Canberra fuel prices: ACT government refocuses on fuel price inquiry recommendations

The ACT government has reiterated its commitment to implementing recommendations from a fuel price inquiry as prices start to rebound from the peak of the pandemic.

Canberra prices reached a 12-month high this April, with the government reminding retailers about its powers to impose a cap if prices keep rising above the national average.

Last year, Chief Minister Andrew Barr called out petrol retailers’ alleged price gouging of Canberra motorists who were paying more than interstate drivers.

Mr Barr demanded Canberra retailers drop their prices to be at level or below the national average price, which was about $1 a litre, or the government would use its powers under the Fair Trading (Fuel Prices) Act 1993 to intervene and cap retail margins.

he threat came after a 2019 Legislative Assembly inquiry into why drivers were consistently charged more for fuel in Canberra.

Five recommendations came out of the the seven-month inquiry.

These included regular monitoring of fuel pricing and competition; proactive approaches to independent operators when considering new service stations; development of a real-time and mandatory price-monitoring scheme similar to NSW’s FuelCheck; provision of public education programs about fuel prices to motorists; and analysis of the comparative costs, taxes and rates that service station operators are paying within and outside the ACT.

On April 15, a spokeswoman for Mr Barr said retailers complied with his requirement to match the national average.

“Over the past year, the Canberra average price has consistently been around or under the national average price,” she said.

“Last week, the average petrol price in Canberra was comparable to Sydney, 21 cents a litre cheaper than in Melbourne, 12 cents a litre cheaper than Brisbane and four cents a litre under the national average.”

The spokeswoman said the adopted recommendations were still being implemented.

“The Chief Minister has also made it clear to the major retailers that the government reserves the right to impose a margin cap at any time if the Canberra retail price trends significantly above the national average.”

The spokeswoman said the government had also implemented other measures that are saving motorists and households money, including reforms to the Compulsory Third Party Scheme and the abolition of insurance duties.

The petroleum industry has criticised the government’s stance, particularly with capping prices, as being unfeasible and urged for more productive relationships with retailers rather than resorting to threats.

Mark McKenzie, CEO of Australasian Convenience and Petroleum Marketers Association, said it was “nonsensical” to suggest that any state or territory government could fix an arbitrary price cap “in a market where 85 per cent of the retail price is dictated by federal government taxes and the price of international supply”.

“The wholesale price of petrol is about 125 cents a litre compared with 86 cents a litre in April last year. That is why fuel prices are rising,” Mr McKenzie said.

“It is worth noting that on any given day, the fuel price in Canberra differs by up to 20 cents per litre – largely reflective of the different cost models used by different fuel retailers.”

Mr McKenzie said Canberra’s petrol prices were relatively steady and did not fluctuate the way they did in the bigger capital cities.

“This means that the validity of the comparisons can be dramatically distorted if comparing Canberra prices with other capital cities,” he said.

Similarly, NRMA head of media Peter Khoury said it was “always risky” comparing Canberra with other cities because the former did not have a price cycle.

Mr Khoury said rather than enforcing a cap, the ACT government should provide real-time data for motorists instead.

The latest data by the Australian Institute of Petroleum shows Canberra’s average unleaded price for the week ending April 11 was 140.4 cents per litre compared with Sydney’s 139.5 cents per litre.

About this time last year, Canberra’s average was 120.8 cents per litre.

A number of retailers were contacted comment.

A BP spokesman was not drawn into the government’s position but said: “The price at the pump is impacted by a number of different factors, including international product prices and competition between service stations in a local area”.

“There are also other factors including exchange rates, taxes and local operating costs,” he said.

Extracted from The Canberra Times

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