Consumer watchdog dismisses Coalition calls to break up fuel companies
Australian Competition and Consumer Commission (ACCC) Consumer watchdog dismisses Coalition calls to break up fuel companies
ACCC head Rod Sims says 85% of cost of petrol is set by international oil price and taxes
The head of Australiaâs competition regulator has shrugged off demands to lower fuel excise or break up petrol companies, arguing that consumers shopping around for cheaper petrol is the best response to high prices.
Rod Sims mad e the comments to Radio National on Wednesday, after the Liberal MP Craig Kelly called on the government to consider cutting the fuel excise by 10c a litre and the former deputy prime minister Barnaby Joyce suggested forced divestiture powers should be used against petrol companies.
Sims said that a total of 85% of the cost to consumers to fill up is due to either the international oil price â" which makes up almost 50% of the retail petrol price â" and âthe rest [of the 85%] is taxâ.
âBefore you even get to local service station, 85% of the price is explainable by things that itâs hard to do anything with,â he said.Petrol prices: Craig Kelly pushes Coalition to consider $3.5bn reduction in excise tax Read more
Sims said the best things consumers could do was shop around because they could âsave real money if they work out when to buy and where to buyâ. Prices can vary by 10c a litre for the most expensive petrol in Sydney â" at Coles â" and the cheapest, at independents, he said.
Timing a trip to the bowser at the right point in the âwretched price cycle in capital citiesâ â" as petrol stations lower prices during the week and raise them on weekends â" can also save consumers money.
Asked if retail margins were to blame for high prices, Sims said that margins are â2c higher than they should be in most citiesâ and 4c-5c higher in Brisbane.
He said consumer complaints about prices spiking from $1.30 a couple of years ago to $1.60 or $1.70 now is âclearly driven by overseas oil prices and the exchange rateâ.
âYes, I think margins are a bit too high â" because service stations rely on people not shopping around.â
Sims said he could not think of any action he could recommend to government that would be cost effective to deal with retail margins.
Asked about Kellyâs call to drop fuel excise, Sims noted that excise pays for roads and he supports quar antining revenue from excise to pay for roads.
He also rejected calls to break up petrol companies, noting that âyouâve got a whole lot of servos all over the place, I really donât think divestment will deal with the issueâ.Coalition urged to charge 10% royalty on offshore oil and gas projects Read more
On Monday, the prime minister, Scott Morrison, said the ACCC was the âcop on the beatâ designed âto make sure that all these petrol companies â¦ do the right thing by customersâ.
âThere are some things we canât control, whatâs happening with international oil prices and things like that â¦ but we can ensure that the people who are selling it here behave,â he said.
But on Tuesday Morrison said the government was taking action against electricity companies âto make sure we have the big stick to force those prices down and I expect them to respondâ and would consider measures to reduce petrol prices as well.< p>âNow I expect the fuel companies to respond too, and the government will consider any number of measures, but it is in the hands of the fuel companies to do the right thing by its customers and the ACCC and I will be watching very, very closely.â
Sims said the prime minister was right that the ACCC had powers and a dedicated petrol unit to monitor the market carefully and prosecute illegal behaviour.
He defended the ACCCâs record, noting it had already âtaken a lot of actionâ by prosecuting cases on whether shopper dockets increased the underlying price of petrol and petrol companies shared price information with each other that was not available to consumers.
âWeâre taking action pretty much all the time. I think we have saved consumers a lot of money.âTopics
- Australian Competition and Consumer Commission (ACCC)
- Australian politics
- Australian economy
- Share on Facebook
- Share on Twitter
- Share via Email
- Share on LinkedIn
- Share on Pinterest
- Share on Google+
- Share on WhatsApp
- Share on Messenger
- Reuse this content