Watchdog to cut prices at the bowser
Phillip Coorey Chief Political Correspondent
April 16, 2008
MOTORISTS will be spared the shock of massive spikes in petrol prices under a national scheme to force service stations to publish the cost of fuel 24 hours in advance, every day of the year.
Saying that partial price regulation would increase competition and help working families, the Prime Minister, Kevin Rudd, announced yesterday that FuelWatch, in operation in Western Australia since 2001, will operate nationwide from December 15.
Research by the Australian Competition and Consumer Commission showed petrol in Western Australia was about two cents a litre cheaper, but Mr Rudd stopped short of guaranteeing there would be a price drop nationally.
"What we want to do is ensure motorists are not paying one cent more than they have to at the bowser," he said. "What we want to do is ensure that motorists are able to buy the cheapest petrol at the cheapest prices at the cheapest petrol stations and at the cheapest times."
Motoring groups and oil companies were sharply divided over the idea with some warning that "cheap Tuesdays" would disappear and oil profits would soar.
Under the scheme, every oil company or service station would have to notify the ACCC at 2pm each day of the fixed price of petrol for the next 24 hours.
At 3pm, the information would be published on a website, made available on a toll-free number, or sent to motorists via email or text message, enabling them to seek the nearest service station selling at the best price.
Penalties, possibly heavy fines which are used in Western Australia, would be levied on any service station which adjusted its price during each 24-hour period.
The NRMA applauded the move while one supplier claimed oil companies would make more money because it would signal the end of cheap Tuesdays.
The petrol company spokesman, who did not want to be identified, said 70 per cent of Sydney motorists filled up on Tuesdays when petrol was heavily discounted. Under FuelWatch, the price of petrol would be more even across the cycle and cheap Tuesday's would disappear.
He said the scheme was "an easy political fix" designed to spare the Government having to continually deal with anger over wildly fluctuating fuel prices.
Motorists' groups in Queensland and South Australia also expressed concern about the loss of cheap Tuesday but the NRMA's Alan Evans dismissed these concerns as "absolute nonsense".
Mr Evans, who strongly lobbied for the adoption of FuelWatch nationally, said oil companies would say and do anything to avoid regulation of the price cycle.
The Federal Opposition said the scheme meant nothing unless prices fell and those who bought fuel on cheap Tuesday would be worse off. The State Opposition welcomed the announcement.
The Service Station Association urged the Government to consider the details carefully because independent operators risked being run out of business if they set their prices too high.
The association's Ron Bowden cited a Perth operator who set his price the day before three cents higher than his competitors' price. He dropped the price to attract business and was fined $800,000. "The small bloke every day has got to make a decision and you can't make the right decision every day," Mr Bowden said.
The Competition Policy and Consumer Affairs Minister, Chris Bowen, said there would be a lot of criticism by retailers but the scheme "puts consumers on a level playing field with retailers".
"The ACCC certainly found there was no basis for any conclusion that this will put upward pressure on petrol prices," he said.
The scheme will apply to unleaded petrol, premium unleaded blends, diesel, LPG, 98RON and biodiesel blends. It will be run by the ACCC's petrol commissioner, Pat Walker, who ran the West Australian program.
Phillip Coorey Chief Political Correspondent
April 16, 2008
MOTORISTS will be spared the shock of massive spikes in petrol prices under a national scheme to force service stations to publish the cost of fuel 24 hours in advance, every day of the year.
Saying that partial price regulation would increase competition and help working families, the Prime Minister, Kevin Rudd, announced yesterday that FuelWatch, in operation in Western Australia since 2001, will operate nationwide from December 15.
Research by the Australian Competition and Consumer Commission showed petrol in Western Australia was about two cents a litre cheaper, but Mr Rudd stopped short of guaranteeing there would be a price drop nationally.
"What we want to do is ensure motorists are not paying one cent more than they have to at the bowser," he said. "What we want to do is ensure that motorists are able to buy the cheapest petrol at the cheapest prices at the cheapest petrol stations and at the cheapest times."
Motoring groups and oil companies were sharply divided over the idea with some warning that "cheap Tuesdays" would disappear and oil profits would soar.
Under the scheme, every oil company or service station would have to notify the ACCC at 2pm each day of the fixed price of petrol for the next 24 hours.
At 3pm, the information would be published on a website, made available on a toll-free number, or sent to motorists via email or text message, enabling them to seek the nearest service station selling at the best price.
Penalties, possibly heavy fines which are used in Western Australia, would be levied on any service station which adjusted its price during each 24-hour period.
The NRMA applauded the move while one supplier claimed oil companies would make more money because it would signal the end of cheap Tuesdays.
The petrol company spokesman, who did not want to be identified, said 70 per cent of Sydney motorists filled up on Tuesdays when petrol was heavily discounted. Under FuelWatch, the price of petrol would be more even across the cycle and cheap Tuesday's would disappear.
He said the scheme was "an easy political fix" designed to spare the Government having to continually deal with anger over wildly fluctuating fuel prices.
Motorists' groups in Queensland and South Australia also expressed concern about the loss of cheap Tuesday but the NRMA's Alan Evans dismissed these concerns as "absolute nonsense".
Mr Evans, who strongly lobbied for the adoption of FuelWatch nationally, said oil companies would say and do anything to avoid regulation of the price cycle.
The Federal Opposition said the scheme meant nothing unless prices fell and those who bought fuel on cheap Tuesday would be worse off. The State Opposition welcomed the announcement.
The Service Station Association urged the Government to consider the details carefully because independent operators risked being run out of business if they set their prices too high.
The association's Ron Bowden cited a Perth operator who set his price the day before three cents higher than his competitors' price. He dropped the price to attract business and was fined $800,000. "The small bloke every day has got to make a decision and you can't make the right decision every day," Mr Bowden said.
The Competition Policy and Consumer Affairs Minister, Chris Bowen, said there would be a lot of criticism by retailers but the scheme "puts consumers on a level playing field with retailers".
"The ACCC certainly found there was no basis for any conclusion that this will put upward pressure on petrol prices," he said.
The scheme will apply to unleaded petrol, premium unleaded blends, diesel, LPG, 98RON and biodiesel blends. It will be run by the ACCC's petrol commissioner, Pat Walker, who ran the West Australian program.
