News.com.au: Shell, Caltex defend petrol price roleBy Peter Veness

January 16, 2007 06:21pm

OIL companies today tried to distance themselves from the price of petrol at the bowser, suggesting service stations are to blame for not passing on savings to motorists.

Fuel giants Shell and Caltex today launched a staunch defence of their roles in determining the cost of petrol after competition watchdog Graeme Samuel threatened to shame them into cutting fuel prices.

Mr Samuel, chairman of the Australian Competition and Consumer Commission, said oil companies have not matched falling world crude prices, which have dropped 25 per cent since August.

He threatened to begin publicly shaming oil companies within a week unless petrol prices drop by at least five cents.

But Caltex and Shell said today prices paid by motorists are set at arms length from them.

Any decision to cut pump prices are made by individual service stations, they said.

Service Stations Association spokesman Colin Long said the claim is rubbish.

“Caltex and Shell, in conjunction with the supermarkets (Coles and Woolworths), control 60 per cent of the market,” Mr Long said.

New South Wales’ peak motoring group, the NRMA, says oil companies should be ashamed of the price motorists are paying for fuel.

“Any oil company executive who says that the price of petrol at the pump today is a fair price should be really absolutely embarrassed,” NRMA president Alan Evans said on ABC radio.

But Shell insists the idea that it controls petrol prices is wrong.

“Coles are a different company to Shell,” a Shell spokesman said.

“We continue to reflect (oil) prices (and) our wholesale cost is publicly available for all to see.”

According to its website, Caltex said the prices at Woolworth-branded service stations are set by Australian Independent Retailers according to directions from Woolworths.

“(There is) absolutely no involvement from Caltex,” the company said.

“At all other Caltex and Ampol sites the pump price is the legal responsibility of the franchisee or independent operator.”

Caltex spokeswoman Jenny Palmer said service stations played a role at the retail level in helping to ensure Australia’s petrol prices were among the lowest in the developed world.

The petrol industry found an ally in Commsec’s chief equities economist Craig James, who believes claims of profiteering are unjust.

“The Australian Competition and Consumer Commission is incorrect in its criticism of fuel retailers,” Mr James said.

“Petrol prices are at realistic levels and are falling at an appropriate speed in line with world oil prices.”

Mr James said petrol stations have to first sell the petrol bought at higher prices and still in their tanks before they can buy cheaper petrol and pass on the discount.

“The ACCC is getting the wrong advice if it believes that petrol prices in Australia should be 10 cents a litre lower than they are currently.”

Mr Samuel said he would begin asking tougher questions unless the price falls by next week.

But Deakin University competition law expert Professor Philip Clarke says the ACCC will find it hard to take action against the oil companies.

“If the allegation is the petrol retailers have been engaged in price fixing, it can be quite difficult to prove,” Prof Clarke said.

In Australia’s major capitals the Australian Automobile Association said the average petrol price was 114.3 cents a litre today – down sharply from record highs in August but still a major impost for many Australia families.

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