ACCC announces petrol price findings

Australia's pricing and industrial competition watchdog has submitted a report concerning petrol pricing in Australia to the Federal Government.

The Australian Competition and Consumer Commission ('ACCC') has submitted the body's report on unleaded petrol pricing in Australia to Chris Bowen, newly appointed Minister for Competition Policy and Consumer Affairs.

Other than some isolated instances of price fixing at a retail level, the ACCC has not found evidence of wide-spread price fixing. Nor has the ACCC determined Australia's four 'refiner-marketers' have colluded on petrol pricing.

However, the study -- carried out over a six-month period -- concludes that there are "significant barriers" to companies other than the four major refiner-marketers gaining entry to the Australian market.

These four -- Shell, Mobil, Caltex and BP -- have concentrated within their control 98 per cent of the wholesale petroleum industry in Australia.

Unsettling as that may sound, the ACCC did indicate that the Australian market was "fundamentally competitive", although the inquiry also described the status quo as being a "comfortable oligopoly" -- with industry participation effectively limited to the four majors and their supermarket alliances.

The ACCC effectively recommended that the market be opened up to new importers, by addressing some of the structural obstacles noted in the report; obstacles like the lack of access to wharf facilities and terminals of an adequate size.

Probably the greatest bug-bear for retail consumers is the volatility of petrol pricing at that level. The ACCC noted that retail pricing was far more competitive since supermarket chains Coles and Woolworths had commenced selling petrol through their retail outlets.

Retailers are able to monitor pricing by competitors in the hinterland through an electronic service, 'Informed Sources'. Although the ACCC didn't find this service to be specifically anti-competitive, it did hand the retailer a significant advantage in knowing -- in real time -- when to raise or lower prices.

In the ACCC's view, a similar service could or should be made available to retail consumers, to balance out that inequity. Such a scheme ('Fuel Watch') exists in Western Australia and the ACCC would like to see a national system along the same lines, but it would require a "significant commitment".

According to the OECD, Australian consumers still enjoy the fourth lowest petrol pricing in the world and the ACCC admits that some of the tweaks outlined in the report might achieve, at best, savings of a few cents a litre.

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