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ACCC launches new initiative to keep eye over fuel prices

The Australian Competition and Consumer Commission has unveiled its new plan to scrutinise petrol prices across the country, as the price discrepancy stretched to more than 40 cents more per litre between cities and some regional areas.

ACCC Chairman Rod Sims said the new monitoring process would “go a long way” to determining why the gap between petrol prices in regional areas and metropolitan areas had tripled, while prices in Sydney and Melbourne had dropped by 45 cents a litre since July.

Under the new arrangement, fuel prices in all capital cities and 180 regional centres will be monitored, and the ACCC’s power to compel information will be used to examine petrol companies’ price-structuring systems.

Determining the cost of transferring fuels to regional centres, as well as storage and distribution costs would be crucial to working out why some places had large gaps between the wholesale price and pump price, Mr Sims said.

“I think we will be able to put the producer on the spot in the way they have never been before,” he said.

But with the global oil price hitting a six-year low this week, these reasons alone did not justify the current price discrepancy, he said.

“There’s no reason at all that the 35 cent reduction we’ve seen in international prices shouldn’t get passed on in rural areas. And it looks as though it’s been way too slow up until now.”

But some regional MPs have indicated that the ACCC’s approach will not do enough to curb rampant price gouging.

Minister for Agriculture Barnaby Joyce said high prices were a “serious concern” in his electorate, adding the “government has a role to play” in areas not open to market forces.

Victorian MP Sharman Stone said towns in her electorate were being “held captive” by petrol retailers and increased ACCC powers were the best way to stop the price gouging.

Hefty fines beyond “a few thousand dollars” should be imposed on companies found to be ripping off motorists, she said.

Currently, the ACCC can only pursue court-ordered fines and penalties where it can be proved companies have colluded in setting the bowser price.

“If a company can’t demonstrate how the additional cost has been incurred then that company should not be allowed to charge a higher margin in a country area compared with a metropolitan area,” Ms Stone said.

She said her calls were likely to go unheeded by her colleagues in city seats, whose “let the market rip” attitudes were letting her constituents down.

“Unfortunately, some of them actually believe there is such a thing as a level playing field and a free market.

“We’ve let the market rip and now we’ve got country people being ripped off.”

But Mr Sims said that although price gouging was not against the law, there was no need for the ACCC’s powers to be increased.

“I don’t think we should underestimate the importance of transparency and exposure, and also consumer pressure.

“If we were to look at a town and find there were very high profits being made, then that exposure will lead to such a backlash the prices will come down,” he said.

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