Chief Minister Andrew Barr has ruled out his government implementing a public fuel price monitoring scheme or 24-hour lock-in prices in the ACT.

In a letter to a Legislative Assembly inquiry investigating the issue, Mr Barr also warned of a potential risk public price monitoring could lead to collusive behaviour by retailers.

 Chief Minister Andrew Barr has ruled out pursuing a fuel price watchdog in the ACT.

His letter means the Labor government is unlikely to implement price monitoring – which the Liberal opposition has promised if elected in 2020 – or 24-hour lock-in prices, similar to a system operating in Western Australia.

It comes despite widespread consumer support for a fuel price monitoring system in the ACT, with several states including NSW already running such a system.

Mr Barr cited several concerns about the proposal, including its potential impact on the retail fuel market, the cost of government running it, and the role of existing commercial monitoring applications.

“Without pre-empting the committee’s findings, the ACT government is cautious about any proposal to introduce regulatory price-lock mechanisms or mandatory price reporting,” his letter reads.

Mr Barr wrote that while such mechanisms were operating in WA, NSW and the Northern Territory, such intervention could be counterproductive in the ACT, given its weak retail competition. He also raised concerns it would lead to “reduced market participation or tacit collusion” by some fuel retailers, which would have adverse effects on competition and consumers.

The concern in part stems from the greater market power of the supermarket giants Coles and Woolworths, which own or operate about 60 per cent of the territory’s 58 service stations.

Mr Barr cited Griffith University research into mandatory price disclosure regimes – or fuel price watchdogs – in other jurisdictions which he said showed they were not effective at lowering prices in markets with less competition.

The Chief Minister also repeated his comments that he believed current independent, private fuel price monitoring websites and applications, such as Petrol Spy and Motor Mouth, were sufficient.

While he supported such private operators of monitoring schemes, Mr Barr argued that if the territory government was to duplicate such a service it would be administratively costly and of “marginal” benefit to consumers.

His letter also backed the Australian Competition and Consumer Commission’s findings that 24-hour price locks, where retailers must not change their prices in a 24-hour period.

It could also limit their ability to cut prices to drive more sales, increasing competition.

Extracted from Canberra Times