The Barr government’s decision to commission a Legislative Assembly inquiry into why Canberrans pay more for petrol than people across the country is welcome and overdue.

Its real value is going to depend on whether or not this is an attempt to draw the teeth of the ACT Opposition’s pledge to introduce a Western Australian style fuel watch scheme in the event it is elected in 2020, or a serious attempt to come to terms with the issue.

The ACT Liberals committed to the fuel watch scheme last month after a series of reports by the Canberra Times  on the price gouging that has been a feature of life here for decades.

Those reports noted fuel prices at one and two bowser service stations within 40 and 50 minutes drive of the ACT were often 15 to 20 cents a litre cheaper than in most Canberra outlets.Advertisement

This would seem to give the lie to suggestions transport costs and a lack of competition are what keeps our fuel prices high.

The Legislative Assembly inquiry, due to report by the end of June, is one of two serious attempts to explain the ongoing discrepancy. The ACT’s Independent Competition and Regulatory Commission is also looking into the factors affecting petrol pricing in the ACT.

While the pricing issue is a complex minefield influenced by a multitude of national and international factors, it is hard to fathom why Canberra’s pump prices are consistently out of step with those elsewhere.

Mr Barr is spot on when he says the market has failed to deliver competitive fuel pricing for Canberrans and that suppliers were yet to put forward credible reasons to explain this.

According to MotorMouth, a price comparison web site, the average price of unleaded petrol in the ACT has been higher than the prices in Australia’s other capital cities for at least 60 days.

Is it the case, as numerous letter writers to the Canberra Times have claimed, that the major retailers are simply charging what they believe the market will bear?

The so-called “Canberra tax” is a widespread phenomenon.

It is based on the knowledge the bush capital has the highest average wages and salaries in the country and is usually justified on the basis “they can afford it”.

That line of reasoning is wrong on many levels.

It would seem wise for both inquiries to avoid getting bogged down in “the big picture” and instead take note of the fact some sites in the ACT are able to sell petrol for significantly less than others.

Costco, admittedly a membership driven operation, and several independents, routinely come in well under the prevailing price.

While it will be important for the inquiry to ask dearer retailers why their prices are so high, it is even more important to ask the discounters how they can supply the same product for so much less. It is also worth asking those in small towns just over the border how and why their prices are lower than many of the ACT’s.

Is a price watch scheme, using the same price-freezing approach that has worked so well in the west, the answer or are there other factors at play?

Let’s hope the two new inquiries will be able to give us the answers we need. This has gone on for far too long.

Extracted from Canberra Times