Doug Shave

Doug Shave

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    Government legislates for fairer fuel pricing

    15/11/2000 5:17 PM
     
    15/11/00

    Fairness and increased transparency in fuel pricing are key aims of legislation introduced today by Fair Trading Minister Doug Shave.

    “The legislation covers petrol, diesel and LPG used in vehicles and for domestic purposes at all points of the distribution chain around the State,” Mr Shave said.

    “The amendments to the Petroleum Products Pricing Act give the Commissioner for Fair Trading, in his capacity as Prices Commissioner, the power to fix maximum wholesale prices for petrol, diesel and LPG.”

    Suppliers selling from major terminals must supply fuel to other distributors at the displayed price unless there is a good reason to refuse. If supply is refused the matter can be referred to the Prices Commissioner, who can award compensation if it is found there is no good reason for supply being refused.

    The price of fuel sold from terminals not subject to maximum wholesale prices can be increased to cover additional operating costs. However, they must advise the Prices Commissioner of these add-ons and he will have the power to make this information public.

    The Prices Commissioner will also assess and publish average costs of transporting fuel throughout Western Australia.

    “In the retail area, ongoing monitoring of retail prices of petrol, diesel and LPG will be introduced,” Mr Shave said.

    “Prices will be posted daily on the Fair Trading website (details of which will be announced shortly) and will also be available via telephone from anywhere in the State for the price of a local call.”

    Key elements of the legislation covering retail fuel pricing include -
    • all retailers must prominently display their prices;
    • all retailers must fix the price of each type of fuel the day before and notify the Prices Commissioner, who will make these prices public;
    • making it an offence for retailers to change the notified price of fuel unless they inform the Prices Commissioner; and -
    • inspectors appointed by the Prices Commissioner will be able to issue infringements notices and on-the-spot fines for breaches of the Act.
    “These initiatives are aimed at giving people a clear picture of the pricing structure instead of the present mish-mash and smoke and mirrors,” Mr Shave said.

    Information which will be publicly available covers the -
    • maximum wholesale price of fuel from major terminals;
    • additional costs to distributors not operating from major terminals;
    • average cost of transporting fuel to retail outlets; and -
    • retail prices of petrol, diesel and LPG.
    “This information means people will be able to calculate price margins,” Mr Shave said.

    “It will increase competition by making it difficult for distributors to make excessive charges because their customers will be able to calculate their mark-ups.”

    The Minister said setting maximum wholesale prices would be more effective than setting maximum retail prices.

    “Setting maximum retail prices attacks the problem from the wrong end of the supply chain,” he said.

    “However, setting maximum wholesale prices, combined with other measures, will stop excessive price hikes at each level in the distribution chain.”

    The legislation and regulation changes address the recommendations of the Parliamentary inquiry into fuel prices established by Mr Shave in April, which was chaired by Mr Dan Sullivan MLA.

    Some recommendations, such as alternative fuel sources and diesel and lead replacement fuels, have been referred to a Cabinet sub-committee for further evaluation.

    Media contact: John Clune (Minister’s Office) 9213 6500