Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Regulation of petrol prices doesn’t work, says expert

Regulation of petrol prices doesn’t work, says expert

Jan. 24 (BusinessDesk) – A visiting competition expert says regulating petrol prices doesn't work, and that international attention is now turning to the role refineries play in the industry.

Justus Haucap, who holds the chair of competition theory and policy at the University of Dusseldorf, told a seminar in Wellington of an economic laboratory experiment he was involved with to shed light on the issue.

The experiment tested the Austrian, Luxembourg and Western Australian regulation regimes.

In Austria, the price of petrol can only be increased in the morning but cuts are always possible. In Luxembourg, margins are regulated, and in Western Australia only one price change is allowed per day.

“The Austrian and Luxembourg pricing rules actually tend to increase the profit of the operating companies,” he said.

The Western Australian regime didn’t do any harm but also didn’t provide any benefit.

“We got an uneasy feeling about implementing the Austrian rule in the German market after this result, even though it is only experimental evidence,” he said.

He said care had to be taken in making policy conclusions from economic laboratory experiments.

But the broad policy conclusion was that pricing rules would not solve the problem of competition in petrol price-setting.

The German cartel authority had now turned its attention to the wholesale market which supplied petrol stations. There were “quite funny stories” that suggested the use of market power, including by refineries, he said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news