Consumers May Benefit from the Introduction of a National Petrol Price Cycle

Australian motorists have suffered from unfair retail petrol prices for far too long at the hands of oil companies. These prices have been outside the control of petrol retailers as they do not set them.

The Motor Trades Association of Australia (MTAA) has repeatedly urged the Australian Government to intervene in the structure of the wholesale and retail petroleum markets to ensure the presence of effective competition and to pass on any possible savings to motorists. This has been resisted by agencies and the previous government.

Today’s announcement by the Prime Minister of the national roll-out of Fuelwatch, a retail petrol pricing regime, is thus welcomed by MTAA as a measure heading in that correct direction; even if more needs to be done.

MTAA understand that Fuelwatch has had some success in regulating the price cycle in Western Australia and has provided motorists with more equitably priced petrol. It can however, have problems for sole or “lone” service station operators who can be tactically priced against by oil companies. This will need to be carefully looked at.

If Fuelwatch proves unable to provide motorists nationwide with the benefits anticipated, however, the Government will need to take immediate further action to remedy this. That would necessarily have to be of a structural character, which addresses the present imbalances in the market.

MTAA supports any measure that will provide relief to motorists who have suffered from unfair oil company set petrol prices, but notes, and advises that many of the costs borne by motorists are the product of decisions by those oil companies at the wholesale level.


END

15 April 2008

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