Canberra Times (Australasia): Petrol prices anger motor lobby

Published: Jan 17, 2007

Motorist lobby groups say they will ”kick up a fuss” if the Canberra unleaded petrol price has not fallen to $1.10c a litre by Friday. They backed national competition watchdog Graeme Samuel yesterday after he threatened to shame oil companies into cutting fuel prices.

Mr Samuel, chairman of the Australian Competition and Consumer Commission, said oil companies had 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 5c.

Canberra’s petrol price dropped modestly to $1.17c a litre yesterday but lobby groups said it was still at least 7c too high.

Australian Automobile Association research manager Greg Smith, who welcomed Mr Samuel’s tough stance on fuel prices, said Canberrans should be paying about $1.10c a litre. ”It’s starting to look a little dodgy,” Mr Smith said. ”[Oil companies] are happy to hold on to the higher prices if no one’s looking.” NRMA national president Alan Evans said Canberra petrol prices were ”absolutely” too high and $1.07c would be a fair price. If the price had not dropped significantly by Friday, motorists were being dudded, he said.

However, Mr Evans was confident pressure from the ACCC and consumers would see prices drop by then.

Oil companies tried yesterday to distance themselves from Mr Samuel’s comments, suggesting service stations were to blame for not passing on savings to motorists.

Fuel giants Shell and Caltex launched a staunch defence of their roles in determining the cost of petrol, saying prices paid by motorists were set at arm’s length from them.

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

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

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

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 says the prices at Woolworths-branded service stations are set by Australian Independent Retailers, not by Caltex.

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

”Petrol prices are at realistic levels and are falling at an appropriate speed in line with world oil prices,” Mr James said.

He said petrol stations had to first sell the petrol bought at higher prices and still in their tanks before they could buy cheaper petrol and pass on the discount.

Deakin University competition law expert Professor Philip Clarke said the ACCC would 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,” Professor Clarkesaid.

According to the Shell website, the cheapest petrol in Canberra yesterday was $1.15c at Curtin, Phillip and Tuggeranong. The most expensive petrol was $1.18c at Fyshwick. with AAP

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