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The Daily Telegraph (Australia): Petrol firms forced to explain prices

By Heath Aston
January 29, 2008 03:00am

THE bosses of Australia’s big four oil companies will this week be forced to explain why they have failed to pass on falling international petrol prices to local motorists in 2008.

Australian Competition and Consumer Commission chairman Graeme Samuel yesterday renewed his demand for crisis meetings with the chiefs of Caltex, Shell, BP and Mobil.

The Daily Telegraph revealed last week that Mr Samuel had finally “lost patience” with the refiners, accusing them of undermining the national economy and threatening to push interest rates even higher.

As the price of unleaded remained close to 140c a litre in Sydney yesterday, Mr Samuel stepped up his attack by calling the petrol giants opportunistic and disingenuous.

The ACCC boss was responding to reports Caltex and Shell had blamed refinery breakdowns for sustained high prices over the long weekend.

The Singapore benchmark price – which the local industry uses to justify price rises – indicates that Sydney motorists should be paying about 130c a litre on average.

“We’ve had two divergences from the Singapore benchmark within six weeks and they’re saying that it’s all to do with refinery problems,” Mr Samuel said.

“They are now introducing a domestic excuse to the process. That’s not reasonable, it’s an excuse for keeping prices high and not following the Singapore benchmark. It doesn’t ring true.”

Mr Samuel wants meetings with refinery bosses, challenging them to assure consumers they are getting value for money.

Last year’s ACCC petrol price inquiry found no evidence of price fixing but noted extensive “price sharing” by an industry it described as a “comfortable oligopoly”.

“It wouldn’t be a good look for oil companies to refuse to come and see me – they shouldn’t have anything to hide,” Mr Samuel said.

“It’s not intended to be a haranguing session, it’s intended to be a constructive session with them to see whether they can put something to us to avoid this happening in future.”

Shell and Caltex did not return calls yesterday but a spokesman for BP chairman Gerry Hueston expressed his willingness to front the ACCC.

“We’re more than willing to meet with Mr Samuel, in fact we requested a meeting with him before Christmas to discuss these type of issues,” BP spokesman Chandran Vigneswaran said.

“From BP’s perspective our prices have come down over the past week in line with international prices so we dispute these allegations of price gouging.”

Competition Minister Chris Bowen has urged the ACCC to use its new powers to ensure maximum transparency in the multi-billion dollar fuel market.

http://www.news.com.au/story/0,23599,23122956-421,00.html

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