Providing fuel subsidies for low-income families, quarantining prime real estate for service stations and reviewing rates charges for operators are being examined as possible ways to address Canberra’s high petrol prices.
The ACT Assembly’s select committee examining Canberra’s fuel prices has handed down its interim report, which includes nine preliminary recommendations.
In the report, the committee’s chair, Tara Cheyne, said it was “clear” the market was not meeting “customers expectations”, while warning any market intervention should be viewed as a “last resort”.
Annual average fuel prices were found to be have been between 5.2 and 7.1 cents per litre more expensive in Canberra than Australia’s five largest cities in the past three years, according to Australian Competition and Consumer Commission figures referenced in the interim report.
The rate at which falls in crude oil prices translated into lower retail prices was also found to be much slower in Canberra than other cities.
The interim report considered a number of characteristics of the Canberra market, which might be contributing to the high fuel prices.
These included a lack of small independent outlets, the high cost of transporting fuel to Canberra and a relative “scarcity” of available land to develop new service stations.
The report puts forward nine preliminary recommendations, which range from “doing nothing” to launching drastic government interventions into the market.
The committee suggested the ACT government could provide fuel subsidies to low-income earners to help ease the financial burden.
However, that proposal would not reduce prices overall as it would provide no incentive for companies to supply cheaper petrol.
The committee said the government could also consider allocating “highly visible” land across the ACT for new petrol stations.
That would allow consumers to “eyeball” prices more easily, helping to improve transparency. The committee said it could be “timely” to review rates and charges for service station operators amid concerns about the high cost of doing business in the ACT.
The introduction of a maximum retail margin for fuel companies was put forward as a possible recommendation in the final report, as was the establishment of an oversight body to monitor prices.
Introducing a real-time price monitoring scheme, better consumer education and forcing companies to lock in prices for 24 hours were also suggested in the interim report.
The committee is seeking further public feedback until July 30.
Extracted from The Canberra Times