Bloomberg: Shell, BP Apologize for Gasoline Shortages in Sydney (Update1)

By Angela Macdonald-Smith

March 23 (Bloomberg) — Royal Dutch Shell Plc and BP Plc, two of Australia’s four crude-oil refiners, apologized in Sunday newspapers for shortages of gasoline in the Sydney region amid accusations of unwarranted price increases.

Shell’s V-Power, 95-octane unleaded and premium unleaded gasoline have been unavailable “for some weeks” in New South Wales because of the shutdown of a refinery unit, the company said today in the Sun-Herald. BP cited production issues at local refineries and constraints on imports for an “unprecedented level” of fuel supply shortages.

Shell said in January it halted its catalytic cracking unit at the Clyde refinery in Sydney after “erratic” performance, bringing forward a shutdown for maintenance. The NRMA motoring organization said it is monitoring prices and reporting price discrepancies to the national competition regulator.

“I want to reassure you that everyone at Shell is working hard to restore refinery supplies to normal and to minimize the impact of this supply disruption,” Russell Caplan, chairman of Shell in Australia, said in a “message to customers” published in the Sun-Herald.

Sydney’s average retail price today is A$1.436 ($1.29) a liter, 4 cents higher than the “suggested fair price,” NRMA said on its Web site. The group said March 11 it will publish a daily “fair price,” using factors including the Singapore refined price, the exchange rate and shipping charges.

Any discrepancy will be reported to the Australian Competition and Consumer Commission, or ACCC, until the government’s recently appointed Petrol Commissioner Pat Walker takes up his role, NRMA said.

Price Gouging

Increases in pump prices across the country in the lead-up to Easter were “broadly in line with the types of rises we see every week,” Chris Bowen, minister for competition policy and consumer affairs, said on Channel Nine Networks’ Sunday program, citing Graeme Samuel, chairman of the competition regulator.

“The ACCC has been very active in the lead-up to Easter to ensure that there is no price gouging, ensure there is no anti- competitive conduct,” Bowen said.

NRMA disagrees. Prices reached as much as A$1.50 a liter at the start of the Easter holiday weekend and traded within a wider weekly range than usual, indicating oil companies were taking advantage of motorists, NRMA President Alan Evans told Sky News today.

New South Wales Minister for Fair Trading Linda Burney said March 20 investigators are monitoring prices and availability through the Easter holiday weekend. The investigators have the power to open up tanks to verify fuel companies’ claims that they are empty, she said in an e-mailed statement.

Tuesday Shortages

Burney said she has been seeking answers since the start of the month as to why there are shortages of premium gasoline on Tuesdays, when retail prices are discounted nationwide. Four hundred people have contacted Fair Trading regarding supply problems, she said.

“We expect that your premium fuel of choice will become more readily available over the coming weeks,” BP said in advertisements placed in the Sun-Herald and the Sunday Telegraph.

Caltex Australia Ltd., the nation’s biggest refiner, said it had unplanned shutdowns at both its plants. The refiner, 50 percent owned by Chevron Corp., said Feb. 22 the shutdown of a diesel unit at the Kurnell refinery in Sydney for maintenance was due to end by Easter.

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

Last Updated: March 22, 2008 23:39 EDT

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