The Australasian Convenience Petroleum Marketers Association is rejecting claims by a senator that NSW fuel retailers are price-gouging, pointing to the costs of extra regulations in that state.
The peak industry body representing fuel retailers in Australia suggests that recent media reports comparing fuel prices in Sydney and Melbourne demonstrate a poor knowledge of the way the retail-fuel market operates in Australia
‘Senator Dastyari’s claims today about the normal petrol-price cycle demonstrate a lack of understanding of the retail-fuel market in Australia – and a failure to appreciate the costs imposed on fuel retailers by ever-increasing regulation on the way our industry operates,’ said Mark McKenzie, CEO of the Australasian Convenience Petroleum Marketers Association (ACAPMA).
‘We openly acknowledge that the retail fuel price cycle works on the basis of a sharp increase in prices followed by a slow decline in prices as individual retailers seek to slightly better the prices offered by their competitors,’ said McKenzie.
‘But this game of downward price ‘leap frog’ is a natural manifestation of competition in the retail fuel market – and one that is both openly acknowledged by our industry and regularly monitored by the Australian Competition and Consumer Commission (ACCC),’ he added.
In looking for explanations as to why retail fuel prices are higher in NSW than other states, consideration should be given to the fact that the costs of selling fuel in NSW are steadily increasing as a result of the progressive imposition of new regulations on the retail fuel industry.
The new regulations are peculiar to NSW and include the mandated sale of ethanol-blended petrol and a requirement for all service stations to install additional equipment to capture fuel vapours.
‘These regulations have increased capital and recurrent costs for fuel retailers in NSW in recent years and further increases are likely to occur as a result of foreshadowed changes to both regulations over the next 12 months,’ McKenzie said.
‘The Government is happy to point the finger at our industry but these two pieces of legislation alone mean that the infrastructure costs of selling fuel in this state are higher than any other Australian State or Territory.’
‘The impact of these costs on retail fuel prices in NSW is real and has been consistently acknowledged by the ACCC in past reports – i.e. ACCC 2012 and 2014 Monitoring of the Australian Petroleum Industry Reports,’ said McKenzie, ‘but this element is often conveniently overlooked by politicians when the community raises concerns about petrol prices.’
McKenzie concluded, ’all Governments need to recognise that, while there may be good reason to regulate markets such as ours, such regulation comes at a cost to operators – and these costs are ultimately passed through to consumers.’
