Chief Minister Andrew Barr is vowing to keep the spotlight on major petrol retailers, as a new report shows Canberra’s fuel prices have fallen closer into line with those in Sydney amid the glare of heightened public and media scrutiny.
Mr Barr will use the release of the Independent Competition and Regulatory Commission’s final report into ACT petrol prices to ramp up pressure on fuel retailers, saying Canberrans are still being “ripped off at the bowser”.
The commission’s final report reaffirms many of its interim findings, again showing Canberra’s fuel market is dominated by a handful of major players whose outlets generate higher profits than sites around the region and interstate.
A range of factors, including a lack of smaller independent outlets which “aggressively discount” and the high cost of transporting fuel, were found to contribute to Canberra having higher average monthly petrol prices than the five largest capital cities.
The location of many of Canberra’s petrol stations off main roads made it difficult for motorists to easily compare prices, which affected competition, the report found.
The report showed Canberra’s petrol prices have been on average 11.8 cents per litre more expensive than Sydney’s in 2018-19.
However, that difference shrunk to just 0.6 cents per litre in May.
The gap between prices in Canberra and surrounding regional towns has also contracted to 0.4 cents per litre, down from an average of 1.7 cents per litre since 2012-13.
Mr Barr attributed that to the heightened scrutiny on Canberra’s petrol market, which was kickstarted by a campaign in The Sunday Canberra Times earlier this year.
The series of stories, which showed Canberra motorists were being gouged at the bowser, prompted Mr Barr to establish an ACT Assembly committee to inquire into the issue.
He also ordered the territory’s competition watchdog to conduct its own analysis of the ACT’s fuel prices, and the factors contributing to them.
“It appears the scrutiny of the ICRC and the extraordinary powers it holds to compel companies to hand over financial records has made a difference to the prices being charged to Canberra motorists,” Mr Barr said.
“We need to ensure this continues and providers don’t unjustifiably hike their prices.”
The assembly select committee tabled an interim report in May, which flagged a series of dramatic proposals, including providing fuel subsidies for low-income families and quarantining prime real estate for new service stations. The committee is due to hand down its final report later in the year.
In the meantime, Mr Barr said the cross-party committee should consider establishing a permanent standing committee, which, like the independent watchdog, would have the power to compel fuel companies to hand over their financial accounts.
Mr Barr has previously threatened government intervention to bring down fuel prices, although he’s unlikely to commit to any action until the select committee deliver its recommendations.
The watchdog’s 150-page report found the ACT had the smallest proportion of independent retailers of any market in the nation, with the four major brands – Coles Express/Shell, Caltex, Caltex/Woolworths and BP – accounting for more than 75 per cent of the territory’s 58 outlets.
Canberra’s outlets were also found to be more profitable than sites interstate. In 2016-17, the annual average net profit for service stations in the ACT was $670,000, compared to $400,000 in the rest of the country.
In evidence to the select committee inquiry, fuel groups blamed high overheads, greater transport costs and a relative of scarcity of retailers for the ACT’s high fuel prices.
Extracted from Canberra Times