The Road Ahead : June July 2008
JUN/JLY 08 13 WITH RACQ EXTERNAL RELATIONS W hile the Federal Government continues to proclaim the “transparency and certainty” its national Fuelwatch program will provide to motorists, the promise of cheaper fuel is no longer part of the of? cial rhetoric. From initial claims of savings of anywhere between two and ? ve cents a litre, the public statements of government ministers and Australian Competition and Consumer Commission (ACCC) representatives are now more cautiously couched in terms of providing information on the “cheapest petrol prices in their area”. But without evidence to the contrary, the RACQ is concerned that price- conscious working families will pay more for their petrol from December under Fuelwatch, which will not only require retailers to publicly notify their pump prices in advance but hold those prices for 24 hours. RACQ’s general manager for external relations, Gary Fites, said the ACCC could not provide the Australian Automobile Association with evidence showing how Western Australia’s Fuelwatch program had lowered prices in the Perth area. “Therefore, we went to independent fuel price monitor FuelTrac and to Informed Sources, which supplies the major oil companies with price data, and both provided similar evidence as to Fuelwatch’s lack of effectiveness in reducing prices,” Mr Fites said. “What was obvious was the two-week price cycle that has developed in Perth under Fuelwatch. “Were a similar pattern to develop in south-east Queensland under a national program, motorists would get an opportunity only once a fortnight to buy at the lowest possible price. “With two-thirds of motorists ? lling up weekly – and a similar proportion of total weekly petrol volumes in Brisbane sold on Monday and ‘cheap Tuesday’ – it’s very clear that price-sensitive fuel buyers would end up paying more rather than less to ? ll their tanks.” Mr Fites said the RACQ strongly supported the provision of more information on petrol, diesel and LPG prices, which would be particularly helpful to motorists in regional Queensland, where lower levels of retail competition meant no price cycle – and hence no opportunity to buy on the cheapest day. “But, on the evidence available, The RACQ has concerns about the bene? ts of a national ‘fuel watch’ scheme. the proposed 24-hour price-holding requirement of Fuelwatch offers no discernible cost bene? t,” he said. “In fact, independent fuel retailers support the view that locking in prices reduces their ? exibility – and viability – in competing against larger chains that can spread the ‘price risk’ over their multiple sites. “RACQ believes motorists would ultimately be better served if the government helped to keep independents as a competitive presence in the retail market by adopting a recommendation from last year’s ACCC petrol price inquiry. This involved breaking the virtual stranglehold the major oil companies have over the wholesaling of fuel. “Interestingly, in that same national inquiry, the ACCC identi? ed a number of negative aspects to WA’s Fuelwatch, including ‘the potential to affect the presence and in? uence of independents and the potential for a reduction in the predictability of price cycles for consumers who have adapted to them’.” A Queensland parliamentary committee chaired by current Treasurer Andrew Fraser reached a similar conclusion in 2006. Pressure on prices $ $ features Photo by K. A . V alerevich, Shutterstock.com .
April May 2008
August September 2008