Consumers Pay too Much for Petrol

MTAA welcomes the Report of the Australian Competition and Consumer Commission’s (the Commission) Inquiry into the Price of Unleaded Petrol and its finding that some competition exists at the retail level. However, of great interest and relevance for MTAA is that the Report has concluded that competition at the wholesale level is not wholly effective. So we have said for years, in every one of our submissions to Government and the Commission.

MTAA has long advocated the need for transparency and access to purchase fuel in the wholesale petroleum market if the benefits of effective competition are to be provided to consumers; competition at retail beyond this is not enough! MTAA thus notes the Commission’s finding that while competition exists in the wholesale petrol market, it is not in an effective state.

MTAA is satisfied that the Commission has now confirmed the existence of an oligopoly at the wholesale level, and reminds that it has, over many years, made numerous representations to the Commission that this was the case; and that action on account of it was necessary.

If the Commission has identified that more effective competition at the wholesale level could result in benefits to motorists, then this saving should be passed on immediately as it ought to have been in the past. The announcement that the Commission would be formally charged with price monitoring is positive, belated and confirmation as we have long said, that, that responsibility should never have been removed from it. However, MTAA wonders what benefits will come from this if annual reporting on this is the only thing that will result.
MTAA calls on the Commission to complete its audits of terminals suitable for importing refined petrol into Australia and to monitor their use and arrangements relating to the lease and sharing of the terminals as the feature of the market most likely to quickly produce necessary competition in supply and thus prices.


END

18 December 2007

For further information please contact Michael Delaney, Executive Director of MTAA on
(02) 6273 4333.