Darwin first in line for ACCC regional fuel price investigation


Study will determine why fuel prices in Darwin are significantly higher than other areas.

Darwin first in line for ACCC regional fuel price investigation
The ACCC says it wants to determine why fuel prices are higher in certain regional locations.

 

Darwin will be the first regional centre to be investigated under a new initiative to determine why fuel prices are higher in certain regional areas.

The Australian Competition and Consumer Commission (ACCC), which is carrying out the petrol price monitoring study, has announced Darwin as the first of at least three regional areas to be scrutinised this year.

The regional market studies are part of new petrol monitoring arrangements announced in December last year.

The ACCC says the studies aim to get to the bottom of why prices are higher in certain regional locations and to identify and explain each component of the prices paid at the bowser.

"Petrol prices in Darwin are among the highest in Australia. Annual average retail petrol prices in Darwin in 2013-14 were around 170 cents per litre, which was almost 20 cents per litre higher than in the five largest capital cities," ACCC chairman Rod Sims says.

"Petrol prices in Darwin are consistently higher than in Katherine, which is far smaller and more than 300km inland. Furthermore, the differential between Darwin prices and prices in the five largest capital cities has increased in recent years."

The ACCC intends to complete at least two more regional market studies by the end of the year. It is due to announce the next locations in the coming months.

Sims says the ACCC receives many complaints from across Australia about petrol prices.

He says the agency previously monitored prices at a macro level but will now have the power to look at price drivers at a local level.

"We see three potential benefits from these ‘deep dive’ regional market studies," Sims says.

"First, simply providing greater transparency will empower. Second, we could make recommendations for change to some tier of government. Third, we may find a breach of the Competition and Consumer Act that was not otherwise apparent."

The ACCC is using its compulsory information gathering powers to require information from fuel companies at every level of the supply chain leading into Darwin.

"The only way to get the information we need is to issue compulsory information gathering notices. We acknowledge that these will place a burden on those companies receiving the notices," Sims says.

"To understand why petrol prices are so high we need deep and detailed information about every step of the supply chain. Gathering and analysing this complex data will take considerable time."

Sims says notices are currently being sent to major fuel companies in Darwin and requests for detailed information will be made in the coming weeks.

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