service stations to be independent, or conditions placed on new service station sites to dictate which type of operator could occupy them.
Former chief minister Jon Stanhope urged the select committee to use its inquiry to look at ways to introduce more competition into the fuel market.
His government had a policy to increase competition in the ACT’s grocery market and reduce the stranglehold of Coles and Woolworths by reserving some sites for smaller supermarket chains, including Aldi.
Mr Stanhope said petrol prices in the territory were “a disgrace”, and that greater competition could be the key to getting drivers a better deal.
“There needs to be an intervention of some sort in the ACT,” Mr Stanhope said.
“[The high petrol prices in Canberra] are disgraceful. It’s an absolute disgrace.
“I don’t think the price gouging was as bad [when I was chief minister], but I did contact the ACCC and what I do remember is my disappointment with the lack of interest from the ACCC in doing anything about the price gouging that Canberrans have suffered for decades.”
Mr Stanhope, who has often criticised the current ACT government, said he fully supported its inquiry into petrol prices.
“I think it’s long overdue,” he said.
The Assembly select committee, which will table its final report in June, is tasked with examining how fuel prices are determined in the ACT and the impact of rising fuel prices on Canberra drivers.
It will also look into regulatory and legislative solutions that could impact on fuel prices.
With no restrictions placed on the select committee, it could examine the possibility of government-regulated real-time price monitoring scheme.
Several states, including NSW, have schemes that require petrol stations to notify their prices in real-time, with the prices made available on a website that gives drivers the ability to find the best deal in their area.
Western Australia’s FuelWatch scheme takes this a step further, with prices fixed for 24 hours in a bid to increase transparency and certainty, which contribute to Perth’s predictable weekly price cycle.
The Canberra Liberals have committed to trialling a scheme modelled on FuelWatch if they are elected.
Extracted from Canberra Times