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

 

Statistics: Net Annual Migration Passes 71,000

A record 71,300 more migrants arrived in New Zealand than left in the January 2017 year, Statistics New Zealand said today. This surpassed the previous annual record set in December 2016. More>>

ALSO:

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news