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Bloomberg: Australia to Name Gasoline Competition Commissioner (Update1)

By Angela Macdonald-Smith

Dec. 18 (Bloomberg) — The Australian government will appoint a commissioner to oversee competition in gasoline retailing after a report by the antitrust regulator found the nation’s four refiners operate in “a comfortable oligopoly.”

The search for a Petrol Commissioner has started and the government intends to make an announcement “in the near future,” Chris Bowen, minister for competition policy and consumer affairs, said today in an e-mailed statement. The government will also give the national competition regulator formal monitoring powers over retail gasoline prices, he said.

Caltex Australia Ltd. and the Australian units of BP Plc, Royal Dutch Shell Plc and Exxon Mobil Corp. operate refineries and service stations in Australia. While the Australian Competition and Consumer Commission’s report found “no obvious evidence” of price fixing, it said “well-defined price cycles” in unleaded gasoline retail markets are “an enigma.”

Retail prices of unleaded gasoline could be cut by a few cents a liter if some of the issues identified in the inquiry are addressed, Bowen said in the statement, citing the regulator’s report.

The government will also require the competition regulator to report back each year on its monitoring of prices, Bowen said.

Discount Ventures

Caltex and Shell are among companies that have linked with supermarket chains in discount fuel ventures. Caltex tied up with Woolworths Ltd. and Shell has a venture with Coles Group Ltd. The competition regulator, known as the ACCC, found that discount fuel ventures haven’t had an anti-competitive effect on the retail gasoline market.

The regulator said there were impediments to the large- scale importing of gasoline by an independent company, which it said would be “the most significant” potential competitive threat to Australian refiners. To reduce impediments to competition in the wholesale gasoline market it recommended that federal and state governments seek to align fuel standards with overseas standards, and that an audit be carried out of terminals suitable for importing gasoline into Australia.

Caltex Australia, half-owned by Chevron Corp., and Woolworths, Australia’s biggest retailer, said in separate e- mailed statements they welcomed the regulator’s findings.

The company supports “any ongoing monitoring and will fully co-operate with the ACCC and the new Petrol Commissioner,” Andrew Hall, director of corporate affairs at Sydney-based Woolworths, said in the statement.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at [email protected]

Last Updated: December 18, 2007 01:43 EST

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