ACCC admits petrol price gouging probably taking place
The competition watchdog has outlined how it hopes to unravel the mystery of volatile petrol prices and uncover why it is so much cheaper to fill up in the city than in regional Australia.
However, the chairman of the Australian Competition and Consumer Commission (ACCC), Rod Sims, said regional consumers were probably right to feel they were being gouged by petrol retailers.
"I think you'd have to say the presumption is that there's a bit of gouging going on in the sense that the price falls internationally aren't being properly passed on into the market place," Mr Sims told ABC radio's AM program.
"We need to get more evidence on that, but that's how it looks at first glance."
The ACCC is under pressure to come up with answers after a recent directive from Small Business Minister Bruce Billson to determine why people in regional Australia paid an additional 17 cents per litre for petrol in December after a dramatic fall in the price of crude oil.
Back in July, the gap between capital city and regional prices was narrower at an average 5.7 cents per litre.
The ACCC says that every additional cent per litre nationwide costs Australian consumers close to $200 million every year.
While the ACCC is yet to prove anti-competitive behaviour that breaks the law, Mr Sims is looking for behaviour that might "out" petrol retailers for inappropriate community behaviour.
"Now what we're likely to find is people making a lot of profit. We can shine a light on that and it could embarrass some people into lower prices," Mr Sims said.
"Just for consumers being more empowered with more information about what the profit margins are will, I think, drive more change and behaviour."
Although petrol prices are not regulated in Australia, the ACCC is now equipped with compulsory information-gathering powers which requires companies and retailers to provide information at every level of the supply chain.
The ACCC will produce at least eight reports in 2015 which will examine petrol price movements and what drives volatility.
The first report, covering all capital cities and 180 regional locations, is due next month and will look at international refined prices, terminal gate prices and the exchange rate.
The price of West Texas Intermediate crude, the global benchmark, rose today by almost 6 per cent to $US48.48 a barrel.
However, prices have tumbled by nearly 60 per cent since June as strong global supply outstrips waning demand.
_Follow Peter Ryan on Twitter @peter_f_ryan and on his Main Street blog._
