23 April 2020

Barr prepared to cap petrol prices if retailers don't pass on savings

| Dominic Giannini
Join the conversation

Chief Minister Andrew Barr has put major petrol companies on Canberra on notice for not passing on a drop in petrol prices. Photo: File.

The ACT Government is prepared to bring out the big stick against petrol companies in Canberra who continue to price gouge, with Chief Minister Andrew Barr indicating he would use special legislative powers to enforce a retail margin on operators.

The Chief Minister has the power to determine the maximum wholesale price, retail price and retail margin of fuel on the recommendation of the fair trading commissioner, powers he said he will use if petrol companies continue to price gouge Canberrans at the bowser.

“A quick scan of petrol prices in the ACT sees the majority of outlets charging 90 cents a litre for E10 fuel. There are one or two that are charging nearly double that, [which] seems to me to be price gouging and is unacceptable and without justification,” he said.

“I recognise that the volume in sales has halved, demand has effectively fallen, which is why petrol prices have fallen and why that should be flowing through into lower petrol prices.

“If we did not see a response in terms of further significant reductions in price in the coming weeks, we could look at triggering that retail margin legislation, but I will give the retailers advanced warning and put them on notice today.”

Mr Barr has written to every major petrol retailer in Canberra demanding an explanation as to why prices have dropped in other major metropolitan cities like Sydney but not across the ACT.

Additional transport and operating costs to get the petrol to Canberra should, at most, add an extra six to seven cents a litre, Mr Barr wrote in a letter to 7-Eleven CEO Angus McKay.

“Given this, I can see no justification for the current differences in prices between Sydney and Canberra,” he said.

Chairman of the ACCC Rod Sims also received a letter from Mr Barr last week, requesting that the consumer watchdog investigate petrol prices in the ACT.

“Despite crude oil prices falling to near record lows, and wholesale prices reducing substantially as a result over the last few months, we are not seeing similar outcomes for retail fuel prices in the Territory,” Mr Barr wrote.

“At a time when the economy is being severely affected by the COVID-19 pandemic and many households are struggling due to job losses and restrictions placed on the community, this outcome is not acceptable.

“Any action taken by the ACCC would help increase pressure on retailers operating in the ACT market to do the right thing and reduce retail prices to a level more commensurate with broader market trends.”

Opposition leader Alistair Coe also wrote to the ACCC requesting an investigation and he said the Canberra Liberals are prepared to consider reforms on the next Assembly sitting day in May.

“Canberrans have always been ripped off at the bowser and we stand ready to end the petrol price rip-off affecting so many families,” Mr Coe said.

“There are a range of measures the ACT Government can implement such as real-time petrol price monitoring, improving business competition, reducing taxes and stopping daily price gouging.

“We stand ready to implement reforms and if the ACT Government is prepared to come to the table, I see no reason why we cannot deal with this when the Assembly returns.”

If they come to power, the Canberra Liberals say they will trial real-time petrol price monitoring and price caps.

According to the Canberra Liberals, Canberrans pay an average of $450 more for fuel per year than households in NSW.

Join the conversation

All Comments
  • All Comments
  • Website Comments

“Additional transport and operating costs to get the petrol to Canberra …”

Hmm – clearly crossing the border from Murrumbateman into Canberra is hard work for the trucks, because it’s worth your while driving to Murrumbateman to fill up.

Make them all advertise their prices on the app you keep bleating about. The people will decide where to take their money.

Oh, that’s rights, someone did start publishing prices daily and they got hounded out of it.

Barr is just diverting attention from the higher need to cap rates, now increasing by 10-11%pa.

Was interested the other day to be told the first 45 cents of the cost of a litre of juice goes in fuel excise, which is used to finance federal and state infrastructure, like roads.

They treat illegal tobacco growers like heroin smugglers because of their illegal selling which attracts no excise , which would be used to finance federal and state infrastructure, like roads.

Yet you can purchase a Tesla electric car, pay no excise of course to run it, use the roads and other infrastructure as you wish, and smile at us suckers still paying our share of excise, used to finance federal and state infrastructure, like roads.

Funny innit.

Partially right. Where you are mistaken is petrol excise goes into consolidated revenue it is not hypothecated to road building or maintenance. Same with state rego fees too that money isn’t specifically for roads.

Oh and do remember that GST is charged on the excise too. John Howard lowered excise when he introduced the GST to compensate, but of course because excise grows every year (might even be twice yearly) that drop has now been well and truely exceeded.

Mark Hassell8:53 pm 24 Apr 20

why would they be given “weeks” to bring the price down, it should be days at most. More empty words from government who will talk about action until Christmas and do nothing.

HiddenDragon9:22 pm 23 Apr 20

If it looks like a duck and quacks like a duck then it’s probably gouging, but any observations the ACCC might make about cost pressures (other than the cost of getting the petrol to Canberra) could be interesting……

ok, let’s see it, or is it all hot air.

Right now, the price of a barrel of crude oil is at the lowest price it has been for 70 years. ALL of them are price gouging.

Daily Digest

Want the best Canberra news delivered daily? Every day we package the most popular Riotact stories and send them straight to your inbox. Sign-up now for trusted local news that will never be behind a paywall.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.