The Australasian Convenience and Petroleum Marketers Association (ACAPMA) has acknowledged the Victorian Government’s proposal to explore measures aimed at increasing fuel price transparency. While supporting efforts to provide consumers with better access to price information, ACAPMA has cautioned that any new measures must carefully balance consumer benefits with maintaining robust competition in the fuel market.
ACAPMA CEO Mark McKenzie expressed support for improving transparency while highlighting the need to safeguard competition.
“Where price transparency laws are properly considered and implemented, they work well in making it easier for consumers to find the cheapest fuel prices in their local area by making fuel price discounters more visible in the market”, said ACAPMA CEO Mark McKenzie.
“But where they are poorly implemented, these government interventions in an openly competitive market risk unintended adverse consequences that could actually increase average fuel prices in metropolitan areas”, said ACAPMA CEO Mark McKenzie.
“Providing consumers with timely access to accurate fuel price information is a goal we strongly support. However, it’s equally important to ensure that any measures introduced do not inadvertently reduce competition in the fuel market, which could drive up average fuel prices,” said Mr. McKenzie.
Mr. McKenzie explained that while the real-time fuel price reporting model has proven effective in most Australian states, the Western Australian “FuelWatch” model has been developed for the unique characteristics of the Perth market. The nature of competition in capital city markets varies widely and therefore it is essential that this second measure is examined carefully before it is implemented.
“Locking in prices for 24-hour periods limits the ability of the aggressive fuel discounters to further discount their prices if they discover that they are similar to that of their competitors, which means that they may well adopt more conservative pricing strategies”, Mr McKenzie said (See Footnote below)
“While the ‘FuelWatch’ model may offer price certainty and make the fuel cycle more predictable, it also risks suppressing competitive pricing dynamics and inadvertently pushing up average fuel prices across the market.”
ACAPMA emphasized that any new measures must balance the priorities of enhancing consumer access to competitive fuel prices while preserving the operational flexibility of businesses that supports healthy competition.
“We look forward to collaborating with the Victorian Government to develop measures that empower consumers without compromising the competitive dynamics that help keep fuel prices affordable,” Mr. McKenzie said.
IMPORTANT FOOTNOTE:
ACAPMA had originally understood that the Victorian Government’s Fair Fuel Plan ‘locked in fuel prices for 24hours’ as occurs in WA based on verbal advice received from the Victorian Government immediately prior to the announcement.
This understanding was later corrected given the Official Press Release, which advised that fuel retailers would be able to discount their ‘locked in’ prices but not increase them. ACAPMA’s public comment was subsequently revised but continued to emphasize competition risks.
This clarification challenges the notion advanced by the Victorian Government that the proposed action would eliminate daily price variability, where motorists often get ‘caught out’ driving past servos displaying low prices in the morning only to find that prices rose sharply in the afternoon. It merely means that start of day prices (notified the day earlier) will likely be higher than the end of the day prices (after discounting during the day) – instead of the other way around.
ACAPMA
