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Greater competition to lead to cheaper fuel prices

File photo.

The Government is introducing changes that will promote greater competition in the fuel market at the wholesale level and lead to lower prices on the forecourt for motorists.

A comprehensive response to ensuring New Zealanders get a fairer deal at the petrol pump has been released today.

This follows the Commerce Commission fuel market study which found motorists were paying more than they should for petrol and includes:

  •   •  Fuel Market Bill drafting, to pass mid-year

  •   •  Industry consultation in coming weeks on proposed regulations

  •   •  Further work into longer-term Commerce Commission recommendations

  •   •  Letters from Ministers to fuel companies urging them to take pre-emptive action

“The action the Government is taking in response to the Commission’s report forms a package of solutions to deal with entrenched problems that have been around since the 1980s,” says Energy Minister Megan Woods.

“Since the report’s release in December, we’ve moved quickly to act on the Commission’s recommendations. We’re introducing changes that will promote greater competition in the fuel market at the wholesale level and lead to lower prices on the forecourt for motorists.

“We know that the cost of fuel is significant for households and businesses. The Government is giving this Bill priority and we will pass it into law later this year.

“The Commission’s report found that companies are making high profits due to a lack of competition in the industry. The report confirmed our concerns that motorists are paying higher prices for petrol and diesel than could be expected in a competitive market."

She says the Government’s focus on making changes at the wholesale level would see smaller players such as Waitomo and Gull gain access to cheaper fuel. This will mean other retailers will need to adjust their prices or risk losing customers.

“Cumulatively, the suite of measures we’re introducing will mean competition can begin to flourish, and the benefits will filter down to consumer."

The Minister has written to fuel companies asking them to consider the Commission’s recommendations around shared infrastructure and report back by March 30.

Regulatory changes in the Fuel Market Bill currently being drafted include:

  •   •  a more transparent wholesale pricing regime requiring fuel suppliers to publicly post the prices they sell to wholesale customers at storage terminals

  •   •  rules to ensure contracts between wholesale fuel suppliers and their customers are fair and support competition

  •   •  providing a dispute resolution scheme for the new regime

  •   •  improvements to the monitoring of the fuel market by requiring fuel companies to collect and disclose certain information

  •   •  requiring retail fuel sites to display premium fuel prices on forecourt price boards

More information about the market study into retail fuel (including the Cabinet paper and letters to the fuel companies) is available here.

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5 Comments
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Towering Hypocrisy

Posted on 29-02-2020 13:11 | By tutae.kuri

Watching Megan Woods announcing this the other day absolutely hacked me off! The government blaming oil companies for ripping off fuel prices when , in fact, government itself is the greatest culprit. All governments are witless idiots and take the Taxpayer for fools. I look forward to my three minutes of Democracy in September , look out for my voting paper !!!!

Wasted

Posted on 28-02-2020 00:07 | By

What a waste of time, money and effort. You’ve established what everyone has been saying for so long, and at what cost? This should give Labor more room for more taxes. Quite simple, use a SMILES card and buy your fuel from Mobil Chapel St because all the others will only reduce prices because they have to not because they care. Z advertised themselves as the people’s station yet has the most expensive petrol in NZ. It’s quite simple, like the Government, they don’t care about the people rather they care about the mighty $ that makes them look good. Mobil Chapel St is great prices and great service and if they can do it in this market so can others. Still, it time to start paying for the latest consultants and survey that says what we’ve all said and know.

Haha

Posted on 27-02-2020 18:33 | By Pensioner

It is the Labour Government with all of their taxes as to why it so expensive. Cut your share and give the fuel companies a break too.

Yea, right.

Posted on 27-02-2020 17:07 | By

We were promised the same on power prices, milk prices and butter prices. Still waiting!!!!

Power

Posted on 27-02-2020 11:46 | By Merlin

Power next please.